Homelessness Is a Housing Problem

1. Homelessness is a housing problem, not an individual failing

Homelessness Is a Housing Problem

Structural, not individual. Despite popular narratives blaming homelessness on personal failings like mental illness or substance abuse, the data shows that housing market conditions are the primary driver of homelessness rates across cities. Individual vulnerabilities may determine who becomes homeless within a community, but they don't explain why some cities have much higher rates than others. The root cause is a lack of affordable housing, not personal pathologies.

Variation reveals causes. By examining the substantial variation in homelessness rates between U.S. cities, we can identify the true drivers. Cities with similar poverty rates, unemployment, mental illness, and drug use often have vastly different homelessness levels. What does correlate strongly with high homelessness? Expensive housing markets with low vacancy rates. This points to housing affordability and availability as the key factors.

2. Housing market dynamics drive regional variation in homelessness rates

Housing market conditions explain why Seattle has four times the per capita homelessness of Cincinnati.

Supply and demand imbalance. In cities with high homelessness rates, housing supply has failed to keep up with population and job growth, driving up prices. Factors like geographic constraints (e.g. water, mountains) and restrictive zoning limit new construction. Meanwhile, economic booms increase housing demand. This imbalance leads to soaring rents and near-zero vacancies.

Elasticity matters. Cities vary in how responsive their housing supply is to increased demand - their "elasticity." Places like Houston and Charlotte have elastic supply, quickly building new housing as populations grow. But coastal cities like San Francisco and Seattle have inelastic supply due to geography and regulation. With inelastic supply, population growth translates directly into higher rents rather than more housing units. This pushes more people into housing instability and homelessness.

3. Individual factors and local culture don't explain geographic differences

Homelessness is low where poverty and unemployment are greatest; neither drug use nor mental illness reliably explains regional variance; race remains an individual risk factor for homelessness that fails to explain city-to-city variation.

Debunking common explanations. Many assume cities with more poverty, unemployment, mental illness, or drug use have more homelessness. The data doesn't support this. Some of the poorest cities have the lowest homelessness rates. Weather and political factors also fail to explain the differences.

Risk factors vs root causes. While factors like mental illness increase an individual's risk of homelessness, they don't drive overall rates. Otherwise, cities with more of these vulnerable populations would consistently have higher homelessness. They don't. These are better understood as risk factors that interact with housing market conditions, rather than root causes.

4. High rents and low vacancy rates are key predictors of homelessness

For a highly impoverished household, it is likely easier to access housing in Detroit or St. Louis, where median rents are between $600 and $700 per month, than in San Francisco and Santa Clara County, where costs are three to four times higher.

Rent levels matter most. Absolute rent levels, not housing cost burden (rent as a percentage of income), best predict homelessness rates. For the poorest households, there's a hard floor on how low rent can go. In expensive cities, even the cheapest units are out of reach for many.

Scarcity drives instability. Low vacancy rates mean fierce competition for available units. When vacancies drop below about 5%, it becomes extremely difficult for vulnerable households to secure housing. Any setback - job loss, health issue, family problem - can mean losing housing with little hope of finding a new place.

5. Boomtowns face the perfect storm for housing instability

These cities embody the perfect storm for housing instability and homelessness: high growth, low supply elasticity, high housing costs, and extremely low vacancy rates.

Growth without adequate housing. Booming tech hubs like San Francisco, Seattle, and Boston have seen massive job and population growth without commensurate housing construction. Their inelastic housing markets can't keep up with demand.

Prosperity paradox. These cities are victims of their own success. Their thriving economies attract more residents, driving up housing costs. But many new jobs don't pay enough to afford local housing. The result is stark inequality and widespread housing instability amid great wealth.

6. Public perception must shift to view homelessness structurally

If homelessness continues to be seen exclusively as a personal problem—and not one of structure—policy prescriptions will remain reactive in nature.

Beyond individual blame. As long as the public views homelessness primarily through the lens of personal failings, support for systemic solutions will be limited. A shift in understanding is needed to build political will for major policy changes.

Housing as infrastructure. Just as we view transportation or energy systems as critical public infrastructure, housing must be seen as an essential public good, not just a private commodity. This perspective supports greater public investment and intervention in housing markets.

7. Solving homelessness requires massive investment in affordable housing

To put it another way, ending homelessness in King County would require spending two to four times the approximately $260 million currently spent on homelessness and ELI housing in the region.

Scale of investment needed. Truly addressing homelessness will require public spending far beyond current levels. While this may seem daunting, it's achievable with political will. For context, many regions spend more on transportation infrastructure.

Multiple funding streams. Solutions include:

• Expanded federal housing vouchers
• Low-interest federal loans for affordable housing construction
• Increased low-income housing tax credits
• State and local taxes dedicated to housing (e.g. real estate transfer taxes)
• Public land trusts to create permanently affordable housing

8. A systems approach is needed to prevent and end homelessness

Homelessness is by definition, circular, as it begins and ends with housing.

Three key stages:

1. Inflow: Prevent housing loss through rental assistance, eviction protection, etc.
2. Crisis response: Provide immediate shelter and support services
3. Outflow: Create pathways to stable, permanent housing

Balancing priorities. While emergency shelters are necessary, they don't solve homelessness - they just make it less visible. Investments must be balanced between crisis response and long-term housing solutions. Simply optimizing the shelter system isn't enough; adequate permanent housing is crucial.

Cross-sector collaboration. Homelessness intersects with many systems - housing, healthcare, criminal justice, education, etc. Effective solutions require coordination across agencies and sectors to address root causes and provide comprehensive support.

Last updated: October 11, 2024