The economic drivers of homelessness

By Brenda Wintrode

Published July 13, 2020

The lower echelons of America’s middle class have been slipping through the country’s economic cracks as decades of federal policy changes have shredded the social safety nets that used to catch them.

Over the past 30 years, the rich have gotten richer. The top 1% now hold nearly one-third of the nation’s wealth, a 34% increase since 1990. 

Here’s what that looks like:

  • 38.1 million people, or 11.8% percent of Americans, are living in poverty, according to 2018 U.S. Census data.

  • Median home prices have increased 154% in the past 30 years.

  • Homelessness rates rise sharply once median rental costs exceed 32% of median income, a recent Zillow study found. In San Francisco, which has one of the nation’s highest homelessness rates, median rental costs are 60% of median income, one of the highest rates in the nation. In contrast, the Huntsville, Alabama, region pays the nation’s lowest rent as a percentage of median income, 18%, and has a homelessness rate of less than half of the national average.

  • Fifty-six percent of American renters making between $30,000 and $44,999 a year are spending more than 30% of their income toward housing. Financial experts have long recommended that people don’t spend more than one-third of their income on housing.

  • On July 1, Washington, D.C.’s minimum wage rose to $15 an hour, one of the highest in the country. But even those earning the new hourly wage would need to work 146 hours a week to afford the city’s average rent of $2,200 per month.

  • “Only 36 affordable and available rental homes exist for every 100 extremely low-income renter households,” according to the National Low Income Housing Coalition. Extremely low-income households make 30% or less of area median income.

  • Americans face the highest risk of homelessness when they are less than 1 year old.

  • In 1990, one in 14 Americans surveyed reported experiencing homelessness during their lifetime.