Why people are homeless
Two trends are largely responsible for the rise in homelessness over the past 15-
20 years: a growing shortage of affordable rental housing and a simultaneous
increase in poverty. Below is an overview of current poverty and housing statistics,
as well as additional factors contributing to homelessness. A list of resources for
further study is also provided.
POVERTY
Homelessness and poverty are inextricably linked. Poor people are frequently
unable to pay for housing, food, child care, health care, and education. Difficult
choices must be made when limited resources cover only some of these
necessities. Often it is housing, which absorbs a high proportion of income that
must be dropped. Being poor means being an illness, an accident, or a paycheck
away from living on the streets.
In 1997, 13.3% of the U.S. population, or 35.6 million people, lived in poverty (U.S.
Bureau of the Census, 1998a). While the number of poor people remains has not
changed much in recent years, the number of people living in extreme poverty has
increased. In 1997, 14.6 million people -- 41% of all poor persons -- had incomes
of less than half the poverty level. This represents an increase of over 500,000
from 1995. Forty percent of persons living in poverty are children; in fact, the 1997
poverty rate of 19.9% for children is almost twice as high as the poverty rate for
any other age group.
Two factors help account for increasing poverty: Eroding employment
opportunities for large segments of the workforce, and the declining value and
availability of public assistance.
Eroding Work Opportunities
Media reports of a growing economy and low unemployment mask a number of
important reasons why homelessness persists, and, in some areas of the country,
is worsening. These reasons include stagnant or falling incomes and less secure
jobs which offer fewer benefits.
While the last few years have seen growth in real wages at all levels, these
increases have not been enough to counteract a long pattern of stagnant and
declining wages. Low-wage workers have been particularly hard hit by wage
trends. Despite recent increases in the minimum wage, the real value of the
minimum wage in 1997 was 18.1% less than in 1979 (Mishel, Bernstein, and
Schmitt, 1999). Factors contributing to wage declines include a steep drop in the
number and bargaining power of unionized workers; erosion in the value of the
minimum wage; a decline in manufacturing jobs and the corresponding expansion
of lower-paying service-sector employment; globalization; and increased
nonstandard work, such as temporary and part-time employment (Mishel,
Bernstein, and Schmitt, 1999).
Declining wages, in turn, have put housing out of reach for many workers: in every
state, more than the minimum wage is required to afford a one- or two-bedroom
apartment at Fair Market Rent (National Low Income Housing Coalition, 1998). 1
In fact, in the median state a minimum-wage worker would have to work 87 hours
each week to afford a two-bedroom apartment at 30% of his or her income, which
is the federal definition of affordable housing. In addition, 40% of households with
"worst case housing needs" -- households paying over half their incomes for rent,
living in severely substandard housing, or both -- have at least one working
person. This represents a 32% increase in working households with worst case
housing needs from 1993 to 1995 (U.S. Housing and Urban Development, 1998).
The connection between impoverished workers and homelessness can be seen in
homeless shelters, many of which house significant numbers of full-time wage
earners. A survey of 30 U.S. cities found that almost one in five homeless persons
is employed (U.S. Conference of Mayors, 1998). In a number of cities not
surveyed by the U.S. Conference of Mayors - as well as in many states - the
percentage is even higher (National Coalition for the Homeless, 1997).
The future of job growth does not appear promising for many workers: a 1998
study estimated that 46% of the jobs with the most growth between 1994 and 2005
pay less than $16,000 a year; these jobs will not lift families out of poverty
(National Priorities Project, 1998). 2 Moreover, 74% of these jobs pay below a
livable wage ($32,185 for a family of four).
Thus, for many Americans, work provides no escape from poverty. The benefits of
economic growth have not been equally distributed; instead, they have been
concentrated at the top of income and wealth distributions. A rising tide does not
lift all boats, and in the United States today, many boats are struggling to stay
afloat.
Decline in Public Assistance
The declining value and availability of public assistance is another source of
increasing poverty and homelessness. Until its repeal in August 1996, the largest
cash assistance program for poor families with children was the Aid to Families
with Dependent Children (AFDC) program. Between 1970 and 1994, the typical
state's AFDC benefits for a family of three fell 47%, after adjusting for inflation
(Greenberg and Baumohl, 1996). The Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (the federal welfare reform law) repealed
the AFDC program and replaced it with a block grant program called Temporary
Assistance to Needy Families (TANF). Current TANF benefits and Food Stamps
combined are below the poverty level in every state; in fact, the median TANF
benefit for a family of three is approximately one-third of the poverty level. Thus,
contrary to popular opinion, welfare does not provide relief from poverty.
Welfare caseloads have dropped sharply since the passage and implementation of
welfare reform legislation. However, declining welfare rolls simply mean that fewer
people are receiving benefits -- not that they are employed or doing better
financially. Early findings suggest that although more families are moving from
welfare to work, many of them are faring poorly due to low wages and inadequate
work supports. Only a small fraction of welfare recipients' new jobs pay above-
poverty wages; most of the new jobs pay far below the poverty line (Children's
Defense Fund and the National Coalition for the Homeless, 1998). Moreover,
extreme poverty is growing more common for children, especially those in female-
headed and working families. This increase can be traced directly to the declining
number of children lifted above one-half of the poverty line by government cash
assistance for the poor.
As a result of loss of benefits, low wages, and unstable employment, many
families leaving welfare struggle to get medical care, food, and housing. Many lose
health insurance, despite continued Medicaid eligibility: a recent study found that
675,000 people lost health insurance in 1997 as a result of the federal welfare
reform legislation, including 400,000 children (Families USA, 1999). In addition,
housing is rarely affordable for families leaving welfare for low wages, yet
subsidized housing is so limited that fewer than one in four TANF families
nationwide lives in public housing or receives a housing voucher to help them rent
a private unit. For most families leaving the rolls, housing subsidies are not an
option. In some communities, former welfare families appear to be experiencing
homelessness in increasing numbers (Children's Defense Fund and the National
Coalition for the Homeless, 1998).
In addition to the reduction in the value and availability of welfare benefits for
families, recent policy changes have reduced or eliminated public assistance for
poor single individuals. Several states have cut or eliminated General Assistance
(GA) benefits for single impoverished people, despite evidence that the availability
of GA reduces the prevalence of homelessness (Greenberg and Baumohl, 1996).
Disabled people, too, must struggle to obtain and maintain stable housing. In
1998, on a national average, a person receiving Suplemental Security Income
(SSI) benefits had to spend 69% of his or her SSI monthly income to rent a one-
bedroom apartment at Fair Market Rent; in more than 125 housing market areas,
the cost of a one-bedroom apartment at Fair Market Rent was more than a
person's total monthly SSI income (Technical Assistance Collaborative & the
Consortium for Citizens with Disabilities Housing Task Force, 1999).
Thus, most states have not replaced the old welfare system with an alternative
that enables families and individuals to obtain above-poverty employment and to
sustain themselves when work is not available or possible.
HOUSING
A lack of affordable housing and the limited scale of housing assistance programs
have contributed to the current housing crisis and to homelessness.
The gap between the number of affordable housing units and the number of
people needing them has created a housing crisis for poor people. Between 1973
and 1993, 2.2 million low-rent units disappeared from the market. These units
were either abandoned, converted into condominiums or expensive apartments, or
became unaffordable because of cost increases. Between 1991 and 1995, median
rental costs paid by low-income renters rose 21%; at the same time, the number of
low-income renters increased. Over these years, despite an improving economy,
the affordable housing gap grew by one million (Daskal, 1998). By 1995, the
number of low-income renters in America outstripped the number of low-cost
rental units by 5.4 million rental units - the largest shortfall on record (Daskal,
1998). More recently, the strong economy has caused rents to soar, putting
housing out of reach for the poorest Americans. Between 1995 and 1997, rents
increased faster than income for the 20% of American households with the lowest
incomes (U.S. Department of Housing and Urban Development, 1999). This same
study found that the number of housing units that rent for less than $300, adjusted
for inflation, declined from 6.8 million in 1996 to 5.5 million in 1998, a 19 percent
drop of 1.3 million units. The loss of affordable housing puts even greater numbers
of people at risk of homelessness.
The lack of affordable housing has lead to high rent burdens (rents which absorb a
high proportion of income), overcrowding, and substandard housing. These
phenomena, in turn, have not only forced many people to become homeless; they
have put a large and growing number of people at risk of becoming homeless. A
recent Housing and Urban Development (HUD) study found that 5.3 million
unassisted, very low-income households had "worst case needs" for housing
assistance in 1995 (U.S. Department of Housing and Urban Development, 1998).
3 This figure is an all-time high and represents an 8% increase over the 1989
figure.
Housing assistance can make the difference between stable housing, precarious
housing, or no housing at all. However, the demand for assisted housing clearly
exceeds the supply: only about one-third of poor renter households receive a
housing subsidy from the federal, state, or a local government (Daskal, 1998). The
limited level of housing assistance means that most poor families and individuals
seeking housing assistance are placed on long waiting lists. From 1996-1998, the
time households spent on waiting lists for HUD housing assistance grew
dramatically. For the largest public housing authorities, a family's average time on
a waiting list rose from 22 to 33 months from 1996 to 1998 - a 50% increase (U.S.
Department of Housing and Urban Development, 1999). The average waiting
period for a Section 8 rental assistance voucher rose from 26 months to 28
months between 1996 and 1998. 4 Excessive waiting lists for public housing mean
that people must remain in shelters or inadequate housing arrangements longer.
Consequently, there is less shelter space available for other homeless people,
who must find shelter elsewhere or live on the streets.
A housing trend with a particularly severe impact on homelessness is the loss of
single room occupancy (SRO) housing. In the past, SRO housing served to house
many poor individuals, including poor persons suffering from mental illness or
substance abuse. From 1970 to the mid-1980s, an estimated one million SRO
units were demolished (Dolbeare, 1996). The demolition of SRO housing was
most notable in large cities: between 1970-1982, New York City lost 87% of its
$200 per month or less SRO stock; Chicago experienced the total elimination of
cubicle hotels; and by 1985, Los Angeles had lost more than half of its downtown
SRO housing (Koegel, et al, 1996). From 1975 to 1988, San Francisco lost 43% of
its stock of low-cost residential hotels; from 1970 to 1986, Portland, Oregon lost
59% of its residential hotels; and from 1971 to 1981, Denver lost 64% of its SRO
hotels (Wright and Rubin, 1997). Thus the destruction of SRO housing is a major
factor in the growth of homelessness in many cities.
Finally, it should be noted that the largest federal housing assistance program is
the entitlement to deduct mortgage interest from income for tax purposes. In fact,
for every one dollar spent on low income housing programs, the federal treasury
loses four dollars to housing-related tax expenditures, 75% of which benefit
households in the top fifth of income distribution (Dolbeare, 1996). Moreover, in
1994 the top fifth of households received 61% of all federal housing benefits (tax
and direct), while the bottom fifth received only 18%. Thus, federal housing policy
has thus not responded to the needs of low-income households, while
disproportionately benefitting the wealthiest Americans.
OTHER FACTORS
Particularly within the context of poverty and the lack of affordable housing, certain
additional factors may push people into homelessness. Other major factors which
can contribute to homelessness include the following:
Lack of Affordable Health Care: For families and individuals struggling to pay the
rent, a serious illness or disability can start a downward spiral into homelessness,
beginning with a lost job, depletion of savings to pay for care, and eventual
eviction. In 1997, approximately 43.4 million Americans had no health care
insurance (U.S. Bureau of the Census, 1998b). More than a third of persons living
in poverty had no health insurance of any kind. The coverage held by many others
would not carry them through a catastrophic illness.
Domestic Violence: Battered women who live in poverty are often forced to choose
between abusive relationships and homelessness. In a study of 777 homeless
parents (the majority of whom were mothers) in ten U.S. cities, 22% said they had
left their last place of residence because of domestic violence (Homes for the
Homeless, 1998). In additions, 46% of cities surveyed by the U.S. Conference of
Mayors identified domestic violence as a primary cause of homelessness (U.S.
Conference of Mayors, 1998).
Mental Illness: Approximately 20-25% of the single adult homeless population
suffers from some form of severe and persistent mental illness (Koegel et al,
1996). Despite the disproportionate number of severely mentally ill people among
the homeless population, increases in homelessness are not attributable to the
release of severely mentally ill people from institutions. Most patients were
released from mental hospitals in the 1950s and 1960s, yet vast increases in
homelessness did not occur until the 1980s, when incomes and housing options
for those living on the margins began to diminish rapidly. According to the Federal
Task Force on Homelessness and Severe Mental Illness, only 5-7% of homeless
persons with mental illness need to be institutionalized; most can live in the
community with the appropriate supportive housing options (Federal Task Force
on Homelessness and Severe Mental Illness, 1992). However, many mentally ill
homeless people are unable to obtain access to supportive housing and/or other
treatment services. The mental health support services most needed include case
management, housing, and treatment.
Addiction Disorders: The relationship between addiction and homelessness is
complex and controversial. While rates of alcohol and drug abuse are
disproportionately high among the homeless population, the increase in
homelessness over the past two decades cannot be explained by addiction alone.
Many people who are addicted to alcohol and drugs never become homeless, but
people who are poor and addicted are clearly at increased risk of homelessness.
During the 1980s, competition for increasingly scarce low-income housing grew so
intense that those with disabilities such as addiction and mental illness were more
likely to lose out and find themselves on the streets. The loss of SRO housing, a
source of stability for many poor people suffering from addiction and/or mental
illness, was a major factor in increased homelessness in many communities.
Addiction does increase the risk of displacement for the precariously housed; in
the absence of appropriate treatment, it may doom one's chances of getting
housing once on the streets. Homeless people often face insurmountable barriers
to obtaining health care, including addictive disorder treatment services and
recovery supports. The following are among the obstacles to treatment for
homeless persons: lack of health insurance; lack of documentation; waiting lists;
scheduling difficulties; daily contact requirements; lack of transportation; ineffective
treatment methods; lack of supportive services; and cultural insensitivity. An in-
depth study of 13 communities across the nation revealed service gaps in every
community in at least one stage of the treatment and recovery continuum for
homeless people (National Coalition for the Homeless, 1998).
Even when disabling conditions such as addiction or mental illness are treated,
homeless addicts and mentally ill people must compete with all other poor people
for a dwindling supply of low-income housing. Homelessness can thus be seen as
a perverse game of musical chairs, in which the loss of "chairs" (low cost housing)
forces some people to be left standing (homeless). Those who are least able to
secure a chair -- the most disabled and therefore the most vulnerable -- are more
likely to be left without a place to sit.
