Zero Hedge
0
All posts from Zero Hedge
Zero Hedge in Zero Hedge,

These Are The Cities Where Rent Hikes Leave The Most People Homeless

The idea that rising rents beget increases in a city’s homeless population is nothing new. But in a recent study, Zillow, the online real-estate database company, used a mix of government and proprietary data to examine how much influence an increase in the first variable has on the second.

The result was surprising.

Using a mix of government data and its own proprietary databases, the company found that the magnitude of rising rents’ impact on local homeless population varies widely between cities, even when two of those cities both have worsening homelessness problems.

For example, when the rent rises 5 percent in Atlanta, another 83 people become homeless. In New York, about 3,000 do, according to a Bloomberg analysis of the data.

“That 5 percent rent hike in Atlanta can be expected to boost the homeless population by 1.5 percent—in New York, by 3.9 percent. Cities such as Pittsburgh, Minneapolis, and Detroit may have smaller homeless populations, but theirs are also sensitive to rising rents."

The key variable here, as Skylar Olsen, a senior economist at Zillow, explains is the amount of slack, or rental vacancy rate, in a given market.

“Rent hikes are likelier to force more people into homelessness in housing markets with less slack, said Skylar Olsen, a senior economist at Zillow. Cities such as Houston and Tampa, she added, have been more successful in preventing rising rents from forcing people out of their homes. The study used the geographic definitions that HUD uses to count homeless populations, she said.

 

The U.S. is short more than 7 million housing units that extremely low-income households can afford, according to the National Low Income Housing Coalition, which defines such households as earning less than 30 percent of area median income. Such low-income renters may not be living in homes with the area’s median rent, but a median rent hike can boost prices for even the cheapest market-rate units.

 

‘There’s an overarching supply of units that’s becoming a real problem,’ Olsen said. ‘People move down the ladder, and it pushes everyone else down, and eventually the bottom rung falls off.’”

Of course, rent isn’t the only factor affecting rates of homelessness; government-assistance programs funded by Housing and Urban Development keep hundreds of thousands of borderline Americans in their own homes.

Now, the White House is proposing legislation that would strip $7.4 billion from HUD’s 2018 budget. Those cuts would eliminate 250,000 rental-assistance vouchers from the Section 8 housing program, according to Bloomberg. The cuts mean that the local housing officials who distribute the vouchers will need to reduce, or in some cases remove, their assistance.

Some of those cuts will be cushioned by regular turnover, since some voucher recipients move out of the program every year, for one reason or another. But the level of proposed cuts means many local housing authorities will have to reduce how much assistance they supply to voucher holders—or, in some cases, take it away entirely. According to data from the National Low-Income Housing Coalition, the US economy is already short 7 million affordable homes. A policy change like this one would likely cause that number to rise.