The Economics of Homelessness

The specific circumstances under which a family may become homeless are unique to the nearly 40,000 individuals that experience it every day in New York City. But there are common themes to the overarching problem, such as low wages, high rents, and joblessness.

Recently released data give us a picture of the state of homelessness across the country and why the situation is getting worse.

This week, the National Alliance to End Homelessness released a State of Homelessness 2011 report outlining the scope of the problem. They found that the homeless population across the country increased by 3 percent between 2008 and 2009, with the largest increase among homeless families. Additionally, risk factors for homelessness became more prevalent during this time:

• Unemployment increased by 60 percent.
• Real income for the working poor decreased by 2 percent, with some states seeing decreases of more than 10 percent.
• A majority of households with incomes below the federal poverty level spent more than half of their monthly incomes on rent.
• People living in doubled-up situations increased by 12 percent.

Keep in mind, these indicators are largely from the beginning stages of the economic downturn. More recently, data has shown that most new job growth has been in low-paying industries, providing little improvement in many families’ economic situations. This is something that we have seen first-hand as homeless families try to get back on their feet and it remains the major flaw of the NYC Department of Homeless Services’ work-first approach to addressing homelessness.

As the gap between real incomes and housing costs continues to grow larger, homelessness is affecting more and more families, including those that once had the security of high paying jobs. It is these facts that remind us of the structural causes of homelessness and what ultimately needs to be done to address the problem.