Addressing the Coming Explosion of Homelessness
8/13/20
At times like this, I really appreciate the work of the Census Bureau. Without the data it collects, how could we possibly make intelligent policy decisions? I’m currently fixated on the Census’s latest Household Pulse Survey, pertaining to the week of July 16–21. According to this survey, nearly 13 percent of households with outstanding mortgages in the US were late on their latest month’s payment, and over 20 percent of renters missed their rent payment. The survey also measures the capacity to meet next month’s obligation. It allowed for the following responses: No, slight, moderate, and high confidence on meeting the next month’s obligation. For homeowners with outstanding mortgages, over 15 percent reported no or slight confidence to meet their obligation; for renters, more than 32 percent of the total reported no or slight confidence to pay. Critically, these results pertained to the time before the supplemental unemployment insurance had run out. Undoubtedly, these percentages will be rising from here, given the termination of these benefits.
The prospect of not being able to meet contractual obligations for housing must be terrifying for those in this situation, but the scale of the problem is staggering. At this point, it’s a virtual certainty that more than a third of all rental households find themselves in this situation! And what are these households expected to do? The handwriting is on the wall. With rental moratoria terminating and with a protracted inability to pay, households in arrears will be forced to vacate and seek housing elsewhere at some point, but where and how? At this juncture, In the best case, some homeowners would hope to extract some equity following foreclosure; but in all likelihood, most renters would have no comparable source of savings. In a significant portion of cases, affected households will be out on the street.
Those with some savings or the support of friends and family may be able to make alternative arrangements, but for those without these resources, prospects are more frightening. An eviction virtually makes those affected untouchables to prospective landlords. An explosion of homelessness may seem to be an abstraction now, but barring a federal response to this situation, you can count on it happening.
And then what? We’re looking at a serious erosion of the quality of life for all Americans, not just those directly affected by homelessness. We’re talking about living with visibly higher levels of poverty, more tent cities, more begging and panhandling, more crime out of desperation, higher levels of incarceration, and increased demand for social services at the state and local level. These are costs borne by all of us.
The reality is that all of these consequences can be avoided — with money. I’m talking about direct aid to households — as in Universal Basic Income. Money is the most efficient way to address this plague. It will allow those who can no longer afford their current accommodations to seek alternative, more affordable housing, and to do so while maintaining their dignity. The choice is quite clear: Either allocate resources to support this population now or end up seriously stressing our housing markets and having to deal with an expanded set of social and economic problems later.
The smart policy would be to take prophylactic measures now, before this crisis really gets out of hand and the harm for many becomes irreversible. Unfortunately, nothing of the sort seems likely with the current congress and administration. Prospects may brighten somewhat under a Biden/Harris administration. Pity we have to wait that long. The larger the population afflicted with homelessness — which is the likely consequence of a delayed response to this crisis — the more difficult will be our transition to an economic recovery.
