11/20/2012 11:28 am ET Updated Jan 20, 2013

Is the Federal Government Misdirecting Homelessness Funds?

Sometimes creating solutions to difficult problems just need a bit of common sense.

If your credit card debt significantly increases each month, design a personal monthly budget where you spend only the amount of money you earn. If you are trying to lose weight, create a diet where you burn more calories each day than you take in.

On a national level, the same perspective holds true.

Take one of this country's most deplorable social issues of this generation -- homelessness. The federal government distributes about $1.5 billion per year in financial assistance in order to address homelessness around the country through funding awards called Continuum of Care.

Common sense dictates that the government should invest these funds into communities where homelessness is most acute. But are they doing that? Sadly, no.

Just look at the county of Los Angeles. This region has approximately 50,000 people who are homeless, which is just over 8 percent of the total homeless population in the country. Common sense would conclude that this area should receive 8 percent of the federal homelessness resources.

But, in this case, rational solutions do not prevail. In 2011, Los Angeles received $75 million to help its homeless population, only 5 percent of the total federal allocation.

Why is this so? Are these federal officials who live in freezing winters just jealous that Angelenos and their temperate weather deserve less federal dollars than the rest of the country? Perhaps their justification is that if you are homeless, you're better off sleeping on the white sands of Southern California's beaches than the frozen concrete sidewalks of New York City.

Actually, the distribution formula is not based on bias against homeless Southern Californians. The allocation prescription is based on some mathematical social formula created by pencil-sharpening bureaucrats 25 years ago.

That's correct, the federal government is determining where homelessness presides based on a 1987 mathematical equation. Back then, a gallon of gasoline was 89 cents, a postage stamp cost 24 cents, and the average monthly rent was $395. (And, this was not rent control rates!)

I can just imagine some white collar government accountants with thick glasses and plastic pencil holders in their shirt pocket, creating some sort of Soviet-like 10 and 20-year projections for where federal dollars should be allocated in order to help the poorest of the poor.

They used statistical numbers like population size, poverty rates, population growth lag, and numbers of housing units built before 1940. These numbers were probably great poverty indicators for a time when the price of a house back then is the same price of a luxury car today.

But since homelessness is so much more complicated today, those old formulas just don't work.

Today, we need a new way of allocating federal resources toward ending homelessness. Instead, of a slide-rule (if you even know what that is) approach, we need a iPad approach to distribution.

We need to look at communities that are infested with poverty, overwhelmed with overcrowded housing units, and possess a dearth of affordable housing. Advocates around the country are promoting this simpler, more transparent formula.

It would work for today, but if we are still using a 2012 formula in 2037 those advocates in 25 years from now will look at us as old bureaucratic, out-of-touch iPad-toting policy advocates.