The rule of thumb for personal housing costs is that they should be no more than 30 percent of your income. Compare the average per-capita income in a given region with the average per-capita housing cost. The more it exceeds 30 percent, the more homeless people you will have.
In Salem, Massachusetts, one-bedroom apartments typically cost $1,400 a month. For that to be 30 percent of your income, you need to earn $56,000 a year. According to the U.S. Census of 2013, the average per-capita income of a Massachusetts resident is $35,763. So the average person in that state cannot afford a one-bedroom apartment.
A steady, incremental rise in housing costs might not be immediately noticeable. While not optimal, 35 percent is still affordable. Forty percent is a bite, but still achievable. At 50 percent, you start looking for a roommate as a matter of necessity. Eighty percent and the two of you start discussing the need for a third. For some there’s their parents’ basement. Temporarily staying with in-laws. Couch surfing. An additional part time job. People find ways, but the entire system becomes stressed and people find themselves in increasingly insecure positions competing for a dwindling supply of housing.
Imagine a spectrum of income with a confrontational, alcoholic schizophrenic addicted to heroin, with absolutely no prospects at one end, a billionaire at the other, and all sorts in between. Now, imagine them all competing for a limited amount of housing. Even if you medicated and counseled the schizophrenic, got him to sober up and quit heroin, all you have done is made him better able to compete for a strictly-limited amount of housing. What about the single mother with two kids who was evicted to free up the apartment for your man? What about the five other people who applied for it?
I know a disabled homeless man who collects $800 a month from SSDI. Thirty percent of that is $240. If you can find one, the cheapest, bed-bug infested studio in my area runs about $850 a month. If he could find two roommates he could probably afford it, but every landlord is strict about extra occupants. They might let a girlfriend slide, but not two other men who aren’t on the lease.
As housing prices inch up, the poorest with the worst complications are the first to become homeless. The physically and mentally ill, drug addicts, failed criminals, unwashed, uneducated, stupid, socially inept, gamblers, drunks ... the most stigmatized elements of society are forced to walk around in public because they can’t afford someplace to go, and they become the face of the problem. Then people mistakenly assume that they ARE the problem, and if they can help them with their personal failings, they will solve the problem.
But the problem is a lack of affordable housing.
And the solution is obvious: Build more housing. Determine the best sites in a region. Identify any legislation that might hamper development and abolish it, regardless of the toes that steps on. Begin building studios and 1-4 bedroom apartments, and put them on the market as rent-to-own. Do this at breakneck speed until the local average per-capita housing costs are 30 percent of the local average per-capita income, and 85 percent of your homeless problem will go away.
Divorced fathers working overtime and living in shelters because they’re in arrears for child support would be able to afford a studio. Single mothers working full-time would be able to rent a one bedroom. College students could share studios. K-12 students would have somewhere to do their homework. Disabled people could move into studios. Retirees wouldn’t have to bunk down with 40 other people every night. The chronically mentally ill wouldn’t have to sleep in the weeds.
Bringing average per-capita housing costs down to 30 percent of the average per-capita income will mean that in some areas we’re going to have to double or even triple the available housing stock. That’s a lot of new construction jobs for people in the region. They’ll be spending that money in the community. That means new businesses employing new people. Think of what the economy is going to look like if the average resident has an extra five or six hundred to throw around every month.
You would still be left with a residue of homelessness. Affordable housing will get rid of most of it, but there will always be people whose problems overwhelm their ability to maintain a household. For them, and for the community paying for all of it, a Housing First approach is the most effective in both results and costs. No matter what the person’s problems are, you get them into some form of personal housing.
So who is going to pay for all of this? Doubling the housing stock will undoubtedly yield enormous economic benefits down the road, but the upfront money required is astronomical. Why not get it from the people who took it? Identify those people who have benefited the most from the housing crisis and tax the hell out of them. They might complain that there’s nothing illegal about the way they took our money, but there’s nothing illegal about taxes, either.
They’ll fight it tooth and nail, especially since an increase in available housing means that their property’s value goes down but the loan amount remains the same. With each new home on the market, a bit of their equity disappears. In a few years time, they’ll be screaming murder. Little things like streamlining applications for developers will morph into huge local battles.
A pity it will never happen. The system is designed to transfer wealth from the people who don’t own property into the pockets of the people who do, and they will fight change every step of the way. Some homelessness is inevitable, but the level we currently face is a symptom of an unjust economy.