Study: Homelessness Rate Correlated With Median Rent, not Rates of Poverty or Mental Illness

[iluvatar5150]

Interestingly, there’s actually a modest negative correlation between poverty rates and homelessness rates.

Homelessness Is a Housing Problem

The graphics above demonstrate that variation in rates of homelessness cannot be explained by variation in rates of individual factors such as poverty and mental illness. In fact, where poverty is higher, homelessness is lower, which is perhaps a counterintuitive result. Similarly, there are not higher rates of people with serious mental illness in locations with high rates of homelessness. Therefore, high rates of homelessness are not the result of more people with certain individual vulnerabilities residing in those locations. Poverty rates in Detroit, for instance, are far higher than in San Francisco, but rates of homelessness in Detroit are but a fraction of those observed in the Bay Area.

 

[miamited]

Wow!! Who'd have ever thought that not having a home was a housing problem. How in the world have we not known that for the last 5,000 years?

God bless,
Ted

 

[durangodawood]

This one really ought to appeal to the conservative types who hate govt regulation, as rigid zoning gets called out here.

I happen to agree. While I think there's a place for govt assisted housing solutions, we are also preventing the market from doing what it should and can to increase housing stock.

 

[iluvatar5150]

Wow!! Who'd have ever thought that not having a home was a housing problem. How in the world have we not known that for the last 5,000 years?

God bless,
Ted

“Housing problem” != “not having a house.” It refers to problems with the pricing and availability of housing, and the surrounding policies.

 

[ThatRobGuy]

It's a tough issue and economists haven't been able to "crack the code" as of yet.

They've tried things like rent controls to make the existing housing that's there more affordable, but that has the effect of discouraging developers and potential property owners from investing in new development. (many of the cities with the highest homelessness rates are cities that have rent control)

However, the flip side of that coin, in a non-controlled environment, nothing's stopping gentrification, and a developer coming in and bulldozing a block of 180 affordable apartments, and replacing them with 25 luxury condos.

My cousin was technically "homeless" for a stint when living in California spent some time living out of his car, then a month in a hotel, before finally finding a place. It wasn't because he was poor or had any sort of personal issues. Quite the opposite, he had a really good tech job while he was out there, there were just literally no rentals available within the area (or the few that were, were way out of the price range as making six-figures in certain parts of Cali isn't a guarantee you'll be able to find a suitable place to live)

 

[ozso]

Lots of property is owned by overseas investors. They don't care about living conditions. They just care about how well their portfolio is doing.

What used to be a small cheap studio apartment, goes for at least $2,000 a month. And there's a waiting list.

 

[FireDragon76]

Wow!! Who'd have ever thought that not having a home was a housing problem. How in the world have we not known that for the last 5,000 years?

God bless,
Ted

You'ld think that, but the mumbo jumbo out of the chattering classes this past 50 years has been that homelessness is caused by mental illness and drug use.

Perhaps we shouldn't trust the "common sense" of people who are so uninformed?

 

[7thKeeper]

US should probably try more Housing First initiatives to tackle homelessness. The projects tested in the US showed good results, better than others and after Finland took Housing First as the nation wide policy after reading on those results from the US, homelessness kept dropping steadily here.

 

[essentialsaltes]

This one really ought to appeal to the conservative types who hate govt regulation, as rigid zoning gets called out here.

There's also been some action from the not-so-conservative lawmakers of California. Homeowners can now get automatic approval on building accessory dwelling units (ADUs or mother-in-law flats) on their property.

Local officials no longer have any discretion over ADU applications — if a project checks all the boxes on a list of objective standards, it has to be approved. Owners of single-family homes can add one ADU and a junior ADU no matter how small the lot is, provided certain conditions are met, even if they don’t live there.

 

[bèlla]

We had a huge battle about this a few years ago when they began dismantling public housing. The development was on prime real estate spanning three neighborhoods. They wanted comparable units that fit the demographic.

When TIF was mentioned they complained. Believing it would diminish property values. The solution was two-fold. Most of the residents were given vouchers and allowed to move elsewhere.

Mixed developments were part of the plan. But few exist. They’re still building them. For the most part, property owners got what they wanted. Redevelopment enriched the area.

Some cities are more proactive about affordable housing than others. Credit worthiness and a clean slate are additional barriers. I’m aware of a building that serves ex-offenders. Felony convictions will make you ineligible for some developments. Often the better ones.

 

[iluvatar5150]

It's a tough issue and economists haven't been able to "crack the code" as of yet.

I don't think the issue is that economists haven't been able to crack the code - the issue for economists is that the problems lay outside the relatively narrow scope of their discipline. Homelessness tracks with median rent. Median rent is high when demand is high and supply is constrained. Demand is high when jobs are plentiful and lucrative. Supply is constrained by a lot of things, but in many urban cities, a big factor is NIMBYs preventing changes to zoning laws and NIMBYism is outside the bailiwick of your run-of-the-mill economist.

I was just in San Francisco a couple weeks ago (for the first time in 5-7 years) and was struck by how flat and not built-up everything was outside the downtown core. DC's layout is a bit tighter, but even flatter and less built up - by ordinance IIRC. Compared to NYC, which is almost oppressively tall in places (e.g. walking out of Penn Station).

Here in Baltimore, the Roland Park Country Club (i.e. the country club that admitted it's first black member in 1995 and was originally part of a planned community that literally pioneered racially exclusive real estate covenants) sold off 20 acres of former gold course surrounded by affluent housing, high schools and commercial areas. Original plans were to use it to build affordable housing, but no - the supposedly liberal locals can't have that. No, they banded together and bought it to turn it into a park, in a neighborhood that already has loads of green space.

How is an economist supposed to convince an urban liberal NIMBY that their notion of "maintaining the character of the neighborhood" is little more than gold-plated hypocrisy?

I've been a big fan of Ezra Klein, The Weeds, and other technocratically-minded Vox people for a while and housing policy and nimbyism come up in their work a lot, so if anybody's interested in the subject, they've got a ton of material.

 

[Landon Caeli]

This one really ought to appeal to the conservative types who hate govt regulation, as rigid zoning gets called out here.

I happen to agree. While I think there's a place for govt assisted housing solutions, we are also preventing the market from doing what it should and can to increase housing stock.

When there are people making more money off rising home values than their own employment wages each year, I tend to view that as a societal problem.

 

[Landon Caeli]

We had a huge battle about this a few years ago when they began dismantling public housing. The development was on prime real estate spanning three neighborhoods. They wanted comparable units that fit the demographic.

When TIF was mentioned they complained. Believing it would diminish property values. The solution was two-fold. Most of the residents were given vouchers and allowed to move elsewhere.

Mixed developments were part of the plan. But few exist. They’re still building them. For the most part, property owners got what they wanted. Redevelopment enriched the area.

Some cities are more proactive about affordable housing than others. Credit worthiness and a clean slate are additional barriers. I’m aware of a building that serves ex-offenders. Felony convictions will make you ineligible for some developments. Often the better ones.

I think it would be easier for the government to offer grants or incentives to begin new developments for developers everyehere, which would in turn, offset the housing market, and cheapen the price of homes across the board...

 

[Landon Caeli]

People are just being greedy, when they don't want to lower the prices of the housing market... But as voters, we do have the power to choose the greater good. And it's our tax dollars.

 

[civilwarbuff]

You'ld think that, but the mumbo jumbo out of the chattering classes this past 50 years has been that homelessness is caused by mental illness and drug use.

And yet to deny that mental illness or drug use is either the cause of or the result of homelessness is denying that these certainly contribute to their continuing problem.

 

[Landon Caeli]

And yet to deny that mental illness or drug use is either the cause of or the result of homelessness is denying that these certainly contribute to their continuing problem.

We can also say alcoholism or even poor parenting are major contributing factors. It just depends on how far back we want to dig in getting to root causes.

...Or, we can just solve the immediate problem, and let those other factors work themselves out.

 

[bèlla]

I think it would be easier for the government to offer grants or incentives to begin new developments for developers everyehere, which would in turn, offset the housing market, and cheapen the price of homes across the board...

HUD has an incentive through their lending program. But it isn’t permanent. They’re required to set aside a portion of units for low-income tenants. But when the loan is paid off they don’t have to continue. They can opt out and raise the rent. Many become condos.

The only way grants would cheapen housing was if they passed the savings onto buyers and renters. That’s unlikely to happen. And homeowners are equally culpable. The majority don’t want it in their neighborhood.

 

[Landon Caeli]

HUD has an incentive through their lending program. But it isn’t permanent. They’re required to set aside a portion of units for low-income tenants. But when the loan is paid off they don’t have to continue. They can opt out and raise the rent. Many become condos.

The only way grants would cheapen housing was if they passed the savings onto buyers and renters. That’s unlikely to happen. And homeowners are equally culpable. The majority don’t want it in their neighborhood.

Forget about HUD and all low income housing. What I'm talking about is lowering everyone's home prices by increasing regular home and apartment construction everywhere. Real estate is a market based on demand.

If we applied our tax dollars to fund new homes, the incentive for everyone becomes cheaper housing for new buyers, renters, the currently homeless, etc.

 

[Landon Caeli]

We should be building new cities where no cities currently exist, and refurbishing old areas at the same time.

...That would be the sign of a healthy society anyway.

 

[Landon Caeli]

I'd like to see California begin it by breaking ground in Southern California's High Desert, a barren landscape, hundreds of miles wide, only an hour or two from LA. Why this land all lays undeveloped while home prices an hour away are some of the highest in the country is beyond me.