While homelessness in the United States is on the decline overall, new research shows that places where people spend more than a third of their income on housing are more likely to see big increases in homelessness. “The areas that are most vulnerable to rising rents, unaffordability, and poverty hold 15 percent of the U.S. population – and 47 percent of people experiencing homelessness,” says a report from property marketplace Zillow.
More and more people are gravitating toward metropolitan areas, putting pressure on housing resources and rent prices. There are two thresholds that lead to more homelessness, according to the report. The first is when people are putting 22% or more of their income toward rent or a mortgage. “Any uptick in a community’s rent affordability beyond 22 percent translates into more people experiencing homelessness,” the research says. The second is when people are paying more than 32% for housing. In such a circumstance, homelessness begins to tip into crisis territory.
Though the Department of Housing and Urban Development estimates that 553,742 people live without shelter or in emergency or transitional housing, Zillow’s research suggests that figure is actually much higher. The number that Zillow research fellow Christopher Glynn of the University of New Hampshire, Thomas Byrne of Boston University, and Dennis Culhane of the University of Pennsylvania came up with is 660,996.
Furthermore, the data indicates that of the 386 markets reviewed by this analysis, 100 of them are rent burdened. In Monroe County, Florida, home of the popular tourist and retirement destination Key West, the median market rate rent is 62.9% of the area’s median household income.
What happens in these high rental markets? You probably already know: “Some high-income renters who typically rent more expensive apartments turn to lower-priced rentals, pushing middle-income renters into even less expensive housing. The lowest earners are forced to work multiple jobs, find multiple roommates and otherwise struggle to make ends meet,” the report says. When a city’s more reasonably priced housing is all taken, higher earners turn to more affordable cities, in turn pushing out middle- and low-income earners in those regions.
Of course, rental prices are not the only factor causing homelessness. For instance, a study from the National Alliance to End Homelessness shows that between 2007 and 2016, North Dakota saw a decrease in the number of “poor, renter households experiencing a severe housing cost burden” and yet in the year between 2015 and 2016, homelessness increased 18%–the most of any state that year.
While homelessness and its solutions remain complex, it is hard to ignore the role that rising rents play in the phenomenon. It’s harder still to overlook this issue as more big tech companies look beyond Silicon Valley for top talent. Amazon’s second and third headquarters, which are slated to open in New York City’s Long Island City and Virginia’s Crystal City, will no doubt put pressure on the already squeezed resources in those areas. The question is, will city officials do anything about the coming housing crunch?