Addressing Homelessness

By Nathan Monga and Jonathan Griffin | Vol . 24, No. 33 / September 2016


Did You Know?

  • A recent survey found that 564,708 people experienced homelessness on a single January night in 2016.
  • Following a surge during the recent recession, the rate of homelessness decreased from 18.3 per 10,000 people in 2015 to 17.7 per 10,000 in 2016.
  • Production of low-cost rental units has been lagging behind demand since 1980, with 9.9 million low-income renters competing for 4.8 low-cost rental units in 2010.

Each year in the United States, approximately 3 million people spend nights without shelter, 1.3 million of whom are children. An American citizen has a 6.2 percent chance of experiencing homelessness over the course of his or her lifetime, compared to rates of 4 percent in Italy, 3.4 percent in Belgium and 2.4 percent in Germany.

Mental illness and addiction are commonly cited as the primary forces driving homelessness in this country. However, numerous studies point to an additional factor: The quantity of safe and affordable housing has failed to keep pace with demand. The U.S. poverty rate has increased from 11.3 percent in 2000 to 14.8 percent in 2014, spiking demand for low-cost housing. Data tracked by the U.S. Department of Housing and Urban Development (HUD) shows that in 1970, there were 6.5 million low-cost rental units nationwide and 6.2 million low-income renters. By 2010, 9.9 million low-income renters were competing for 4.8 million affordable rental units. The national median rent has been rising with consistency over the years, from $571 per month in 1990, to $602 per month in 2000, to $934 per month in 2014.

Circumstances can place certain people at greater risk of homelessness. While an average U.S. citizen has a 1-in-194 chance of experiencing homelessness in a given year, a released prisoner has a 1-in-13 probability. Someone living with friends or family for financial reasons (known as “doubling up”) has a 1-in-12 risk and a young person recently aged out of foster care has a 1-in-11 chance of becoming homeless.

State Action

Homelessness rates vary regionally and states have chosen a range of approaches to tackling the problem. With 3 million people experiencing homelessness at some point in any given year, state governments have prioritized providing shelter. Allocated in every state government’s budget is funding for public or subsidized housing, paid for with a combination of federal grants and state income taxes. Although many states have helped municipalities establish shelters with beds and soup kitchens, there often aren’t enough resources to care for everyone. When there are not enough safe places for people to go, cities can become more dangerous, and state and local governments have moved to clear the streets of people who might provoke violence. While these policies have helped reduce crime, they can result in high costs within the criminal justice system.

Some states are working on alternatives to criminalization by focusing on preventive measures. Permanent supportive housing (PSH), for example, provides housing and mental health services to those who need it. Rapid rehousing programs (RRH) provide financial support to at-risk individuals to prevent homelessness or to quickly rehouse families who are homeless. Such strategies have been shown to reduce the number of people sleeping outside and using homeless assistance programs, providing long-term savings for the state.

Over the past few years, states have worked to increase their capacities for these programs. From 2014 to 2015, 38 states and the District of Columbia increased capacity in rapid rehousing programs and 35 states increased permanent supportive housing capacity. RRH bed capacity increased by 59.6 percent nationwide in the same time period, while PSH capacity grew 6.3 percent.

States have also been working to identify particularly vulnerable populations. Of the 32 bills passed in state legislatures over the past year that were related to homelessness, six of them specifically targeted children. These ranged from Arizona’s HB 2262, which provides funding for increased access to child care, specifically for families at risk of homelessness, to California’s SB 445, which aims to ensure that homeless children attend school.

Other vulnerable populations include people suffering from mental illness and drug addiction. The services they receive on the street—often from police and emergency medical providers—can be more costly than preventive measures. Florida enacted SB 12 this year to set up treatment programs and to connect people with services before they reach a crisis.

Federal Action

The federal government provides housing primarily through its Section 8 voucher program, which spends more than $19 billion per year to house over 2 million people and families. Other programs assist particularly vulnerable populations. The McKinney-Vento and the Runaway and Homeless Youth acts, for example, aim to prevent children from experiencing homelessness. The Substance Abuse and Mental Health Services Administration helps those with substance abuse and mental health issues and the U.S. Department of Veterans Affairs assists veterans.

The U.S. House introduced HR 4888 in 2016 to allocate an additional $13.6 billion over 10 years to HUD in order to eliminate homelessness nationally. It is currently being reviewed in committee.

The federal government funded “housing first” programs in 65 cities across the country during the administration of President George W. Bush. This policy revealed that a typical person experiencing homelessness costs the government between $35,000 and $150,000 per year due to heavy reliance on shelters and emergency rooms, along with an increased likelihood of incarceration. The program found that these same people could be housed at a cost to taxpayers of $13,000 to $25,000 per year.


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