As the affordability crisis worsens, many Americans stand to experience homelessness.
Homeless populations have been on the rise in major cities in the last year as pandemic aid ended and housing costs rose. Around 421,000 people were homeless in the U.S. last year, with 127,750 of them classified as homeless for a year or more.
Housing affordability is a consistent trigger for homelessness. Zillow-sponsored research shows that the homeless population climbs faster when rent affordability – the share of income people spend on rent – crosses certain thresholds.
The first threshold is 22%. Upticks in a community’s rent affordability beyond 22% leads to more people experiencing homelessness. The second threshold is 32% and increases in rent affordability beyond 32% leads to a faster-rising rate of homelessness, according to the research.
The proof is in the pudding in California, which sports all ten of the most expensive housing markets in the nation as well as 30% of the country’s homeless population.
Just in San Diego County, the number of homeless Americans jumped by 22% from last year.
“People are homeless because their rent is too high. And their options are too few. And they have no cushion,” said Dr. Margot Kushel, author of a UC San Francisco study on how Californians become homeless told CBS News. “And it really makes you wonder how different things would look if we could solve that underlying problem.”
For the study participants who had a lease when they lost their housing, 50% of their income on average was going to rent.
Another issue is the deeply local state of the market. Rents fell in the West in May but rose in the Northeast and Midwest due to increasing demand.
Rents peaked in August of 2022 at $2,053 and have been moderating some since then. Overall, May saw the largest YOY rent decline since 2020 as multifamily housing construction has boomed. Completed multifamily projects jumped 24.2% YOY in April.
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