How Free Cities Offer Hope to the Homeless

by | Jul 12, 2022 | Blog

For the past 15 years, I have worked with homeless people in Brazil. I have seen what does and doesn’t work in helping them get off the streets.

Families living in substandard housing – including those in the favelas common in Rio de Janeiro and São Paolo – are often included in government homelessness statistics. However, those I have worked with mainly live on the city’s streets.

People often have serious personal problems and engage in antisocial behavior. The way they interact with surrounding communities can be damaging and lower the public’s sense of security.

Governments around the world recognize the adverse effects of homelessness, but their solutions tend only to make problems worse. In places like California and New York, governments try to alleviate problems caused by homelessness by providing aid and grants. However, the data shows that these interventions only make homelessness more prevalent. In each of these cities, the homeless population has grown rather than fallen (see stats for California and New York).

Governments worldwide make the mistake of thinking homelessness is caused by a lack of public funds. Many believe throwing money at the problem will solve it. Unfortunately, bureaucratically administered welfare systems tend to be highly inefficient and open to abuse. They also warp societal incentives and raise prices in the rest of the economy due to the added tax burden required to fund them.

The truth is that long-term homelessness is often a psychological as well as an economic problem. While some people consciously opt for a homeless lifestyle, the vast majority believe they have no alternative. Many become homeless through some economic event. However, many remain lost and spiral down into drug addiction or other vices through feelings of worthlessness, a lack of connection to the community, and a lack of individual responsibility.

Government policies like minimum wage laws, which are supposed to help poor people, can force them into homelessness instead. People might find that they can’t get a job because their skill level is so low that their labor isn’t worth the minimum wage to an employer. When they receive money from the government for not working, they may start spending that money on alcohol or drugs that help them cope with the hopelessness they often feel. The result can be a destructive cycle that leads to homelessness.

For the past year, I have worked in São Paolo for an organization with an 84% success rate in getting homeless people off the street. The organization is an NGO called ABCP (Instagram @ongabcp). As part of my work with ABCP, I have made more than 2,000 visits to homeless people and helped more than 50 single men get off the streets and begin work. Eight out of ten teens who work with us find both a job and a home within six months.


Fernando, before and after

The story of my friend and comrade Fernando provides one example of success. Fernando was homeless for over twelve years. He was addicted to drugs and had several close brushes with death. His social reintegration began with a contract that ABCP has its aid recipients sign as the beginning of the relationship. It outlined his commitment to ABCP and the help he would receive in exchange.

ABCP promised to provide a place to live, a skills evaluation, advice on monetizing his skills, a course to teach him self-sufficiency, and coaching to help him change his way of living. In exchange, Fernando agreed not to use drugs, to cook for himself, clean and care for the house as if it were his own, report on his progress regularly, complete the course, and become self-sufficient within six months.

Fernando had a skill as a house painter and slowly built his reputation. At first, he needed help with marketing, but now he sells his services with apps and the internet. Eighteen months after starting the program, he is not only self-sufficient but has a thriving business painting houses and other buildings. In addition, he is planning to get married soon.

Thiago Vinicius

Thyago (left) and Vinicius (right)

Thyago is another formerly homeless man who worked with ABCP. He went from living on the streets to running a profitable sculpting business. He is a self-made artist who developed his potential with some guidance. As with Fernando, we helped him learn about marketing his skills so he could sell his services after the program. He will have an exhibition of his art this month.

Vinicius is a poet who creates his products, such as little books or items with his sentences and poems. ABCP is still working with him to create a route for him to make a living as a poet. He has sold most of his poems and is making progress in building his business.

The path Fernando, Thyago and Vinicius took to improve their situation was not an easy one. Developing a business is difficult and involves risk. Each of these men faced various setbacks and obstacles on their way to self-sufficiency. However, their examples demonstrate that entrepreneurship really is a possibility for people seeking to re-enter society.

The success of this program shows how mindset, responsibility, and community can make a huge difference in a homeless person’s life. These are the values of entrepreneurs, and they are encouraged in Free Cities where entrepreneurship is enabled. As ABCP makes contracts with the participants in its programs, so Free Cities make contracts with their residents. That relationship is foundational in the market for living together.

Free Cities help the poor by keeping their living costs as low as possible. Public services like security and infrastructure can be supplied more efficiently and economically by the free market than by any bureaucratic government. Membership fees to fund basic city services are low and fixed, and the lack of taxes like VAT makes essential goods cheaper. 

The City Operator is explicitly approved by every resident who chooses to live in the city, so there is no incentive to raise campaign funds for expensive elections. Therefore, there is no incentive to create regulations that benefit some companies against their competitors in hopes of campaign contributions. Keeping regulations few and simple benefits everyone who lives in the city, especially entrepreneurs. Housing is affordable because less burdensome regulations keep construction costs down. There are no policies like rent control that lead to shortages and higher rents. 

Furthermore, a lack of minimum wage laws means that anyone can find productive ways to make a living, no matter how low their skill level is. This can give homeless people the work experience needed to increase their productivity and income. In Free Cities, even those on meager incomes can start their own small business with whatever skills they possess.

But the most important way that Free Cities can help homeless people is by encouraging a mindset that leads to success. All of the ways the city keeps costs low and makes it easy to do business contribute to the chances for success. The contract with the Free City provides the connection to the community and the call to responsibility that is crucial for people to live their most meaningful and worthwhile lives.