The Connection Between Overcrowded Psych Wards and the Booming Market for Brand-New Homes

Ben H.

Hatched by Ben H.

Oct 01, 2023

4 min read


The Connection Between Overcrowded Psych Wards and the Booming Market for Brand-New Homes

The state of mental health care in the United States is facing a crisis. With an exploding number of mentally ill individuals incarcerated in jails, the already overwhelmed psychiatric hospitals are struggling to keep up with the demand. A Wall Street Journal analysis of state data reveals that more inmates are languishing in jail without court-ordered treatment, unable to stand trial or receive the necessary care they need. This mounting problem raises important questions about the responsibility of rectifying the supply and demand for psychiatric facilities and whether the incentives are aligned to allow the private market to work effectively.

In Boulder, Colorado, an inmate has been sitting in jail for 226 days, waiting for a spot in a psychiatric hospital. The mental-health supervisor, Pam Levett, expressed her frustrations about the inept system they are working in. The situation is not unique to Boulder; Oklahoma's waitlist for psychiatric care grew so long that health officials had to resort to medicating mentally ill inmates in jails to restore their competency for trial. However, unlike psychiatric hospitals, jails cannot force inmates to take medication. The prescriptions available in jails are often limited, making it more challenging to adjust treatment, and there may not always be practitioners available to monitor patients. Moreover, the confinement and the presence of law enforcement can contribute to psychotic delusions, exacerbating the mental health issues faced by these individuals.

The scarcity of behavioral-health services and workers further compounds the problem. State leaders and mental health advocates acknowledge that the shortage has reached dire levels. In Missouri alone, there are 229 inmates waiting for one of the state's 897 psychiatric-hospital beds, which are already occupied. The size of the network and whether these hospitals are state-run remains unclear, but the demand clearly outweighs the available resources.

On the other end of the spectrum, the housing market is experiencing a boom in brand-new homes. Millions of American homeowners are reluctant to sell their properties because they cannot afford to give up their low mortgage rates. The National Association of Realtors' data shows that only 1.08 million existing homes were for sale or under contract at the end of May, the lowest level for that month since 1999. This discrepancy between the overcrowded psych wards and the booming market for brand-new homes showcases the unique behavior of the housing market.

Rick Palacios Jr., the director of research at John Burns Research & Consulting, highlights the rarity of this situation. He predicts that the disparity will continue to widen in the coming months. Homeowners are holding onto their properties for longer periods, unwilling to let go of their favorable mortgage rates. This behavior further exacerbates the shortage of available homes in the market.

As we examine the commonalities between these two seemingly unrelated issues, we can draw some important insights. Both the mental health care system and the housing market are facing imbalances in supply and demand. In the case of mental health care, the lack of psychiatric facilities and behavioral-health services is leaving mentally ill individuals without the necessary treatment they need. Similarly, in the housing market, homeowners are holding onto their properties, creating a shortage of available homes for potential buyers.

To address these challenges, we can consider three actionable pieces of advice:

  • 1. Increase investment in mental health care infrastructure: The government and private sectors need to invest in expanding psychiatric hospitals and behavioral-health services. By increasing the availability of treatment options, we can alleviate the strain on the current system and ensure that mentally ill individuals receive the care they need.
  • 2. Encourage homeownership turnover: To address the shortage of available homes, homeowners should be incentivized to sell their properties. This could be achieved through financial incentives, such as tax breaks or subsidies, that make it more appealing for homeowners to sell and move to a new property. This would increase the supply of homes in the market and provide more options for potential buyers.
  • 3. Improve access to affordable housing: Alongside encouraging homeownership turnover, it is crucial to prioritize the development of affordable housing options. By increasing the availability of affordable homes, we can address the housing shortage and ensure that individuals from all income brackets have access to suitable housing.

In conclusion, the overcrowding in psych wards and the booming market for brand-new homes may seem unrelated at first glance. However, a closer examination reveals the underlying imbalances in supply and demand that both issues face. By addressing these challenges through increased investment in mental health care infrastructure, encouraging homeownership turnover, and improving access to affordable housing, we can work towards a more equitable and balanced society.

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