There were 653,000 homeless living on the streets and under overpasses in America, according to the Jab. 31, 2023, U.S. Housing and Urban Development Annual Assessment. That works out to be 20 homeless per 10,000 residents. It’s the biggest increase since 2007. The increases were found across all population groups.

Washington state had the sixth highest homeless rate in 2023, with an estimated 28,036 homeless residents, about 14,000 of them residing in the Seattle-King County area. Half that number live outdoors. The rest are temporarily housed. The five states that have higher rates of homelessness in order of rate are New York #1, Vermont #2, Oregon #3, California #4, and Hawaii #5, according to Axios.

The states with the lowest homeless rates were found in states south of New York, the deep South except Georgia and Florida, and in Wyoming and Kansas.

Three reasons given in the H.U.D. assessment for the increase in homelessness: Disruptions brought about by the COVID-19 pandemic, the opioid epidemic, and the housing crisis. The fourth unstated reason for increasing homelessness lies with the fact that the national and state governments closed the doors on the mentally ill decades ago, forcing them into the streets. This fourth reason will be discussed in next week’s column.

In this column we’re going to examine reasons for the third cause of homelessness: The housing crisis.

According to an article in “The Week”, the cause goes back to the 2008-2009 Great Recession: Today, the United States lacks between 2 to 7 million new homes. “To fill that gap and to keep up population growth, at least 1.5 million homes would have to be built every year, a benchmark the country hasn’t hit since 2008.”

“Rent has also become more expensive, climbing nearly 30 percent since the start of the pandemic to a nationwide average of $1,959 a month.The fast-rising cost of housing in part explains the U.S.’s surging homeless population which climbed 12 percent in 2023….”

As home prices fell, so did the incentive to build new homes — there are fewer single-family homes that were built in the 2010s as a result of the Great Recession of 2008-2009. Many homeowners saw their housing values submerging “underwater”— worth less than the loans on them.

During the “The Great Recession” the Fed dropped interest rates to near-zero. Plus, the COVID pandemic created supply-chain bottlenecks. Working-from-home created an exodus to the suburbs from big cities.

When the Federal Reserve raised interest rates to 8% to cut the rate of inflation during 2022-23, many homeowners decided to keep their homes rather than sell because the lower loan rates were no longer available. Adding to this home squeeze, a quarter of the homes purchased in the U.S. were made by institutional investors. Average people couldn’t compete with billionaires. These actions drove up the price of housing.

Big cities saw the surge in housing prices because contractors weren’t incentivized in these areas and therefore didn’t build enough homes.

This same period saw the rise of extreme political polarization and the overturning of Roe v. Wade. Many fled the coastal cities to smaller inland communities in conservative states like Idaho and Montana. Since there were fewer building regulations there it was cheaper to build. Besides, people who live there generally tend to hold to more conservative views. Others fled red states to blue states, desiring bodily freedom which was now lacking in red states.

These incentives to move just increased the prices for houses in those areas. Bigger populations caused the domino effect with the need to to build more schools, water and waste treatment plants, and hospitals, raising additional costs.

Ironically, there are few homeless in the deep South in states like Mississippi, because housing is more affordable. Los Angeles has six times as many homeless people per capita than Jackson at least in part because the average rent in LA is $2,750, compared to Mississippi’s $900.

Events rarely occur for just one reason. There are usually multiple factors for any crisis. Often those crises build over decades, unnoticed and unobserved by average people. All of a sudden, the “new crisis”, in this case homelessness, breaks upon the scene and into the media without warning. People become angry and polarized, looking for someone to blame. Politicians use these emerging events to criticize their opponents and to gain power. The cycle repeats itself over and over again. It often takes decades and billions of dollars to solve the problem.

Next week we’ll examine the part that governmental policies have played in the homeless crisis.