Homelessness and Housing Systems Overview

Last Updated Feb 21, 2023

This guide is intended to help donors gain a deeper understanding of the U.S. housing system and outlines opportunities to address the root causes of homelessness. By Madeleine Alegria

Did you know?
  • The average rent in the United States rose by 15% in 2022, and almost 30% in some major cities.
  • Due to an explosion in gentrification, Native Hawaiians and Pacific Islanders are overrepresented by 210% in Oahu’s homeless population.
  • Twenty-eight percent of LGBTQ youth and 44% of Native/Indigenous LGBTQ youth reported experiencing homelessness or housing insecurity at one point in their lives.

Housing Systems Overview

Housing is less affordable today than at any time in decades, and only getting worse. After adjusting for inflation, home prices have skyrocketed 118% since 1965 while income has only increased by 15%. The exponential rise in housing costs has a direct impact on renters, who are experiencing historic rent increases. A 2020 study estimated that a “$100 increase in median rent was associated with a 9% increase in the estimated homelessness rate.” 

Building more affordable housing is the only way to address the national housing crisis, and yet, many Americans fight against new affordable housing developments when they’re too close to their home. Suppressing the supply of houses artificially drives up the cost of housing leading to economic harm for everyone. A 2015 study found that when cities are prohibitively expensive for middle- and low-income residents to live in high-productivity areas, U.S. aggregate economic growth declines by more than 50%. 

The most recent figures from 2020 estimate that 580,466 people are experiencing homelessness, a 2% increase from 2019 and the fourth consecutive year of incremental population growth. In 2021, HUD noted that for the first time in years, homelessness amongst veterans and families did not improve. Homelessness is a complex issue, but understanding how our housing systems are failing is critical for imagining equitable and effective solutions.

People Experiencing Homelessness Demographics infographic

Why Donors Should Care

Racism Is Built into U.S. Housing Systems

Centuries of racist American housing policies have directly cost BIPOC communities generations of wealth building.

The United States' genocidal campaign to remove Indigenous peoples from their lands has directly resulted in Native communities experiencing poverty at disproportionate rates. There is an acute housing crisis in Native communities and on reservations with more than a third of Native families living in homes that are overcrowded to prevent homelessness or lacking basic amenities, such as plumbing, a refrigerator, or heating. 

During the 1933 housing shortage, the federal government began a program explicitly designed to segregate housing. Since its inception in 1934, the Federal Housing Administration subsidized housing for white Americans but refused to insure mortgages in and near African-American neighborhoods in a policy known as redlining. The lasting impacts of these policies are evident today, and progress has largely stalled. While overt racism in housing policies is no longer legal, race-based discrimination in the housing industry is just as pervasive.

In 2006, Black and Hispanic homebuyers with incomes above $200,000 were more likely to be given a subprime loan than white families making less than $30,000.

These families were more likely to lose their homes during the Great Recession, causing extraordinary wealth loss. Over the past 15 years, Black homeownership in the U.S. has declined more than any other racial group and Black Americans’ homeownership rates today are about as low as they were in the 1960s when race-based discrimination was legal. 

Homes in white neighborhoods are consistently appraised at higher values than homes in communities of color, even when house and neighborhood characteristics are consistent.

Home Appraisals by Race infographic

For most U.S. families, their home is their greatest asset, so when home values go up families have more wealth to invest in retirement, college education, or medical expenses. On average, white families have 20 times more wealth than BIPOC families.

Given centuries of racist housing policies, it should come as no surprise that communities of color experience homelessness at higher rates

Homelessness Rates by Race infographic

Housing is a Human Right

Safe, stable, and affordable housing has been internationally recognized as a human right since the UN’s Universal Declaration of Human Rights, published in 1948. The federal government defines housing as affordable when housing costs are no more than 30% of a household’s income. As the cost of living continues to rise, 40% of Americans report that they wouldn’t be able to cover a $400 emergency

Homelessness can happen to anyone and trauma does not discriminate. Traumas such as domestic violence, debilitating health issues, chronic poverty, grief, or job loss can uproot a person’s life and make affording housing impossible. Nearly 1 out of 3 Americans are one missed paycheck away from being homeless. Contrary to popular misconceptions, homelessness is not directly caused by poor mental health or addiction. Indeed, studies show that the number one indicator of a city's homelessness rate is the price of housing, not addiction. This is reflected in states such as Hawaii, the most expensive state to reside in and the third leading state in homelessness, which ranks dead last in drug use.

Additionally, the explosion of homelessness is a relatively new phenomenon and can be directly linked to the gutting of welfare programs, including long-term housing assistance, in lieu of ineffective short-term shelter systems. By focusing on the symptoms of homelessness, instead of the root causes, we put the onus on the individual, rather than the inequitable systems that create homelessness. 

Common Types and Causes of Homelessness

Not all people experience homelessness the same, and understanding how someone becomes homeless is imperative to providing the necessary support and services to break the cycle. 

Transitional and hidden homelessness typically occurs after a traumatic life change or event such as domestic violence, job loss, family crisis, or negative health event.

People experiencing transitional homelessness often have jobs but are unable to afford housing and other expenses.

Young people, including those who have aged out of the foster care system and members of the LGBTQ community who cannot rely on familial support, are at an increased risk of experiencing transitional homelessness.

Young people experiencing housing insecurity are less likely to be counted in official homelessness metrics since young people are more likely to seek refuge at friends’ houses, couch surf, or sleep in cars rather than on the streets. This is often referred to as “hidden homelessness.” Because of this, young people are often left out of traditional homelessness services. More needs to be done to prevent LGBTQ+ homelessness, such as increasing advocacy for LGBTQ youth in schools and connecting caregivers with resources and mentoring support to decrease the number of queer youth who become homeless from family rejection. When family reunification is not possible, the National Alliance to End Homelessness recommends rapid re-housing that is tailored to young adults to prevent homelessness and direct youth to long-term affordable housing. 

People who experience up to three periods of homelessness in a calendar year are considered episodically homeless and after four or more periods, a person is considered chronically homeless. Persons experiencing chronic or episodic homelessness make up less than 20% of the unhoused population. However, because more than 60% of chronically homeless individuals have experienced lifetime mental health problems and more than 80% have experienced lifetime alcohol or drug problems, these individuals require more support and services. Once someone becomes homeless, breaking the cycle becomes increasingly difficult without intervention. The longer someone spends living on the streets, the more their health and wellbeing deteriorates. Poor health and lack of access to health care exacerbate addiction as people turn to substances to self medicate. 

There is a direct correlation between mass incarceration and chronic homelessness.

Formerly incarcerated people are 13 times more likely to experience homelessness than the general population.

Additionally, people living on the streets are more likely to encounter police and experience incarceration, fueling the cycle. People experiencing unsheltered homelessness reported an average of 21 contacts with police within six months, 10 times the number of sheltered people. Due to systemic inequities in prison and housing policies, BIPOC individuals are overrepresented in both incarceration and unhoused statistics. African American adults are 5.9 times more likely to be incarcerated than white adults, and Hispanic adults are 3.1 times more likely. The longer an individual is socially and economically isolated, the more difficult it becomes for them to reintegrate into their community. To address chronic homelessness, the United States Interagency Council on Homelessness recommends permanent supportive housing

Housing Solutions

Emergency shelters are one of the most prevalent tools used to combat homelessness, but the shelter system is woefully inadequate. At their best, emergency shelters provide short-term immediate protection for someone who would otherwise be sleeping outside. However, shelters are chronically underfunded and unequipped to shoulder the burden of America’s housing crisis. Reports from the Los Angeles Homeless Services Authority (LAHSA) found that out of 60 shelters funded by LAHSA, more than half were not filling all their beds. Additionally, 25 of those facilities were failing to meet the minimum standards required to get people off the streets for good. Because shelter conditions are often hostile and unsanitary, many unhoused people sleep on the streets.

One report by the New York Senate found 78% of homeless shelters have open health violations.

Additionally, shelters often impose restrictions that make them inaccessible, including long wait times, drug tests, no pets, and separating couples and families with older children.

Transitional/temporary housing is designed to bridge the gap between emergency shelters and permanent housing for certain segments of the unhoused population, including emancipated youth, single mothers, new immigrants, those recovering from addiction, and those with ongoing mental and physical health needs. Typically, transitional housing provides a supportive environment where residents can overcome traumas, work on sobriety, and/or work on job and life skills. A study of a transitional housing program for young adults found that youth employment rates were higher in the program than before participation. Some transitional housing programs, such as halfway houses, are geared toward formerly incarcerated people and have demonstrated success in reducing recidivism rates. Transitional housing is most beneficial for those who are recently homeless or working homeless, but there is little evidence to suggest that transitional housing is effective for chronic homelessness unless it can refer residents to long-term or permanent affordable housing

Housing First (permanent and supportive housing) is based on the premise that housing is a basic human right, not a reward for clinical success. Housing First provides permanent housing for chronically homeless adults in safe and supportive housing first, where participation in supportive services is available but not mandatory. One study found that programs using the Housing First model resulted in positive changes in substance use, employment, and family relationships noting, “One client got out of the shelter, remained abstinent from drugs and alcohol, and reunited with her family for the first time in years …” In the first year of operation, DESC, a Seattle Housing-First nonprofit, reported saving taxpayers $4 million, and though there are no requirements for residents to change their drug or alcohol consumption, DESC noted that residents reduced consumption rates before and after moving in. The United States Interagency Council on Homelessness defines Housing First as a proven method of ending all types of homelessness and the most effective approach to ending chronic homelessness.

Who Is Affected?

Survivors of Domestic Violence

Domestic violence is one of the leading causes of homelessness for women and families. Violence at home is one of the major predictors of whether children will experience homelessness with 80% of homeless mothers experiencing domestic violence. Domestic violence is pervasive across all races, but BIPOC survivors experience additional hurdles when seeking help, including a lack of English language proficiency, distrust of service providers, and fear of deportation or criminalization. Culturally competent responses to domestic abuse are imperative to overcoming barriers for BIPOC survivors. 

Low-income People

Most households become homeless because they simply do not make enough money to pay for housing. Approximately one in four renters are classified as having “extremely low income” by HUD, and yet in 2019, the United States had a shortage of 7 million homes for low-income renters, resulting in only 37 affordable rental homes available for every 100 low-income renters.

It is estimated that 53% of people living in homeless shelters and 40% of unsheltered people are employed either full time or part time.

Despite net income growth in the United States in 2019, racial inequities in income remain largely unchanged.

Household Earnings by Race infographic

According to a 2009 Urban Institute study, more than 13.4 million families with children in the U.S. were living in poverty, of those families 30% were Hispanic and 22% were Black or African American. As wages fail to keep pace with inflation and the price of housing continues to climb, more families are at risk of becoming homeless. 

People Who Lack Access to Quality Healthcare

When people do not have access to healthcare, injury or illness quickly becomes a financial crisis often resulting in job loss. Despite record improvement in healthcare access thanks in large part to the Affordable Care Act, racial disparities in healthcare access persist. Between 2011 and 2020, Black Americans were more likely to report lacking a usual source of healthcare, and were more likely to report being worried about medical bills and problems paying medical bills than white counterparts. Underlying mental or physical health conditions are exacerbated when living on the streets; homelessness takes 20 years off a person’s lifespan. Nearly one-third of all visits to the emergency room are made by people experiencing chronic homelessness. 

Healthcare and Homelessness infographic

People Experiencing Eviction

Half of homeless adults cite evictions or other rental problems as the cause of their homelessness. Black and Latino families are seven times more likely to be evicted than white families, and women are evicted 11% more than men. Historically Black neighborhoods are disproportionately impacted by evictions with neighborhoods experiencing gentrification having the highest eviction rates.

Get Involved

  • A New Way of Life Reentry Project supports formerly incarcerated women through housing and legal services to stop the unhoused-to-prison pipeline.
  • The Ali Forney Center in New York is dedicated to protecting LGBTQ youth from the harm of homelessness by providing transitional housing, health services, and other supportive services.
  • Building Opportunities For Self-Sufficiency (BOSS) is combating the root cause of homelessness in Alameda County, Calif. with programs focused on housing security, reentry and justice, and neighborhood impact hubs.
  • Detroit Action [501(c)(4)] is fighting for housing and economic justice. It provides leadership development workshops, organizer internships, nonpartisan voter education and mobilization drives, and direct action.
  • Support local measures that change zoning laws or allow for more affordable housing to help undo America’s legacy of racist housing policy and boost the American economy.
  • Learn more about the impact of eviction policies on homelessness and advocate for expanded renter protections.
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