The ‘Troubling’ Economic Trend And Its Effect On Homelessness

When conducting my research for my previous article, I noticed a correlation between the homelessness issue and the economy. Therefore, in this article, I would like to focus on the current economic trends, especially those in the housing market, and their effect on homelessness rates in the United States. 

As an issue itself, homelessness has been analyzed and studied for decades to find its end. The topic has been closely studied alongside other trends such as mental health, substance abuse, and, most notably, poverty. However, recent studies have shifted their focus onto more prominent exogenous factors, such as the economy and the distribution of resources.

Homelessness is often defined from a more social standpoint and as a social issue rather than from the lens of deprivation of resources. A Deloitte article titled “The homelessness paradox” compares the homelessness rates between several countries with the biggest economies. In its findings, the article shows how each country primarily has a similar problem: the cost of housing compared to its respective income level. 

As the cost of properties rises, rent also follows, significantly affecting those living in larger cities. The recent housing market cites a median sale price for a house in the U.S. at approximately 300,000 dollars. As for renters, monthly rent is an estimated $1,100, which is 53 percent of monthly income for lower-income populations. The same Deloitte article calls these numbers “troubling,” considering the considerable portion of people who are more likely to rent than buy a home. 

Because of the alarming ratio of housing costs to income, there is now an increased emphasis on ‘housing first’ initiatives. The initiative asks the government to provide housing first, then solve the other factors leading to homelessness. By following initiatives such as “housing first,” economies, especially in the developed world, can provide short-term, immediate solutions while conducting further analyses to find permanent resolutions to homelessness.

Although not one person holds the key to the economy, it is essential to recognize its direct effects on complex social issues, such as homelessness. Activists, government officials, and others fighting to eradicate homelessness must also consider external factors such as housing costs in their course towards solutions. 


Tanner, M. (2018). The Inclusive Economy : How to Bring Wealth to America’s Poor. Cato Institute.

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