The Economics of Housing the Homeless: What Causes the Problem and Why Haven’t Federal Policies Helped?
Journal IssueVolume 18, 2011
In the mid-1980s, homelessness increased in visibility across the United States, and interest rose as to the causes and possible solutions to the problem. Among others studying the issue, economists focused much of their attention on the central problem faced by the homeless – a lack of housing. Among the reasons economists cited for homelessness included a rise in housing prices, the filtering out of low-quality units in the housing market, increasing income inequality, and income shocks; these issues, combined with other factors that can make a person or family more susceptible to homelessness – such as substance abuse, mental illness, or social isolation – likely led to the increasing numbers of homeless in the 1980s. Looking at the causes of homelessness from an economic perspective also reinforces the reasons why many federal policies have been unable to solve or greatly decrease the problem in the past several decades. Since homelessness is still a concern across the country – especially in the wake of the recent recession – there continues to be a need to evaluate and find additional solutions to the problem.