Report Examines Relationship Between Rent Affordability and Homelessness

A recent report from Zillow Research titled, “Homelessness Rises More Quickly Where Rent Exceeds a Third of Income,” looked at the relationship between rent affordability and homelessness. The report found that communities where the median rent is more than 32 percent of the median household income are likely to have sharply higher rates of homelessness.

The research also estimates that the scale of homelessness nationwide has been undercounted by roughly 115,000 people, or 20 percent. HUD estimates that 546,566 people experienced homelessness in 2017, based on counts collected at local levels and reported nationally. But prior research shows those counts to be imprecise and, in all likelihood, far too low. This analysis estimates that far more people (660,996) likely experienced homelessness in 2017.

Rising rents have long been associated with climbing rates of homelessness. Zillow looked at rent affordability, homelessness, and poverty across 386 communities. Rent affordability was defined as the ratio of a community’s median rent to its median income. A ratio of median rent to median income greater than 22 percent was correlated with higher homelessness rates, and a rent-to-income ratio above 32 percent was associated with even sharper increases in homelessness. This research demonstrates that the homeless population climbs faster when rent affordability, the share of income people spend on rent, crosses certain thresholds. The U.S. median rent has risen 11 percent over the past five years, requiring an American renter earning the national median income to spend 28.2 percent of their earnings on the typical U.S. rental.