What's Driving the Record Number of Homeless People?

The annual homelessness assessment from the U.S. Department of Housing and Urban Development (HUD), released last Friday, shows a 12 percent increase in homelessness between 2022 and 2023. The record-high count this year is the highest point of an upward trend that began in 2016.

Pandemic aid likely prevented the 2020 count from going even higher than it did, and data collection challenges rendered the 2021 count unreliable. The largest single-year increase prior to the pandemic was 2.7 percent, back in 2019.

As grim as the figures were — based on data collected in January 2023 — they did not come as a surprise to those actively engaged in this sector.

“We expected to see increases, based on what we’ve seen in communities over the past 11 months,” says Beth Sandor, chief program officer for Community Solutions, a nonprofit working in 107 communities to help them address homelessness. “This data is not telling communities things they don't already know or haven't already been grappling with as they're trying to build more effective and resilient systems.”

Although the year-over-year increase is significant, the fact that the count had been inching steadily upward for several years raises questions for Stephen Eide, a senior fellow at the Manhattan Institute. The 2010s were a period of generally declining numbers nationwide, with increases mostly seen in hot spots such as California, Seattle, Portland and New York City.

“Like many people, I’m trying to understand to what extent the 2020s are going to be different than the 2010s,” Eide says. “What’s concerning about these numbers is that though you still have increases in the hot spot jurisdictions, declines elsewhere weren’t enough to offset those.”

The pandemic may have overturned the lives of those at-risk, but it’s not the only new factor or long-term challenge in play.

Novel Influences

A shortage of affordable housing is a fundamental factor in homelessness, in any year. But housing shortages have existed in years when homelessness was trending in both directions, and there was no dramatic change in housing supply between 2022 and 2023.

Recent times have brought challenges that are new and may take time to understand. The pandemic was disruptive, but it will take years to determine whether job losses, economic stress or other impacts will continue to lead to higher rates of homelessness, Eide says. “Unemployment and poverty don’t automatically create homelessness," he says. "We have very poor places in America, like Mississippi, that don’t have extraordinary homeless rates."

Eide participates in New York City’s point-in-time count, and he does believe that the influx of migrants contributed to an abrupt year-over-year increase there. The homeless population was relatively stable when Eric Adams became mayor in 2021, but has since exploded as migrants who've moved into city shelters are added to homeless counts.

Immigration has not been a major direct contributor to the unhoused population in the past, but that has changed for some jurisdictions in recent years. It’s too early to draw conclusions about the long-term impact, Eide says, but it’s something new that bears watching.

There’s another new dimension to the housing crisis. If too many renters who would have transitioned to homeownership in the past are put off by the combination of rising home costs and much higher mortgage rates, it could create even more pressure on the rental market. This effect could be mitigated if interest rates go down.

Not a Choice

Low vacancy rates in particular areas, high and increasing rents, income-to-rent ratio and housing shortages all correlate to rising homelessness rates.

“People often equate the experience of homelessness with an individual person’s choices — that you would only end up in that situation if you made poor choices,” says Samantha Batko, principal research associate in the Metropolitan Housing and Communities Policy Center at the Urban Institute. “We know that’s not the case."

Homelessness is the most extreme manifestation of a problem that impacts many Americans. More than 8.5 million households are experiencing “worst-case” housing needs, Batko says. These are low-income families that are not receiving housing assistance or vouchers, and spending more than 50 percent of their income on rent. Sometimes, such struggles can lead to homelessness. “The driver of large-scale homelessness is not individual choices, it’s economics,” Batko says.

More than 1 in 4 Americans are considered to be “house poor,” spending more than 30 percent of their income on housing.

A Real-Time Problem

Housing is critical, Sandor agrees, but it’s not the only lever that communities need to pull. Some have been making real progress in reducing homelessness by facilitating coordination and pooling of resources.

The data published by HUD can reveal long-term trends, but data that is 11 months old isn’t sufficient to manage problems on the ground. It’s essential that communities have real-time data about such things as inflow, housing placements and services unhoused individuals need or have accessed. “They can address those things as they are happening and not wait to get a static report at the end of the year," Sandor says.

This starts with counts of the homeless population by name. This is an ongoing process, different from annual point-in-time counts that have been criticized for a propensity to undercount persons who survive by staying out of sight. In a best-case scenario, the by-name data becomes part of a database that keeps track of each person’s progress through the continuum of care, and in (or out) of housing placement.

Success is possible when ending homelessness becomes a shared aim. Homelessness among persons 18 and under has decreased continuously for a decade (although with a bump in 2023), thanks to collaboration and coordination among partners working to end youth homelessness. “That sector is really leading the rest of us on how to make sure the person experiencing homelessness is part of helping to define what the solutions are,” Sandor says.

Not Just One Solution

The fact that the issue has become politically charged isn’t helpful. “We can hope for bipartisan agreement, but I don’t know if we’ll get there in the near term,” says Eide, the Manhattan Institute scholar.

Despite the larger national trend, there are communities that are making progress toward ending homelessness. Some, such as Houston and Hennepin County, Minn., have attracted national attention for their relative rates of success. A fact sheet accompanying the HUD release gives examples of other jurisdictions that reduced their homeless population in 2023.

There’s ample evidence that ending homelessness is more cost-effective than managing it, Sandor says. “We want the solution to homelessness to be one thing — like we can solve it if we just invest more money or work together differently," she says. "The truth is that homelessness is a complex problem that requires both of those things.”