Pew Examines How Housing Costs Drive Homelessness Levels

Date Published: 
October 11th, 2023

A new analysis from Pew Charitable Trusts examines the link between elevated levels of homelessness in urban areas where rents are high, and homelessness rising when rents rise. After comparing homelessness and rent data in 2017 and 2022, Pew found that metro areas that saw fast-rising rents also experienced stark increases in the level of homelessness, while locales that saw slow rent growth experienced declines in homelessness.

Over the period of 2017-2022, in the six metro areas where homelessness rose sharply (Sacramento, Fresno, Raleigh, Phoenix, Austin, and Tucson), rents increased faster than the national average. For example, the Fresno and Tucson areas added just 2.7% and 3.2%, respectively, to their housing stock between 2017 and 2021, despite high demand for homes. The Austin, Texas area added 15.8% to its housing stock despite its restrictive zoning code, but that still fell short of its 22.7% growth in households over that time. With so many households seeking too few homes, rents climbed.

Over that same five-year period, the four urban areas examined by Pew (Minneapolis, Houston, Chicago, and Philadelphia) that experienced declines in homelessness also saw low rent growth. These findings corroborate recent Pew research indicating that cities that added to their housing supply in recent years, typically by reforming their local zoning codes to allow more apartments to be built, succeeded in keeping rent growth low.

In tandem with the work showing that housing costs are the primary driver of homelessness, the findings suggest that allowing more housing to be built, whether subsidized or not, can reduce homelessness. This contributes to the large body of academic research that has consistently found that homelessness in an area is driven by housing costs, whether expressed in terms of rents, rent-to-income ratios, price-to-income ratios, or home prices. Further, changes in rents precipitate changes in rates of homelessness.  


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