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Being Poor Alone Does not Make People Homeless. Being Poor where Housing Is Unaffordable Makes People Homeless.

Illustration by Rachel Zhu

Centering high housing costs in the homelessness debate marks a major change from previous discourse. Conservative politicians like Texas Governor Greg Abbott often cite the need for increased mental health treatment, anti-drug programs, and job training to reduce homelessness. Many liberal areas have focused on expanding shelter capacity and increasing outreach. Some progressive organizations focus on reducing poverty to combat homelessness. But none of these solutions can meaningfully reduce homelessness though because they do not address the main cause of mass homelessness: expensive housing. 

If poverty were the main cause of homelessness, it would follow logically that the areas with the highest rates of poverty would also be the places with the highest rates of homelessness. Nothing could be further from the truth.

Consider the example of Mississippi. The state boasts the smallest per capita homeless population across the United States, coming in at 3.7 homeless people per 10,000 residents. Mississippi also happens to be the most impoverished state in the country, with nearly one out of every five residents living in poverty. According to the conventional wisdom that poverty predicts homelessness, Mississippi is a paradox. Likewise, none of the other traditional explanations for homelessness offer much help, as mental health and drug treatment aren’t exactly stellar in a state that ranks dead last in healthcare access and quality. In theory, Mississippi should have a serious homelessness crisis, yet the state outperforms the entire country.

On the other end, there are a handful of states that far exceed the national average in their per capita homeless population. D.C., New York, Hawaii, California, Oregon, and Washington, all very wealthy, have astonishingly high rates of homelessness. They’re also some of the most consistently Democratic places in the country, and have some of the largest budgets to address homelessness of any state. Yet, despite their wealth and wide safety nets, the homelessness rate of a state like New York is 1100% greater than that of Mississippi. Mississippi is the most glaring case, but the trend is true across the board that poor states consistently have significantly less homelessness than rich states.  

The idea that mass homelessness is caused primarily by poverty or a lack of drug and mental health treatment is weak at best, and misleading and harmful at worst. Wealthy places with lots of social programs consistently have homelessness rates many times greater than the poorest states with shoestring budgets. There is, however, a measure that closely predicts where homelessness is concentrated. That measure is housing affordability.

For the price of one median home in Hawaii, you could buy five median homes in Mississippi. The gulf in housing costs between poor states like Mississippi and rich states like Hawaii is massive, especially for low income people. For low income renters, the share that are “extremely cost burdened” (paying more than half of their income to rent) is just 1 in 20 in Mississippi. Even among those who are poor in the state, few are being totally crushed by their rent costs. The same cannot be said for California, where the rate of extreme cost burden for low income renters is more than triple

What is important is that states like Mississippi with very low housing costs are also the states that have the lowest rates of homelessness. States with low homelessness tend to have high unemployment, mass poverty, bad health outcomes, low social spending, and poor economies, all things that should contribute to high homelessness.  The fact that housing cost correlates so strongly with homelessness is telling, especially in the face of all these other factors.  The impact of housing cost on homelessness is severely underrated in contemporary policy debate, and efforts to increase housing affordability in rich states appear to be a promising way to reverse their homelessness crisis.

There are other ways to illustrate the relationship between housing costs and homelessness. The national poverty rate both before and after the pandemic has been at an all-time low. Yet in the last ten years, there were more homeless people on the streets of cities like New York than in any other recorded decade. While declining poverty cannot possibly explain rising homelessness, the trend makes sense when considering that median home prices have increased eight-fold in NYC in the past 40 years

All of this is not to say that a state like Mississippi should be a model for the rest of the nation. There’s no policy that Mississippi is implementing that is meaningfully preventing homelessness. Home prices are so low there because it can be a brutal place to live with limited access to things like economic opportunity, upward mobility, and health treatment. However, the state and others like it still serve as an illustration of the importance of housing affordability in preventing homelessness. Mississippi’s lesson for the places in the country with high rates of homelessness is to first and foremost get their housing to be more affordable.

There are still some cities that have managed to pair strong economic and wealth growth with reductions in homelessness, even if they are few. Houston is one example, as it’s become one of the fastest growing cities in the US while still managing to cut its homeless rate in half over the past decade. The city has accomplished this in large part by putting more than 20,000 homeless people into permanent housing. Other cities can learn the lesson from Houston that a promising solution to homelessness is more affordable housing.

Increased mental health and drug abuse treatment, job training, and anti-poverty programs are all tremendously good things that help a lot of people. However, none of them should be considered significant homeless-prevention policies because the homelessness crisis is not a poverty crisis, it’s a housing crisis. People experience sudden financial hardship all over the country, but they only become homeless in places where they can’t afford costly housing.  The only policies that can truly make meaningful dents in the homelessness rate are ones that address the root problem and make it easier for people experiencing financial hardship to afford a home.