How Could Homelessness Have Barely Budged During the Recession?

FACT: Rates of homelessness in the U.S. remained essentially unchanged between 2008-2012. This is surprising indeed, especially against the backdrop of a recession that had its origins in the housing […]

FACT: Rates of homelessness in the U.S. remained essentially unchanged between 2008-2012. This is surprising indeed, especially against the backdrop of a recession that had its origins in the housing market, and in which tens of thousands of homeowners lost their homes. 

Evan Horowitz made an important contribution to the conversation, “Does poverty drive homeless rates? Not so fast,” in The Boston Globe this past August. He analyzes multiple datasets and suggests that homelessness is not indexed to poverty rates, as one might assume, but rather to housing costs. It turns out that homelessness is actually lowest in some of the poorer areas of the country such as Mississippi and Alabama; and homelessness stays high and gets higher in red-hot housing markets. He draws the conclusion that the plummeting costs of housing opened up lower-rent stock during the economic recession, and the mechanisms of the market did the rest. 

However, another factor in the story of the recession and its non-rise in homelessness also warrants exploration: the federal government’s intervention.

On February 17, 2009, Congress enacted President Obama’s $787 billion stimulus bill (the American Recovery and Reinvestment Act, or ARRA). One ARRA initiative was HUD’s Homelessness Prevention and Rapid Rehousing Program (HPRP). The HPRP program sent $1.5 billion to local governments to use on behalf of low-income renters.  Communities decided locally how to allocate the funds between HPRP’s two main activities: preventing homelessness, or ending it quickly through a rapid move into housing.

HPRP put into force–at a very large scale, and simultaneously across the nation – a relatively new set of strategies. The approach provides swift access to housing as the primary solution to a housing crisis. HPRP provided time-limited rental assistance as well as services aimed at connecting households with jobs, income supports, and other resources designed to promote stability and economic security. 

This approach and the related Housing First strategy had previously been implemented and studied on a pilot basis, and found to drastically shorten episodes of homelessness.  The HPRP program ushered in a new chapter in federal homelessness investments, shifting resources toward these housing-centered solutions on a wholesale basis, nationally, through new scoring and prioritization structures. 

Data continue to show that these policies work: the National Alliance to End Homelessness reports that between 75 and 91 percent of households remain housed a year after being rapidly re-housed. This group includes some of the nation’s most vulnerable people, the chronically homeless.  In some communities that have shifted local allocations in this direction, homelessness has become shorter, and shelters are used less than in the past. As a result, per-household costs go down, which has in turn freed up resources to produce and operate additional units of long-term, service-intensive supportive housing for the minority of households that need it. At the same time, others would argue that shifting resources in this direction has created problems in other areas, as evidenced by large increases in street homelessness in some of the nation’s largest cities.  

But back to the recession: At the conclusion of the three-year HPRP initiative in 2012, HUD announced that the program had prevented or ended homelessness for 1.3 million people. Could it be, then, that this evidence-based shift in federal policy and related investment, rather than the dynamics of the housing market, was responsible for the steady-state of homelessness?

Clearly, market forces and policy always interact and affect each other, especially in complex economic environments like the low end of a housing market. Having worked directly with communities implementing the HPRP program, however, it appeared to me and my colleagues that the program and its housing-based policies were successful at limiting economic disruption for an extremely vulnerable group of households. 

This crucial positive outcome of the early Obama administration–notoriously hard to demonstrate, as is so often the case when arguing that an intervention “prevented worse from happening”–is rarely discussed in the political domain and deserves to be recognized.

(Photo credit: Chopbooey, via flickr, CC BY-SA 2.0)

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