Feature Story

January 8, 2009

Number of Homeless Families Climbing Due to Recession

Center on Budget and Policy Priorities:

The Center on Budget has released a new paper, “Number of Homeless Families Climbing Due to Recession; Recovery Package Should Include New Housing Vouchers and Other Measures to Prevent Homelessness”.

The key findings are:

* In the next few years, the nation is likely to experience the sharpest increases in severe poverty in over 30 years. We project that about 1 million more families with children will fall into deep poverty (below half the poverty line) and thus be at risk of housing instability and homelessness, if unemployment reaches the 9 percent level predicted by Goldman Sachs. Increased homelessness could have adverse long-term consequences, especially for children. Various studies have found that housing instability and homelessness lower academic performance, increase the chances of repeating a grade, and reduce high school completion rates. Homelessness also puts children at greater risk of serious physical health problems.

* New data suggest that hardship and homelessness are already growing. We include specific findings in the report on spikes in the number of homeless families in New York City, Massachusetts, Connecticut, Hennepin County (Minneapolis), and Los Angeles County. Two recent national surveys support these data. In a fall 2008 survey by the U.S. Conference of Mayors, 16 of the 22 cities that provided data on the number of homeless families with children reported an increase in 2008, some of them substantial. (Louisville reported a 58 percent increase.) In another national survey, one in five responding school districts reported having more homeless children in the fall of 2008 than over the course of the entire 2007-2008 school year.

* The housing market crisis adds to the risk of increased homelessness. Foreclosures have pushed many families into the rental market, driving up rents in many areas and making housing less affordable. National data indicate that at least 20 percent of foreclosed properties are not owner-occupied, and in many parts of the country, half or more of households living in foreclosed buildings are renters.

* To minimize the risk of large increases in homelessness, and the attendant educational setbacks and health problems, we recommend that the recovery package include:

(1) Funding for 200,000 additional housing vouchers. Noted researcher and former HUD Policy Director Jill Khadduri has written, “An extensive body of careful research has demonstrated that housing vouchers are critically important both for preventing families with children from becoming homeless and for helping those who do enter the shelter system to leave it for permanent housing and not become homeless again.” At a cost of roughly $2.1 billion, Congress could provide vouchers to enable 200,000 additional families to afford decent housing. Importantly, Congress can design this provision in a way that does not create budget pressures after 2010.

(2) A significant funding increase for homelessness prevention assistance through HUD’s Emergency Shelter Grant program. With an additional $1.5 billion to $2 billion, states and localities, through existing networks of service providers, could provide short-term assistance to enable approximately 400,000 families to avert eviction or obtain new housing.