Homeless industrial complex

Where charity meets big business

“Institutions will try to preserve the problem to which they are the solution.” — Clay Shirky

The term “homeless industrial complex” refers to a network of organizations, including government agencies, non-profits, and private contractors, that are involved in addressing homelessness but may also perpetuate it due to the financial incentives involved — and it appears to be gaining a foothold in Clallam County.

On Tuesday, the County Commissioners unanimously decided to award an additional $2 million to Peninsula Behavioral Health (PBH) for a new facility that will provide luxurious amenities such as a rooftop terrace, community room, and dog washing station to homeless residents at a cost of over $350,000 per unit.

The new facility in Port Angeles is for people who are coping with addiction, those who are frequently incarcerated, and people who are told “it’s time to move out” by their parents. PBH, the agency that will own and manage the permanent supportive housing, says these facilities are successful when no one moves out or is evicted.

Here’s how the homeless industrial complex usually works:

1. Funding and Development: Public money is allocated to build housing projects for the homeless, such as “permanent supportive housing.”

2. Bureaucracy: Cities and counties collect building fees and hire bureaucrats for oversight.

3. Nonprofits and Contractors: These projects are handed off to nonprofits with long-term contracts to run them. However, the people staffing these shelters often operate within large bureaucratic structures with significant overhead costs.

Critics argue that this system can lead to inefficiencies and high costs, with much of the funding going towards administrative expenses rather than directly helping the homeless.

It’s a bit like a hamster wheel — lots of activity, but not necessarily much progress.

Every person struggling with addiction or seeking housing has a dollar sign hovering over them. Once their path toward independence is found, sometimes through temporary or transitional housing, that dollar sign is replaced with their self-reliance. With permanent supportive housing, clients can be a conduit to fund the agency’s drivers, therapists, peer support specialists, case managers, admins, billing specialists, and CEO for years.

According to ProPublica, in 2022, PBH had over $16 million in revenue and $15.7 million in expenses. CEO Wendy Sisk received $250,967 in compensation (up nearly 6% from $237,271 the previous year). Executive compensation was almost $900,000 for top-tier positions, and other salaries and wages were $8.5 million. Employee compensation accounted for 60% of the agency’s total expenses.

The IRS Form 990 shows that 184 employees worked at PBH — almost the same number of employees who lost their jobs at the McKinley Paper Mill last week. While private, tax-generating enterprises may not be lucrative in Clallam County, government-provided social and welfare services are a burgeoning economy feeding off taxpayers.

Billions of dollars have been dumped into solving homelessness in the Seattle area over the last decade, but the problem has only worsened. That model is sustainable, with tax-generating companies like Amazon and Starbucks pumping dollars into King County’s economy. However, in Clallam County, the biggest employer is a failing hospital. The second largest job creator is a tax-exempt Tribe. Many other top employers are closing, moving, or furloughing. The tax generators in our County’s sluggish economy aren’t businesses; they’re the residents, and we’re being asked to pick up the slack more and more.

On Tuesday, several residents gave public comments about the proposed $12.75 million facility. No one said that homeless residents and those battling addiction should go without help; people were adamant about their desire to help those in crisis. Concerns were voiced about allowing drugs and alcohol in the new facility (which is described as “not exclusively dry”), and they were also critical of the cost. The commissioners were asked to pause and review the project before handing another $2 million over to PBH, but the resolution was passed.

We’ll soon see if revenue can keep up with the County’s appetite for spending. The preliminary budget for 2025 was just released and will be discussed over the next several months.

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This was one of several public comments given on Tuesday:

A year ago, the Board of Commissioners faced the 2024 budget with a $2 million deficit for the first time. There was no discussion of how the Commissioners reached such a budget shortfall, but now we know that the Board is often guided by ideology and false information instead of policy — the millions of taxpayer dollars needlessly spent during the Towne Road scandal is a prime example.

After giving Peninsula Behavioral Health $2 million for a housing project, the commissioners are considering $2 million more. However, the agency has a troubled history of tax dollar stewardship. Their last housing project, Dawn View Court, was estimated to cost $140,000 per unit, but when it opened last year, the final cost ballooned by 37% to $192,000 per unit. The proposed “Northview” project is estimated to cost over $350,000 per apartment before construction has begun. Taxpayers are being asked to fund many amenities they do not have themselves. Northview will have:

• A community room that walks out onto a 4th-floor rooftop terrace.

• A 34-panel solar array and EV charging station to meet energy code.

• $15,000 will be spent per unit to add air conditioning.

• Heat-pump water heaters will be installed instead of the traditional, cheaper variety.

• Broadband internet.

• Covered parking.

• A smoking shelter.

• Dog walking areas and a dog washing station.

• Large windows for expansive views of the Olympic Mountains and the Strait of Juan de Fuca in this prime real estate location.

• Each unit will have a dishwashing machine because, according to CEO Wendy Sisk, her agency wants to “make it as easy as possible for people to be successful.”

This will be permanent supportive housing, meaning residents will stay as long as their income does not exceed a certain threshold. PBH says Dawn View Court is a successful model for permanent housing because there has been no tenant turnover or evictions in the past year—in other words, no one moved out of the program and became independent.

This is not an exclusively dry facility. Drug and alcohol use is permitted.

The commissioners’ first tenet in their mission statement reads, “Putting the translated desires of our residents into action.” Yet, their emails about this housing project seem more like a sales pitch than an attempt to listen to residents' desires. The commissioners serve the people who pay them, not the agencies that ask for taxpayer money.

The budget for this project has become irresponsible and frivolous. The closing of the McKinley Paper Mill is estimated to cause $1.1 million in lost tax revenue. Commissioner Ozias has taken an anti-business, anti-job stance against private enterprise in his district with the Happy Valley Gravel Pit. Tax-generating employers are disappearing, taxable land is being absorbed into Tribal Trust Land, and the burden of embracing a welfare state is increasingly falling on the residents.

Being generous is easy when it’s someone else’s money, but when taxpayers are forced to subsidize $350,000 per apartment for luxury living, the Board of Commissioners will bankrupt this county before it helps people find a path to stability.

Jeff Tozzer, Sequim