How Local Economic Conditions Affect Area Homelessness

Housing market conditions and poverty rates are linked with area homelessness rates, according to Maria Hanratty. Building on research that uses single-year data to estimate the impacts of local housing and labor market conditions on area homelessness rates, Hanratty uses data from 2007 to 2014, primarily from the US Department of Housing and Urban Development’s (HUD) annual point-in-time homelessness counts, to analyze factors that influence homelessness rates in 399 HUD Continuum of Care communities, localities that have programs to combat homelessness. Hanratty examines the effects of housing market and labor market conditions on five definitions of homelessness, controlling for demographic characteristics, income-tested transfers and supportive services, and year effects. Considering the policy implications of her findings, Hanratty also examines whether poverty and median rents in communities with right-to-shelter laws—laws that guarantee access to shelters—affect homelessness rates.

Key findings

• The median rent, the share of households in rental housing, and the poverty rate are positively associated with homelessness when community fixed effects are not included.
• Only median rent has a positive link with homelessness when community fixed effects are included.
• In communities with right-to-shelter laws, poverty rates have a positive relationship with homelessness.