Charter Schools, Alternative Programs, Supplemental
Educational Services, and McKinney-Vento Homeless

Two trends are largely responsible for the rise in homelessness over the past 15-20 years: a growing shortage of affordable rental housing and a simultaneous increase in poverty. Below is an overview of current poverty and housing statistics, as well as additional factors contributing to homelessness. A list of resources for further study is also provided.

POVERTY

Homelessness and poverty are inextricably linked. Poor people are frequently unable to pay for housing, food, child care, health care, and education. Difficult choices must be made when limited resources cover only some of these necessities. Often it is housing, which absorbs a high proportion of income, that must be dropped. Being poor means being an illness, an accident, or a paycheck away from living on the streets.

In 1997, 13.3% of the U.S. population, or 35.6 million people, lived in poverty (U.S. Bureau of the Census, 1998a). While the number of poor people remains has not changed much in recent years, the number of people living in extreme poverty has increased. In 1997, 14.6 million people -- 41% of all poor persons -- had incomes of less than half the poverty level. This represents an increase of over 500,000 from 1995. Forty percent of persons living in poverty are children; in fact, the 1997 poverty rate of 19.9% for children is almost twice as high as the poverty rate for any other age group.

Two factors help account for increasing poverty: eroding employment opportunities for large segments of the workforce, and the declining value and availability of public assistance.

Eroding Work Opportunities

Media reports of a growing economy and low unemployment mask a number of important reasons why homelessness persists, and, in some areas of the country, is worsening. These reasons include stagnant or falling incomes and less secure jobs which offer fewer benefits.
While the last few years have seen growth in real wages at all levels, these increases have not been enough to counteract a long pattern of stagnant and declining wages. Low-wage workers have been particularly hard hit by wage trends. Despite recent increases in the minimum wage, the real value of the minimum wage in 1997 was 18.1% less than in 1979 (Mishel, Bernstein, and Schmitt, 1999). Factors contributing to wage declines include a steep drop in the number and bargaining power of unionized workers; erosion in the value of the minimum wage; a decline in manufacturing jobs and the corresponding expansion of lower-paying service-sector employment; globalization; and increased nonstandard work, such as temporary and part-time employment (Mishel, Bernstein, and Schmitt, 1999).

Declining wages, in turn, have put housing out of reach for many workers: in every state, more than the minimum wage is required to afford a one- or two-bedroom apartment at Fair Market Rent (National Low Income Housing Coalition, 1998).1 In fact, in the median state a minimum-wage worker would have to work 87 hours each week to afford a two-bedroom apartment at 30% of his or her income, which is the federal definition of affordable housing. In addition, 40% of households with "worst case housing needs" -- households paying over half their incomes for rent, living in severely substandard housing, or both -- have at least one working person. This represents a 32% increase in working households with worst case housing needs from 1993 to 1995 (U.S. Housing and Urban Development, 1998).

The connection between impoverished workers and homelessness can be seen in homeless shelters, many of which house significant numbers of full-time wage earners. A survey of 30 U.S. cities found that almost one in five homeless persons is employed (U.S. Conference of Mayors, 1998). In a number of cities not surveyed by the U.S. Conference of Mayors - as well as in many states - the percentage is even higher (National Coalition for the Homeless, 1997).
The future of job growth does not appear promising for many workers: a 1998 study estimated that 46% of the jobs with the most growth between 1994 and 2005 pay less than $16,000 a year; these jobs will not lift families out of poverty (National Priorities Project, 1998).2 Moreover, 74% of these jobs pay below a livable wage ($32,185 for a family of four).
Thus, for many Americans, work provides no escape from poverty. The benefits of economic growth have not been equally distributed; instead, they have been concentrated at the top of income and wealth distributions. A rising tide does not lift all boats, and in the United States today, many boats are struggling to stay afloat.

Decline in Public Assistance

The declining value and availability of public assistance is another source of increasing poverty and homelessness. Until its repeal in August 1996, the largest cash assistance program for poor families with children was the Aid to Families with Dependent Children (AFDC) program. Between 1970 and 1994, the typical state's AFDC benefits for a family of three fell 47%, after adjusting for inflation (Greenberg and Baumohl, 1996). The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (the federal welfare reform law) repealed the AFDC program and replaced it with a block grant program called Temporary Assistance to Needy Families (TANF). Current TANF benefits and Food Stamps combined are below the poverty level in every state; in fact, the median TANF benefit for a family of three is approximately one-third of the poverty level. Thus, contrary to popular opinion, welfare does not provide relief from poverty.

Welfare caseloads have dropped sharply since the passage and implementation of welfare reform legislation. However, declining welfare rolls simply mean that fewer people are receiving benefits -- not that they are employed or doing better financially. Early findings suggest that although more families are moving from welfare to work, many of them are faring poorly due to low wages and inadequate work supports. Only a small fraction of welfare recipients' new jobs pay above-poverty wages; most of the new jobs pay far below the poverty line (Children's Defense Fund and the National Coalition for the Homeless, 1998). Moreover, extreme poverty is growing more common for children, especially those in female-headed and working families. This increase can be traced directly to the declining number of children lifted above one-half of the poverty line by government cash assistance for the poor.

As a result of loss of benefits, low wages, and unstable employment, many families leaving welfare struggle to get medical care, food, and housing. Many lose health insurance, despite continued Medicaid eligibility: a recent study found that 675,000 people lost health insurance in 1997 as a result of the federal welfare reform legislation, including 400,000 children (Families USA, 1999). In addition, housing is rarely affordable for families leaving welfare for low wages, yet subsidized housing is so limited that fewer than one in four TANF families nationwide lives in public housing or receives a housing voucher to help them rent a private unit. For most families leaving the rolls, housing subsidies are not an option. In some communities, former welfare families appear to be experiencing homelessness in increasing numbers (Children's Defense Fund and the National Coalition for the Homeless, 1998).
In addition to the reduction in the value and availability of welfare benefits for families, recent policy changes have reduced or eliminated public assistance for poor single individuals. Several states have cut or eliminated General Assistance (GA) benefits for single impoverished people, despite evidence that the availability of GA reduces the prevalence of homelessness (Greenberg and Baumohl, 1996).

Disabled people, too, must struggle to obtain and maintain stable housing. In 1998, on a national average, a person receiving Suplemental Security Income (SSI) benefits had to spend 69% of his or her SSI monthly income to rent a one-bedroom apartment at Fair Market Rent; in more than 125 housing market areas, the cost of a one-bedroom apartment at Fair Market Rent was more than a person's total monthly SSI income (Technical Assistance Collaborative & the Consortium for Citizens with Disabilities Housing Task Force, 1999).

Thus, most states have not replaced the old welfare system with an alternative that enables families and individuals to obtain above-poverty employment and to sustain themselves when work is not available or possible.

HOUSING

A lack of affordable housing and the limited scale of housing assistance programs have contributed to the current housing crisis and to homelessness.

The gap between the number of affordable housing units and the number of people needing them has created a housing crisis for poor people. Between 1973 and 1993, 2.2 million low-rent units disappeared from the market. These units were either abandoned, converted into condominiums or expensive apartments, or became unaffordable because of cost increases. Between 1991 and 1995, median rental costs paid by low-income renters rose 21%; at the same time, the number of low-income renters increased. Over these years, despite an improving economy, the affordable housing gap grew by one million (Daskal, 1998). By 1995, the number of low-income renters in America outstripped the number of low-cost rental units by 5.4 million rental units - the largest shortfall on record (Daskal, 1998). More recently, the strong economy has caused rents to soar, putting housing out of reach for the poorest Americans. Between 1995 and 1997, rents increased faster than income for the 20% of American households with the lowest incomes (U.S. Department of Housing and Urban Development, 1999). This same study found that the number of housing units that rent for less than $300, adjusted for inflation, declined from 6.8 million in 1996 to 5.5 million in 1998, a 19 percent drop of 1.3 million units. The loss of affordable housing puts even greater numbers of people at risk of homelessness.

The lack of affordable housing has lead to high rent burdens (rents which absorb a high proportion of income), overcrowding, and substandard housing. These phenomena, in turn, have not only forced many people to become homeless; they have put a large and growing number of people at risk of becoming homeless. A recent Housing and Urban Development (HUD) study found that 5.3 million unassisted, very low-income households had "worst case needs" for housing assistance in 1995 (U.S. Department of Housing and Urban Development, 1998).3 This figure is an all-time high and represents an 8% increase over the 1989 figure.
Housing assistance can make the difference between stable housing, precarious housing, or no housing at all. However, the demand for assisted housing clearly exceeds the supply: only about one-third of poor renter households receive a housing subsidy from the federal, state, or a local government (Daskal, 1998). The limited level of housing assistance means that most poor families and individuals seeking housing assistance are placed on long waiting lists. From 1996-1998, the time households spent on waiting lists for HUD housing assistance grew dramatically. For the largest public housing authorities, a family's average time on a waiting list rose from 22 to 33 months from 1996 to 1998 - a 50% increase (U.S. Department of Housing and Urban Development, 1999). The average waiting period for a Section 8 rental assistance voucher rose from 26 months to 28 months between 1996 and 1998.4 Excessive waiting lists for public housing mean that people must remain in shelters or inadequate housing arrangements longer. Consequently, there is less shelter space available for other homeless people, who must find shelter elsewhere or live on the streets.

A housing trend with a particularly severe impact on homelessness is the loss of single room occupancy (SRO) housing. In the past, SRO housing served to house many poor individuals, including poor persons suffering from mental illness or substance abuse. From 1970 to the mid-1980s, an estimated one million SRO units were demolished (Dolbeare, 1996). The demolition of SRO housing was most notable in large cities: between 1970-1982, New York City lost 87% of its $200 per month or less SRO stock; Chicago experienced the total elimination of cubicle hotels; and by 1985, Los Angeles had lost more than half of its downtown SRO housing (Koegel, et al, 1996). From 1975 to 1988, San Francisco lost 43% of its stock of low-cost residential hotels; from 1970 to 1986, Portland, Oregon lost 59% of its residential hotels; and from 1971 to 1981, Denver lost 64% of its SRO hotels (Wright and Rubin, 1997). Thus the destruction of SRO housing is a major factor in the growth of homelessness in many cities.

Finally, it should be noted that the largest federal housing assistance program is the entitlement to deduct mortgage interest from income for tax purposes. In fact, for every one dollar spent on low income housing programs, the federal treasury loses four dollars to housing-related tax expenditures, 75% of which benefit households in the top fifth of income distribution (Dolbeare, 1996). Moreover, in 1994 the top fifth of households received 61% of all federal housing benefits (tax and direct), while the bottom fifth received only 18%. Thus, federal housing policy has thus not responded to the needs of low-income households, while disproportionately benefitting the wealthiest Americans.

OTHER FACTORS

Particularly within the context of poverty and the lack of afforable housing, certain additional factors may push people into homelessness. Other major factors which can contribute to homelessness include the following:

Lack of Affordable Health Care: For families and individuals struggling to pay the rent, a serious illness or disability can start a downward spiral into homelessness, beginning with a lost job, depletion of savings to pay for care, and eventual eviction. In 1997, approximately 43.4 million Americans had no health care insurance (U.S. Bureau of the Census, 1998b). More than a third of persons living in poverty had no health insurance of any kind. The coverage held by many others would not carry them through a catastrophic illness.

Domestic Violence: Battered women who live in poverty are often forced to choose between abusive relationships and homelessness. In a study of 777 homeless parents (the majority of whom were mothers) in ten U.S. cities, 22% said they had left their last place of residence because of domestic violence (Homes for the Homeless, 1998). In additions, 46% of cities surveyed by the U.S. Conference of Mayors identified domestic violence as a primary cause of homelessness (U.S. Conference of Mayors, 1998).

Mental Illness: Approximately 20-25% of the single adult homeless population suffer from some form of severe and persistent mental illness (Koegel et al, 1996). Despite the disproportionate number of severely mentally ill people among the homeless population, increases in homelessness are not attributable to the release of severely mentally ill people from institutions. Most patients were released from mental hospitals in the 1950s and 1960s, yet vast increases in homelessness did not occur until the 1980s, when incomes and housing options for those living on the margins began to diminish rapidly. According to the Federal Task Force on Homelessness and Severe Mental Illness, only 5-7% of homeless persons with mental illness need to be institutionalized; most can live in the community with the appropriate supportive housing options (Federal Task Force on Homelessness and Severe Mental Illness, 1992). However, many mentally ill homeless people are unable to obtain access to supportive housing and/or other treatment services. The mental health support services most needed include case management, housing, and treatment.

Addiction Disorders: The relationship between addiction and homelessness is complex and controversial. While rates of alcohol and drug abuse are disproportionately high among the homeless population, the increase in homelessness over the past two decades cannot be explained by addiction alone. Many people who are addicted to alcohol and drugs never become homeless, but people who are poor and addicted are clearly at increased risk of homelessness. During the 1980s, competition for increasingly scarce low-income housing grew so intense that those with disabilities such as addiction and mental illness were more likely to lose out and find themselves on the streets. The loss of SRO housing, a source of stability for many poor people suffering from addiction and/or mental illness, was a major factor in increased homelessness in many communities.

Addiction does increase the risk of displacement for the precariously housed; in the absence of appropriate treatment, it may doom one's chances of getting housing once on the streets. Homeless people often face insurmountable barriers to obtaining health care, including addictive disorder treatment services and recovery supports. The following are among the obstacles to treatment for homeless persons: lack of health insurance; lack of documentation; waiting lists; scheduling difficulties; daily contact requirements; lack of transportation; ineffective treatment methods; lack of supportive services; and cultural insensitivity. An in-depth study of 13 communities across the nation revealed service gaps in every community in at least one stage of the treatment and recovery continuum for homeless people (National Coalition for the Homeless, 1998).

Even when disabling conditions such as addiction or mental illness are treated, homeless addicts and mentally ill people must compete with all other poor people for a dwindling supply of low-income housing. Homelessness can thus be seen as a perverse game of musical chairs, in which the loss of "chairs" (low cost housing) forces some people to be left standing (homeless). Those who are least able to secure a chair -- the most disabled and therefore the most vulnerable -- are more likely to be left without a place to sit.

CONCLUSION

Homelessness results from a complex set of circumstances which require people to choose between food, shelter, and other basic needs. Only a concerted effort to ensure jobs that pay a living wage, adequate support for those who cannot work, affordable housing, and access to health care will bring an end to homelessness.

FOOTNOTES

1. FMRs are the monthly amounts "needed to rent privately owned, decent, safe, and sanitary rental housing of a modest (nonluxury) nature with suitable amenities." Federal Register. HUD determines FMRs for localities in all 50 states. [Back].

2.The poverty line for a family of three is $12,750; for a family of four, the poverty line is $16,813. See http://www.census.gov/hhes/ww w/poverty.html for details.[Back].

3."Worst case needs" refers to those renters with incomes below 50% of the area median income who are involuntarily displaced, pay more than half of their income for rent and utilities, or live in substandard housing. [Back].

4.The Section 8 Program is a federal housing assistance program that provides housing subsidies for families and individuals to live in existing rental housing or in designated housing projects. [Back].

REFERENCES

Children's Defense Fund and National Coalition for the Homeless. Welfare to What: Early Findings on Family Hardship and Well-being, 1998. Available for $11.50 from the National Coalition for the Homeless, 1012 14th Street, NW, Suite 600, Washington, DC 20005; 202/737-6444.

Daskal, Jennifer. In Search of Shelter: The Growing Shortage of Affordable Rental Housing, 1998. Available from the Center on Budget and Policy Priorities, 820 First Street, NE, Suite 510, Washington, DC 20002; 202/408-1080, center@center.cbpp.org.

Dolbeare, Cushing. "Housing Policy: A General Consideration," in Homelessness in America, 1996, Oryx Press. Available for $43.50 from the National Coalition for the Homeless, 1012 14th Street, NW, Suite 600, Washington, DC 20005; 202/737-6444.

Families USA. Losing Health Insurance: The Unintended Consequences of Welfare Reform, 1999. Available from Families USA, 1334 G Street, NW, Washington, DC 20005; 202/628-3030.

Federal Task Force on Homelessness and Severe Mental Illness. Outcasts on Main Street: A Report of the Federal Task Force on Homelessness and Severe Mental Illness, 1992. Available, free, from the National Resource Center on Homelessness and Mental Illness, 262 Delaware Ave., Delmar, NY 12054-1123; 800/444-7415, nrc@prainc.com.

Greenberg, Mark, and Jim Baumohl. "Income Maintenance: Little Help Now, Less on the Way," in Homelessness in America, 1996, Oryx Press. Available for $43.50 from the National Coalition for the Homeless, 1012 14th Street, NW, Suite 600, Washington, DC 20005; 202/737-6444.

Homes for the Homeless. Ten Cities 1997-1998: A Snapshot of Family Homelessness Across America. Available from Homes for the Homeless & the Institute for Children and Poverty, 36 Cooper Square, 6th Floor, New York, NY 10003; 212/529-5252.

Koegel, Paul, et al. "The Causes of Homelessness," in Homelessness in America, 1996, Oryx Press. Available for $43.50 from the National Coalition for the Homeless,1012 14th Street, NW, Suite 600, Washington, DC 20005; 202/737-6444.

Mishel, L., Bernstein, J., and Schmitt, J. The State of Working America: 1998-99, 1999. Available for $24.95 (paper) from the Economic Policy Institute, 1660 L Street, NW, Suite 1200, Washington, DC 20036; 202/331-5510.

National Coalition for the Homeless. Homelessness in America: Unabated and Increasing, 1997. Available for $6.25 from the National Coalition for the Homeless, 1012 14th Street, NW, Suite 600, Washington, DC 20005; 202/737-6444.

National Coalition for the Homeless. No Open Door: Breaking the Lock on Addiction Recovery for Homeless People, 1998. Available for $11.50 from the National Coalition for the Homeless, 1012 14th Street, NW, Suite 600, Washington, DC 20005; 202/737-6444.

National Low Income Housing Coalition. Out of Reach: Rental Housing at What Cost?, 1998. Available from the National Low Income Housing Coalition at 1012 14th Street, Suite 610, Washington, DC 20005; 202/662-1530.

National Priorities Project and Jobs with Justice. Working Hard, Earning Less: The Future of Job Growth in America, 1998. Available from the National Priorities Project, 17 New South Street, Suite 301, Northampton, MA 01060; 414/584-9556.

Technical Assistance Collaborative, Inc. and the Consortium for Citizens with Disabilities Housing Task Force. Priced Out in 1998: The Housing Crisis for People with Disabilities, 1999. Available from the Technical Assistance Collaborative, One Center Plaza, Suite 310, Boston, MA 02108; 617/742-5657.

U.S. Bureau of the Census(a). Poverty in the United States: 1997. Current Population Reports, Series P60-201, 1998. Available, free, from U.S. Bureau of the Census, Income Statistics Branch, Washington, DC, 20233-0001; 301/763-8576, or at http://www.census.gov/hhes/ww w/poverty.html.

U.S. Bureau of the Census(b). Health Insurance Coverage: 1997. Current Population Reports, Series P60-202, 1997. Available, free, from U.S. Bureau of the Census, Income Statistics Branch, Washington,DC, 20233-0001; 301/763-8576, or at http://www.census.gov/hhes/ww w/hlthins.html.

U.S. Conference of Mayors. A Status Report on Hunger and Homelessness in America's Cities: 1998. Available for $15.00 from the U.S. Conference of Mayors, 1620 Eye St., NW, 4th Floor, Washington, DC, 20006-4005, 202/293-7330.

U.S. Department of Housing and Urban Development, Office of Policy Development and Research. Rental Housing Assistance -- The Crisis Continues: 1997 Report to Congress on Worst Case Housing Needs, 1998. Available for $5.00 from HUD User, P.O. Box 6091, Rockville, MD, 20850, 800/245-2691.

U.S. Department of Housing and Urban Development, Office of Policy Development and Research. Waiting In Vain: An Update On America's Housing Crisis, 1999. Available for $5.00 from HUD User, P.O. Box 6091, Rockville, MD 20849-6091, 800/245-2691, or free from the HUD User web site at www.huduser.org

Wright, James and Beth Rubin. "Is Homelessness a Housing Problem?" in Understanding Homelessness: New Policy and Research Perspectives, 1997. Available, free, from the Fannie Mae Foundation, 4000 Wisconsin Avenue, NW, North Tower, Suite One, Washington, DC 20016-2804; 202-274-8074 or email: fmfpubs@fanniemaefoundation.org.

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