Exploring the Link Between Public Housing and Homelessness

Are Public Housing and Homelessness Linked? Evidence from Over 150 Large U.S. Metros and 9 International Case Studies Jared N. Schachner, Gary D. Painter, and Junmin Byon USC Homelessness Policy Research Institute 14 February 2024

Homelessness rates vary sharply across U.S. metros: why? Potential Explanations Poverty rates Housing costs Mental illness Law enforcement Weather Illicit drug use Social services Unemployment rates

Prior research: metro differences in rent levels may matter Cities/counties with higher median gross rent have higher homeless PIT counts per capita Metro homeless rates not strongly correlated with metro rates of: poverty, unemployment, mental illness, illicit drug/substance use

Our hypothesis: metro differences in public housing availability may matter, too Public housing consists of units owned, or heavily subsidized, by a government entity In the U.S., federal government often funds public housing units, and local governments administer public housing programs Types of federally-subsidized public housing in the U.S. Units owned outright and managed by government entities Traditional public interventions Supply-side Units whose construction is heavily subsidized by federal government, but unit is developed, owned, managed by private entity Section 8 project based Demand- 10 Housing Choice Vouchers Government-funded subsidies covering a portion of households rent payments to a private entity side

Why metros with more public housing may have lower rates of homelessness Housing affordability Public housing investments may create more slack in local housing markets rental housing more affordable for all residents It follows that public housing reduces homelessness, if previously- documented link between metro rents and homelessness rates holds Vulnerability targeting Public housing may be uniquely equipped to serve the housing needs of the highest-risk individuals, who struggle to navigate the private housing market due to: unstable employment/income, prior evictions, criminal justice involvement, low credit scores, disability, etc. Metros with more public housing units (adjusted for population size) exhibit lower rates of homelessness. Core Hypothesis

How we tested our hypothesis using multiple data sources Core analyses Key analytic steps Correlate homelessness rates and public housing concentration for 168 U.S. metros (2017-20); then rerun correlations: U.S. Metro Homelessness Rates Point-in-Time Counts, 2017-20 Continuums of Care Data sources Disaggregating homelessness rates by sheltered versus unsheltered individuals U.S. Metro Public Housing Concentration HUD Picture of Subsidized Housing, 2017-20 Core-Based Statistical Areas Disaggregating public housing concentration by type (i.e., public housing, Section 8 project-based subsidies, Housing Choice Vouchers) Supplementary analyses Examine international data across nine developed countries with robust private housing markets to gauge whether a clear link between public housing and homelessness emerges beyond the U.S. context

Initial evidence of public housings potential link to lower homelessness rates L.A. stands out for its high unsheltered homelessness rate and low concentration of public housing; Philadelphia and Chicago have higher concentrations of public housing and much lower rates of unsheltered homelessness

A deeper dive reveals important nuance: supply-side public housing may matter most Supply-side Public Housing Units (traditional public housing, Section 8 project-based) and Unsheltered Homelessness Rate All Public Housing Units and Total Homelessness Rate, by CBSA CORRELATION -0.12 Weak, negative relationship CORRELATION -0.40 Moderately strong, negative negative link CORRELATION -0.40 Moderate, Metros with higher levels of public housing exhibit lower rates of homelessness; This negative association appears considerably stronger when linking unsheltered homelessness rates to metro- level concentrations of supply-side public housing (i.e., traditional public housing, Section 8 project-based units).

Why might supply-side public housing be more effective than vouchers? Potential explanations for vouchers limited effect on homelessness Individuals at highest risk of homelessness may have difficulty completing necessary paperwork, fulfilling stringent program requirements Administrative burdens Even if one receives a voucher, it may be difficult to find a rental unit that fits both the individual s preferences and the program s parameters Constrained supply of qualifying units 10 Even if unit identified, some landlords may hesitate to accept vouchers given intensive paperwork/inspection processes and business considerations (e.g., applicants low credit scores) Limited landlord participation Accessing traditional public housing and project-based subsidized units is not contingent on pricing dynamics and landlord decisions in the same way vouchers are; administrative burdens may also be more manageable when the private market is bypassed. Thus, supply-side intervention may be more effective in reducing homelessness

Looking abroad: Is there a public housing- homelessness link in other nations, too? Homeless as % of total population Social rental dwellings as % of total Rent control policies % of dwellings completed in last year % of total population spending >40% income on mortgage, rent U.S. 0.18% 3.60% 1.0% 11% Yes, local Australia 0.48% 4.40% 1.8% 7% Yes, local Austria 0.25% 23.60% 1.6% 5% Yes, national Netherlands 0.23% 34.10% 0.9% 6% Yes Denmark 0.11% 21.40% 1.0% 15% Yes, national Finland 0.07% 10.00% 1.3% 8% Norway 0.07% 4.00% 0.9% 8% Japan 0.00% 3.20% 1.5% 8% Yes, national Hong Kong 0.00% 28.50% Yes, national No clear link between country-level social rental (public housing) concentration and homelessness; the devil may be in the details, with program design and institutional context determining effectiveness Source: Affordable housing database - OECD. https://www.oecd.org/housing/data/affordable-housing-database/

Looking abroad: The Case of Finland Finland has dramatically reduced its homelessness rate, which was 2x that of the U.S. in 1987, not through supply-side intervention but an expansive voucher program that mitigates the U.S. voucher program s key constraints Available to households of all types, with simple eligibility requirements (i.e., permanent residency, income under threshold) and minimal paperwork Administrative burdens Voucher value increases substantially in high-cost municipalities; program subsidizes up to 80% of costs for myriad housing types, including owned Constrained supply of qualifying units 10 The extensive coverage of the program likely reduces its potential stigmatization among landlords Landlords may be unaware of subsidy, since it is often provided directly to recipient household Limited landlord participation Finland has paired this program with robust Housing First interventions

Implications of our work for U.S. housing policy aimed at ending homelessness America s current approach to government-subsidized housing, which relies heavily on the Housing Choice Vouchers, is unlikely to substantially reduce homelessness due to program design and implementation deficiencies. Two alternative paths are more promising: Substantial reinvestments in traditional public housing and Section 8 project-based housing that avert thorny challenges of voucher programs Supply-side interventions Redesign voucher programs in ways that mitigate administrative burdens, unit eligibility constraints, and landlord hesitation and then rapidly expand Overhauled voucher program 1 The paths are not mutually exclusive; whichever option(s) chosen should be paired with robust expansion of Housing First programs

For more information, please contact: Dr. Jared Schachner, jschachn@usc.edu