Zillow, October 27, 2024 Income growth has not kept pace with rents, leading to an affordability crunch with cascading effects that, for people on the bottom economic rung, increases the risk of homelessness.

• Communities where people spend more than 32 percent of their income on rent can expect a more rapid increase in homelessness.
• Income growth has not kept pace with rents, leading to an affordability crunch with cascading effects that, for people on the bottom economic rung, increases the risk of homelessness.
• The areas that are most vulnerable to rising rents, unaffordability and poverty hold 15 percent of the U.S. population – and 47 percent of people experiencing homelessness.

Editor’s Note, Feb. 2021: “Inflection Points in Community-Level Homeless Rates,” the academic paper upon which this brief is based, will be published in an upcoming issue of the Annals of Applied Statistics. Communities where people spend more than 32 percent of their income on rent can expect a more rapid increase in homelessness, according to new Zillow-sponsored research on the size and root causes of the nation’s homelessness challenge. The research also estimates that the scale of homelessness nationwide has been undercounted by roughly 115,000 people, or 20 percent. The U.S. Department of Housing and Urban Development (HUD) estimates that 546,566 people experienced homelessness in 2017, based on counts collected at local levels and reported nationally.[i] But prior research shows those counts to be imprecise and, in all likelihood, far too low. An analysis by Zillow Principal Economist Chris Glynn, Thomas Byrne of Boston University and Dennis P. Culhane of the University of Pennsylvania estimates that far more people – 660,996 – likely experienced homelessness in 2017. Rising rents have long been associated with climbing rates of homelessness. This research demonstrates that the homeless population climbs faster when rent affordability – the share of income people spend on rent – crosses certain thresholds. In many areas beyond those thresholds, even modest rent increases can push thousands more Americans into homelessness.