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Causes of intercity variation in homelessness

1993; American Economic Association; Volume: 83; Issue: 1 Linguagem: Inglês

1944-7981

Randall K. Filer, Marjorie Honig,

Housing, Finance, and Neoliberalism

Homelessness in America has become a major policy concern in recent years. Following estimates by a number of researchers in the 1980's that suggested as many as a half-million homeless,1 the 1990 census places the current number at around a quarter of a million. Efforts to design policies to deal with this problem have been handicapped by a lack of systematic analysis of the causes of homelessness.2 Policymakers have had little guidance from researchers in determining the relative importance of such potential causes of homelessness as tight housing markets, slack labor markets, reductions in real publicassistance benefits, tightening of eligibility requirements for public assistance, and noninstitutionalization of the mentally ill. To assess the relative importance of these and other factors, we used estimates by the Department of Housing and Urban Development (HUD) of the homeless population in a cross-section of metropolitan areas in 1984. We do not attempt in this paper to develop a full structural model of homelessness. Rather, we present reduced-form findings as a first attempt to measure comprehensively and systematically the underlying causes of homelessness.3 We assume in this paper that homelessness results from an imbalance between the cost of available housing and a household's income. Such an imbalance may occur, for example, when housing markets are tight relative to labor markets and housing costs are therefore high relative to earnings (or to alternative resources, such as public assistance). Investigation of the causes of homelessness must go beyond housing markets alone, however, because of the special characteristics of the population at risk and the public policies that address their needs. Transfer payments and policies regarding institutionalization of the mentally ill, for example, should be important determinants of the incidence of homelessness but are not part of a standard housing model. Since homelessness represents the end of a spectrum of poor housing outcomes, we also estimate equations for two related conditions, crowded and doubled-up housing. These are often cited as causes of homelessness but are, in fact, different manifestations of the same underlying relationship between housing costs and household resources.4 * Department of Economics, Hunter College/ CUNY, 695 Park Avenue, New York, NY 10021. This research was supported by the Institute for Research on Poverty under the Small Grants Program and the University Committee on Research of the City University of New York. The authors thank Steve BartolomeiHill, Howard Chernick, Steven Craig, Martha Hill, Charles Manski, Kathryn Nelson, and Cordelia Reimers for helpful comments, and Franco Pignataro for his unusually meticulous programming assistance. 'See Filer and Honig (1990) for a detailed discussion of estimates of the size and growth of the homeless population. 2Most studies have focused on the size of the homeless population and its demographic characteristics. A few analyses have examined a limited range of potential causes of homelessness. F. Stevens Redburn and Terry F. Buss (1986) examined the roles of population growth, climate, and housing conditions; William Tucker (1987) and John M. Quigley (1990) focused on the role of rent control. Karin Ringheim (1990) analyzed in depth a small sample of metropolitan areas. 3We view this effort as preliminary to a more detailed analysis we intend to undertake when complete data from the 1990 Census, which enumerates the homeless population, become available. 4Most previous economic analyses of housing markets have not focused on the decision of whether to share housing. Demographers, on the other hand, have long studied this issue when examining family formation and living arrangements. Among economists, a notable exception is the study by Axel Borsch-Supan and John Pitkin (1988), who focused on the choice between renting, purchasing, and sharing housing. We are concerned in this paper with the other margin, where individuals and families chose between sharing housing and entering the homeless shelter system. Such