Homelessness in the U.S.

I just read an interesting report by the Western Regional Advocacy Project (WRAP) about the real causes of homelessness in the United States. The main findings of the report, called Without Housing, are:

• The number of homeless people in the US roughly tripled during the 1980s. Currently, about 3 million people experience homelessness each year, roughly 40% of whom are children.
• The social reasons people normally cite as the causes of homelessness (such as mental illness, drug and alcohol problems, etc.) have not changed dramatically since the 1970s.
• Direct subsidies from the US government that help low-income people pay their rent, as well as direct subsidies that build housing intended for low-income occupants, have fallen sharply since the late 1970s, and in particular, were cut drastically in the Reagan administration of the early 1980s.
• On the other hand, the tax deduction we have for payment of mortgage interest, which is basically a housing subsidy for the middle and upper classes, has increased dramatically in the same time period. As of 2005, the budget for this tax deduction is roughly four times the budget for low-income housing subsidies.
• There has also been a loss of existing public subsidized housing, and privately-owned low-cost rental units have also declined in numbers.
• Considering all of this, the report concludes that the real reason for the sharp rise in homelessness since the early 1980s is not the slight (if any) increase in social problems, but the sharp decrease in affordable housing. The social problems that lead individuals to need lower-priced housing definitely exist. However, in the 1970s, these people did not end up homeless because they could find affordable or subsidized housing. They cannot now, so if we actually want to end homelessness in the United States, we need to have more affordable housing or housing subsidies available. Working on mental health and drug rehabilitation is probably a fine idea, but it is unlikely to end homelessness by itself.
• Some methods for increasing the amount of affordable housing (which could be offset by lowering the housing subsidy for middle- and upper-income homeowners):
  • Raise the minimum wage, so that people with jobs can afford to pay more for existing housing.
  • Offer more rent assistance to people who cannot afford to pay for existing housing.
  • Offer more assistance with other expenses (health care, child care, food, clothing), so that more money is left over for housing expenses.
  • Create more housing with lower rent, either publicly-owned or privately-owned housing.

Here are a few other thoughts, based mostly on 2005 reports from the U.S. Census Bureau:

• The current federal minimum wage is $5.15 per hour. This translates to an annual income of $10,712 for someone who works 52 weeks at 40 hours per week, which puts that person at about the official federal poverty level for a single adult, and well below the poverty level if that person is the sole earner for a larger family.
• 12.6% of people in the U.S. are currently living in poverty.
• The poorest 20% of U.S. households (i.e. about 23 million households) earn less than $19,000 per year.
• Housing is considered "affordable" by experts if it costs less than about 30% of a household's income (the National Association of Realtors says 25%, Fannie Mae and the National Association of Home Builders say 28%, and the MIT Center for Real Estate says 30%, for instance). Using the 30% figure, a household with $19,000 per year in income can afford up to $475 per month in housing costs.
• The census bureau reports that there are only about 8.2 million rental units (occupied or vacant) that cost $475 per month or less. Considering that there are 23 million households who need housing that costs approximately this much, this simple estimate says that only about 36% of the poorest households in the U.S. are likely to find rental housing they can afford. Perhaps some of them can purchase housing, but it seems likely that most will be renting... No wonder we have a problem.