Why focus on housing?
On any given day in the US, approximately 580,000 people experience homelessness with about 110,000 people of those experiencing chronic homelessness (defined as experiencing homelessness for more than one year or four homelessness events). This issue particularly affects the Black and Latinx communities, with Black people representing 39% of people experiencing homelessness and more than 50% of homeless families with children, despite only representing 13% of the US population. And, homelessness tells only part of the story – on average, nearly one in three renters experience housing insecurity (defined as a household spending spending more than 30% of its income on rent). Multiple factors contribute to the affordable housing crisis, including shortages of units available and decreasing affordability; for example, estimates of housing availability show that there are only 24 units available for every 100 extremely low-income renters (households making below 30% of the area median income), and on the affordability front one in four renters overall pay at least 50% of their income on housing.
Beyond supply and financial issues, additional barriers push housing security further out of reach for many. For example, with those who are justice-involved, criminal records often prevent renters from passing background checks in public and private housing markets. And more broadly, studies have shown that landlords in private markets have surreptitiously been biased against those using Section 8 vouchers, despite the provisions of the Fair Housing Act.
Big ideas for investing and scaling
Beyond needed increases in federal investments (e.g., increases in housing development and rental assistance), there are two scalable models of private and local efforts working to combat barriers to housing for those experiencing homelessness and housing insecurity.
Models in the private rental market have increased housing supply by working as middlemen between landlords and those seeking rapid rehousing or facing temporary homelessness. For example, HousingFirst Lab dually works with landlords and tenants and locates low-income renters wh need housing and guarantees these tenants’ rents in the case of missed payments.
Beyond providing novel solutions for landlords (e.g., rent guarantees, immediately filling vacancies), this model also actively works to eliminate barriers renters may face throughout the housing process (e.g., eliminating biases in application processes, mediation of tenant-landlord issues, providing rental assistance), crucial for equity in housing solutions.
Additionally, smaller municipalities have piloted research-backed Housing First programs for those who are chronically homelessness. These pilots often operate under the assumption that city resources (e.g., corrections, emergency room visits) can be spent on housing individuals that will prevent the need for future downstream costs.
For example, in Santa Clara’s “Welcome Home” pilot, the city identified and housed the “frequent fliers” of the emergency room and local jail systems with the highest need for services, while providing optional housing and healthcare services. By the end of the evaluation period, 86% of people remained housed, with a significant reduction in psychiatric emergency department usage (with other outcomes harder to measure due to covariates). A similar program in Denver (Denver Supportive Housing Social Impact Bond) successfully housed 77% of participants in stable housing after three years, with ~40% reduction in arrests, ~30% reduction in jail stays, and ~40% reduction in costly emergency department visits—which offset roughly 3/4ths of the original investment from the City of Denver.
What to do next
These pilots have demonstrated the impact of Housing First models; given the necessary investment capital, these social investments lead to decreases in people experiencing homelessness, reducing medical emergencies, and reducing avoidable justice-involvement, particularly for those who typically face the most issues in the rental markets. Though “return-on-investment” is not immediately recouped, these Housing First models are becoming more popular options for funders seeking to support social investments, and who can invest over longer time horizons.