13 ms·

I am for the "housing first" approach, but there is a clear moral hazard when you provide free housing to the lowest rung, and then say that the minimum cost of

by tmh79 7y ago

I am for the "housing first" approach, but there is a clear moral hazard when you provide free housing to the lowest rung, and then say that the minimum cost of housing for the next group is like 1.5k/bedroom/month.

hguant 7y ago
It's important to note that "moral hazard", while not quite a term of art, has a specific meaning in economics that isn't associated with ethics or morality. The quick google definitions: "a lack of incentive to guard against risk where one is protected from its consequences" Wikipedia: https://en.wikipedia.org/wiki/Moral_hazard https://en.wikipedia.org/wiki/Moral_hazard
- nostrademons 7y ago
  He's using it correctly here though: the risk is that if you provide housing to the lowest rung while making the next group down pay $1.5K/bedroom/month, some of the next group down will decide that they would rather become part of the "lowest rung" group rather than pay the money. It's like the phenomena of people committing petty crimes so that they can get a warm bed and food in jail.
  - Latteland 7y ago
    Your example illustrates to me why moral hazard isn't the best title for this. We should provide free housing to people in need so they don't do things like commit a crime to go to jail.
    - deleted 7y ago
      [deleted]
  - dclowd9901 7y ago
    You mean like all those millionaires who decide to become thousandaires so they don't pay more taxes? Give me a break.
    - esyir 7y ago
      First, that is a terrible analogy. If I'm interpreting the ops statement correctly, this is more analogous to a system where post-tax income decreases with rising income instead.
- robocat 7y ago
  The moral hazard is for those renting: the free housing is equivalent to an insurance payout. A renter can do risky things (like lose their job) because they are protected from the consequences of not being able to pay the rent. They get housed anyway.
  - rebuilder 7y ago
    Being able to take risks can be seen as a good thing, too. It may help class mobility.
lazyasciiart 7y ago
Disregarding the factual issues there, what about the moral hazard of not doing so and turning people into Safe Seattle members who literally advocate shooting them or driving them into the forest and leaving them there?
rdtwo 7y ago
Honestly the housing first is a bad idea for the visibly homeless. Might work Ok for the invisible homelessness but the property damage costs can easily be factors lager than even the rent cost.
- WhatIsDukkha 7y ago
  Citation needed. I think you should seriously reconsider your position. There is a chronic inebriate apartment building downtown Seattle that makes no moral judgements about "stopping drinking" etc that LOWERS COSTS (with studies to back it up) for the community. People with problems get a permanent address. Ambulance and police calls drop as they aren't chasing these guys all over town. Think again. MAYBE your position is more about being judgemental about their moral state then actually whats good for them and the rest of us. EDIT - Just to be clear. If someone is too far gone (and many of these guys are) then we need to start funding involutanry commitment beds.
  - rdtwo 7y ago
    Might be marginally effective but at what cost. If it costs more a year to house one of the chronically homeless than incarcerate then then I’d go with the cheaper option. The money is better used to help the invisible homeless after that point
- fasthandle 7y ago
  Wealthy part of the richest country in the world cannot home it's citizens because NIMBY property prices?
jbob2000 7y ago
This is what’s keeping me living at home with my parents. I tried to move out a few years ago, found an apartment that was $1,100 a month and plenty of parking. 6 months after moving in, after having multiple bad experiences with tenants, I realized I moved in to a “subsidized housing” apartment. There was lots of parking available because 90% of the tenants weren’t allowed to drive. It hurts to work all day to pay for stuff, only to come home to half your neighbors lazing about drunk and stoned getting a free ride. It fucking sucks, I could never escape the thought that I could just quit my job and smoke weed all day and live pretty much the same as I was. If I wanted to live in a condo, which doesn’t have subsidized housing, I’d have to pay rents upwards of $2,200. So I moved back in with my folks until I can buy something.
- neonate 7y ago
  Good luck. Hope you get there soon.
- vkou 7y ago
  > It hurts to work all day to pay for stuff, only to come home to half your neighbors lazing about drunk and stoned getting a free ride. I hear this all the time - yet I don't see many people particularly keen on dropping out, and getting onto the free ride bus. One of the problems with that free ride bus is that it doesn't go to great places. It didn't sound like you were looking forward to the prospect of living in subsidized housing for the rest of your life very much.
  - michaelt 7y ago
    I don't see many people particularly keen on dropping out, and getting onto the free ride bus. I don't either - but maybe those people just don't hang out on Hacker News.
  - freyr 7y ago
    > yet I don't see many people particularly keen on dropping out Just open your eyes. Look around Seattle, or San Francisco, or Los Angeles, or San Diego or any other city with mild weather, lenient law enforcement, and generous welfare benefits. The number of homeless and housed "drop outs" is astonishing.

by tmh79 7y ago

hguant 7y ago

It's important to note that "moral hazard", while not quite a term of art, has a specific meaning in economics that isn't associated with ethics or morality. The quick google definitions: "a lack of incentive to guard against risk where one is protected from its consequences" Wikipedia: https://en.wikipedia.org/wiki/Moral_hazard https://en.wikipedia.org/wiki/Moral_hazard

nostrademons 7y ago
He's using it correctly here though: the risk is that if you provide housing to the lowest rung while making the next group down pay $1.5K/bedroom/month, some of the next group down will decide that they would rather become part of the "lowest rung" group rather than pay the money. It's like the phenomena of people committing petty crimes so that they can get a warm bed and food in jail.
- Latteland 7y ago
  Your example illustrates to me why moral hazard isn't the best title for this. We should provide free housing to people in need so they don't do things like commit a crime to go to jail.
  - deleted 7y ago
    [deleted]
- dclowd9901 7y ago
  You mean like all those millionaires who decide to become thousandaires so they don't pay more taxes? Give me a break.
  - esyir 7y ago
    First, that is a terrible analogy. If I'm interpreting the ops statement correctly, this is more analogous to a system where post-tax income decreases with rising income instead.
robocat 7y ago
The moral hazard is for those renting: the free housing is equivalent to an insurance payout. A renter can do risky things (like lose their job) because they are protected from the consequences of not being able to pay the rent. They get housed anyway.
- rebuilder 7y ago
  Being able to take risks can be seen as a good thing, too. It may help class mobility.

lazyasciiart 7y ago

Disregarding the factual issues there, what about the moral hazard of not doing so and turning people into Safe Seattle members who literally advocate shooting them or driving them into the forest and leaving them there?

rdtwo 7y ago

Honestly the housing first is a bad idea for the visibly homeless. Might work Ok for the invisible homelessness but the property damage costs can easily be factors lager than even the rent cost.

WhatIsDukkha 7y ago
Citation needed. I think you should seriously reconsider your position. There is a chronic inebriate apartment building downtown Seattle that makes no moral judgements about "stopping drinking" etc that LOWERS COSTS (with studies to back it up) for the community. People with problems get a permanent address. Ambulance and police calls drop as they aren't chasing these guys all over town. Think again. MAYBE your position is more about being judgemental about their moral state then actually whats good for them and the rest of us. EDIT - Just to be clear. If someone is too far gone (and many of these guys are) then we need to start funding involutanry commitment beds.
- rdtwo 7y ago
  Might be marginally effective but at what cost. If it costs more a year to house one of the chronically homeless than incarcerate then then I’d go with the cheaper option. The money is better used to help the invisible homeless after that point
fasthandle 7y ago
Wealthy part of the richest country in the world cannot home it's citizens because NIMBY property prices?

jbob2000 7y ago

This is what’s keeping me living at home with my parents. I tried to move out a few years ago, found an apartment that was $1,100 a month and plenty of parking. 6 months after moving in, after having multiple bad experiences with tenants, I realized I moved in to a “subsidized housing” apartment. There was lots of parking available because 90% of the tenants weren’t allowed to drive. It hurts to work all day to pay for stuff, only to come home to half your neighbors lazing about drunk and stoned getting a free ride. It fucking sucks, I could never escape the thought that I could just quit my job and smoke weed all day and live pretty much the same as I was. If I wanted to live in a condo, which doesn’t have subsidized housing, I’d have to pay rents upwards of $2,200. So I moved back in with my folks until I can buy something.

neonate 7y ago
Good luck. Hope you get there soon.
vkou 7y ago
> It hurts to work all day to pay for stuff, only to come home to half your neighbors lazing about drunk and stoned getting a free ride. I hear this all the time - yet I don't see many people particularly keen on dropping out, and getting onto the free ride bus. One of the problems with that free ride bus is that it doesn't go to great places. It didn't sound like you were looking forward to the prospect of living in subsidized housing for the rest of your life very much.
- michaelt 7y ago
  I don't see many people particularly keen on dropping out, and getting onto the free ride bus. I don't either - but maybe those people just don't hang out on Hacker News.
- freyr 7y ago
  > yet I don't see many people particularly keen on dropping out Just open your eyes. Look around Seattle, or San Francisco, or Los Angeles, or San Diego or any other city with mild weather, lenient law enforcement, and generous welfare benefits. The number of homeless and housed "drop outs" is astonishing.