I have good news and bad news. The good news is that homelessness has been steadily declining in America since 2007. The bad news is that the number of people most likely to become homelessness has been steadily rising—and it doesn’t show signs of stopping any time soon.
There are a lot of reasons for the increase in the number of vulnerable people. Some of these include low minimum wages and a lack of affordable housing in major cities and for low-income renters. Unfortunately, a new report from Harvard’s Joint Center for Housing Studies and Enterprise Community partners shows that this trend is unlikely to reverse in the next decade.
The report, "Projecting Trends in Severely Cost-Burdened Renters: 2015–2025," examines the number of households who are severely cost-burdened renters (i.e., spending more than 50 percent of their income on rent). Using 2015 as a baseline, researchers projected the number of severely cost-burdened households (SCBHs) likely to live in America in 2025. Currently, there are 11.8 million SCBHs.
They looked at several different scenarios—ranging from very optimistic to the worst-case scenario—to determine how the number of severely cost-burdened households might be impacts by inflation in rents and/or incomes.
These projections are bleak. Here’s what they say:
- If income growth and rent growth both continue at 2 percent (or today’s baseline scenario), the number of SCBHs will increase by 11 percent (1.3 million) by 2025.
- If rent growth outpaces income growth, the number of SCBHs will increase by between 14 percent (1.7 million) and 25 percent (3 million) by 2025.
- If income growth outpaces rent growth, the number of SCBHs could increase by as much as 8 percent (900,000) or decrease by 1 percent (200,000).
In other words, only in the least likely scenario—that in which income growth greatly outpaces rent growth—would the number of SCBHs decrease (and only by 200,000 households) by 2025. In all other scenarios, we’re going to have an increase in households paying more than half of their incomes in rent.
To stop the rise of SCBHs, we need more affordable housing and we need it now. Currently, there are approximately 4 million fewer units of affordable housing than there are low-income households who are eligible for them. In nearly all of the scenarios projected by this report, this crisis will continue to worsen in the coming years. Without it, millions of households are vulnerable to homelessness, and millions more may be in the future.
Graphic from "Projecting Trends in Severely Cost-Burdened Renters: 2015–2025" by Harvard University's Joint Center for Housing Studies.