Over the last couple decades, rents in America have been on the rise. Housing experts describe “severely cost-burdened households” — people who are spending far too much of their income on rent. Citizens rightly insist “the rent is too damn high.” Researchers and citizens alike suspect this status quo is hurting the nation’s efforts to end homelessness. A recent study, Priced Out: Rising Rent and Homelessness Across America, affirms the suspicions.
The study, commissioned by real estate company Zillow and conducted by a team that included Alliance Research Council Co-Chair Dennis Culhane, confirms a link between escalating housing prices and homelessness. This link is especially present in some of the nation’s largest cities. Affordable housing, therefore, is a critical solution to homelessness.
The Tipping Point
Priced Out reveals a tipping point among rising housing prices. When housing prices force typical households to spend more than 32 percent of their income on rent, those communities begin to experience rapid increases in homelessness. This finding puts a new perspective on a measure already in common use: Government agencies and researchers have long been guided by the notion that individuals and families shouldn’t be spending more than 30 percent of their income on housing costs. We can see that there are broad consequences of passing that threshold.
A Tale of Two Cities: Los Angeles and Houston
Delving into the realities of actual communities is the best way to understand the study. Comparing Los Angeles and Houston is helpful.
L.A.’s housing costs are well over the tipping point. Median-income residents spend more than 45 percent of their incomes on rent. In 2017, the city and county had the second largest number of people experiencing homelessness in the country and one of the highest homeless rates in California. L.A. is not alone. Other major cities have median rents well above the national norm. Only 15 percent of Americans live in such areas but those areas account for 47 percent of the homeless population.
Circumstances in Houston are quite different. Homelessness rates are lower than the researchers expected based on housing costs. Houston belongs to a group of communities in which the relationship between affordability and homelessness is weaker than in places like L.A.
Why? The Zillow team suggests that these communities possess specific assets and/or liabilities that cause them to defy expectations.
For example, in recent years, Houston overhauled its homeless services system. After being targeted for an intervention by HUD, the city made effective use of data and improved agency coordination. While speaking at a recent Zillow event, a representative from Houston’s coalition for the homeless stressed the importance of redirecting extensive resources from programs that weren’t producing permanent housing results to ones that are.
This tells us that an effective crisis response system is an essential tool for combating the affordable housing crisis.
Priced Out sends a strong message to any community concerned about homelessness: we must preserve and create affordable housing.
Key considerations for any community could include:
- Rewriting local ordinances to reduce barriers to creating housing and prioritize building affordable housing.
- Using city-owned land for affordable housing development.
- Exploring new housing models such as single room occupancy units, smaller housing, or accessory dwellings.
Homeless service providers can look to cities like Houston for model practices in responding to homelessness. Through prioritizing Housing First approaches and effective systems management, they too can create community assets that help disrupt the connection between housing affordability and homelessness.