Why Are People Homeless?

Two trends are largely responsible for the rise in homelessness over the past 20-25 years: a growing shortage of affordable rental housing and a simultaneous increase in poverty.

Poverty: Homelessness and poverty are inextricably linked. Poor people are frequently unable to pay for housing, food, childcare, 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 2005, 13.3% of the U.S. population, or 38,231,521 million people, lived in poverty. Both the poverty rate and the number of poor people have increased in recent years, up from 12.5% or 1.1 million in 2003 (U.S. Bureau of the Census, 2005). 36% of persons living in poverty are children; in fact, the 2004 poverty rate of 17.6% for children under 18 years old is significantly higher than 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.

Shortage of affordable 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). Between 1970 and 1995, the gap between the number of low-income renters and the amount of affordable housing units skyrocketed from a nonexistent gap to a shortage of 4.4 million affordable housing units – the largest shortfall on record (Institute for Children and Poverty, 2001). According to HUD, in recent years the shortages of affordable housing are most severe for units affordable to renters with extremely low incomes. Federal support for low-income housing has fallen 49% from 1980 to 2003 (National Low Income Housing Coalition, 2005).

Extracted from fact sheets prepared by the National Coalition for the Homeless. For more information visit www.nationalhomeless.org.