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Housing Costs and Homelessness

Housing Costs and Homelessness


Homelessness, by definition, is a housing problem. Therefore, many advocates claim that with sufficient housing, we can solve homelessness. But the definition of “homelessness” itself is problematic. The term was popularized by advocates in the 1970s and ‘80s as a way to combine a host of different social problems into a single issue that they claimed could be “solved” with housing.[1] In reality, homelessness is usually the result of a cascade of different issues, and, for many of the hardest cases, reducing housing costs will not solve them.

Many students of homelessness have shown that there is a correlation between housing costs in a city and homelessness.[2] Areas with higher rental and housing prices have higher rates of homelessness. But the surprising thing is how small the connection is. One would think that the recent book Homelessness is a Housing Problem would provide the very best evidence for the connection. Yet their statistics show that cities’ rental burden, or their income-to-rent ratio, explains just 13% of the variation in homelessness across cities. By contrast, higher January temperature explains 20% of the variation in homelessness, and it explains 60% of “unsheltered” homelessness.[3]

As the data on temperature shows, the sheltered and unsheltered homeless are very distinct populations. About two-thirds of the homeless population are sheltered and the vast majority of people in shelters stay in them for less than two months. People in shelters, of which about half are families, tend to have relatively low rates of mental illness and drug or alcohol abuse. Less than 10% have mental health issues, and less than a third have substance use issues. For this group, housing costs are important, and reducing these costs will reduce the number of sheltered homeless.[4]

By contrast, almost half of the unsheltered population are chronically homeless, meaning they have been homeless for more than 12 months.[5] According to a recent study, the vast majority of the unsheltered have severe alcohol and drug abuse problems, as well as severe mental illnesses — over 75% in each case.[6] For this group, housing costs do not seem like an overwhelming issue.

We also know the unsheltered homeless are mobile, which means housing costs in any one location will not affect them. While advocates often note that the majority of the homeless originally come from the city in which they now live, in many cases it is a slim majority. In Los Angeles, 35% of the unsheltered, which are the vast majority of the homeless in that city, were homeless before they moved to LA.[7] In Austin, Texas, it’s 35% of the total homeless population and surely a much larger proportion of the unsheltered.[8] Even many of those who moved to a city before they became homeless report that they had lived in the city for a short time, and thus were likely attracted to some of the social service support, as interviews with the homeless indicate.[9]

One piece of evidence that chronic homelessness is not just a housing problem is that even when given free or almost-free homes with extensive services (permanent supportive housing, as it is known), many homeless people leave. Even supporters note that those provided with a supportive housing unit leave at a rate of about 10 to 25 percent a year.[10] In fact, 11% of all the homeless in San Francisco were previously in a subsidized housing unit before becoming homeless again.[11]

A randomized control trial of a Denver supportive housing program found that only 83% were stably housed one year after receiving free housing. Three years into the program, only 68% remained in the homes. Even this is something of an underestimate, because about 10% of the people offered a free home could not be convinced to go inside of it. If even a free and “supportive” housing unit cannot keep someone inside, then housing costs are not the main issue for this group.

One of the reasons for the low retention rate in housing for the homeless is the number of deaths of people in these programs. In San Francisco, about 14% of all overdoses in the city occurred in the 1% of the population that lived in these supportive housing units.[12]  In the Denver program, about 4% of those given a ‘permanent’ home had died after one year; in three years, 12% had died. This rate of death was about 40% higher than those left on the street without any housing. A report tried to note the bright side, highlighting the higher “percent of living participants who stayed housed.”[13] If anyone proposed a program that cost hundreds of thousands of dollars per person and yet led to almost 1 of every 8 participants dying in three years, they might be accused of sadism, yet such are held up as “best practices” by the current focus on “Housing First.”

Clearly, housing costs don’t seem to be an important issue for the unsheltered and the chronically homeless. These groups have severe problems with drugs and mental illness, they are mobile, they respond to things like temperature more than rent, and even when given free or almost-free housing they often do not remain inside. All of this makes it even more odd that the current Housing First model focuses entirely on giving homes to those chronically homeless where housing costs are the least important issue for them.

We should work to reduce the housing costs in our major metropolitan areas, most especially by deregulating the housing market and improving the incentives to build.[14] Reducing housing costs will help reduce the number of those who spend time in shelters. But it will most likely have little effect for the large number of those who live on the streets. When Americans think about the “homeless,” they often think of these most difficult, and most expensive, cases. And for this group, counter to the facile definition hoisted on their plight by advocates, housing will not solve their problems.


[1] Stephen Eide, Homelessness in America.” (Rowman & Littlefield, 2022).

[2] Arpit Gupta, “Homelessness and Housing,” City Journal, May 31, 2022, https://www.city-journal.org/homelessness-and-housing.

[3] Gregg Colburn and Clayton Page Aldern, Homelessness Is a Housing Problem (University of California Press, 2022).

[4] U.S. Department of Housing and Urban Development, The 2021 Annual Homeless Assessment Report (AHAR) to Congress, by Meghan Henry et al. Washington, D.C.: HUD, 2022. https://www.huduser.gov/portal/sites/default/files/pdf/2021-AHAR-Part-1.pdf.; Substance Abuse and Mental Health Services Administration, Current Statistics on the Prevalence and Characteristics of People Experiencing Homelessness in the United States, by U.S. Department of Health and Human Services. Washington, D.C.: HHS, 2011. https://www.samhsa.gov/sites/default/files/programs_campaigns/homelessness_programs_resources/hrc-factsheet-current-statistics-prevalence-characteristics-homelessness.pdf.

[5] Greg B. Smith, “Sleeping Behind the Bronx Zoo: Why Some New Yorkers Choose Streets over Shelters,” The City, April 5, 2021, https://www.thecity.nyc/2021/4/5/22366758/new-yorkers-choose-streets-over-homeless-shelters.

[6] Janey Rountree, Nathan Hess, and Austin Lyke, “Health Conditions Among Unsheltered Adults,” California Policy Lab, October 6, 2019, https://www.capolicylab.org/health-conditions-among-unsheltered-adults-in-the-u-s/.

[7] Los Angeles Homeless Services Authority, Greater Los Angeles Homeless Count 2020. LAHSA, 2020. https ://www.lahsa.org/documents?id=4558-2020-greater-los-angeles-homeless-count-presentation.

[8] Ending Community Homelessness Coalition, 2020 Point-In-Time Count Austin/Travis County, by Sarah Duzinski and Matt Mollica. ECHO, 2020. https://www.austintexas.gov/edims/document.cfm?id=340650. (In San Francisco, over 30% of all of the homeless population are from outside the city.); The Battery Candy, “5 Myths About Homelessness,” issuu, The Battery Candy Issue 5, n.d. https://issuu.com/thebatterycandy/docs/candyvol5_issuu/s/78242.

[9] Heather Mac Donald, “San Francisco, Hostage to the Homeless,” City Journal, Autumn 2019, https://www.city-journal.org/san-francisco-homelessness.; Denette Wilford, “’They Pay You to be Homeless Here’: San Francisco man gets $620 month living on streets,” Toronto Sun, February 10, 2022, https://torontosun.com/news/world/they-pay-you-to-be-homeless-here-san-francisco-man-gets-620-month-living-on-streets.

[10] “Housing First,” National Alliance to End Homelessness, April 20, 2016, https://endhomelessness.org/resource/housing-first/.

[11] Applied Social Research, “San Francisco Homeless Count & Survey 2017 Comprehensive Report,” San Francisco Department of Homelessness and Supportive Housing, 2017, https://hsh.sfgov.org/wp-content/uploads/2017/06/2017-SF-Point-in-Time-Count-General-FINAL-6.21.17.pdf.

[12] Joaquin Palomino and Trisha Thadani, “Broken Homes,” San Francisco Chronicle, April 26, 2022, https://www.sfchronicle.com/projects/2022/san-francisco-sros/.

[13] Mary Cunningham et al, “Breaking the Homelessness-Jail Cycle with Housing First https://www.urban.org/sites/default/files/publication/104501/breaking-the-homelessness-jail-cycle-with-housing-first_1.pdf (The average age of the participants was 44, so this was not an exceptionally old group).

[14] Judge Glock, “Why California Cities Already Lost Control (And Why the State Needs to Push Housing),” Medium, April 8, 2019, https://medium.com/cicero-news/why-we-already-lost-local-control-in-california-and-why-the-state-needs-to-push-housing-f82dd0abe63d.