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It's not uncommon to hear people say that building market housing doesn't help those in housing need.
Only... they're wrong. Thread (h/t @hanlonbt) 1/9
https://urbanpolicy.berkeley.edu/pdf/QR_EJHP01PB.pdf
Only... they're wrong. Thread (h/t @hanlonbt) 1/9
https://urbanpolicy.berkeley.edu/pdf/QR_EJHP01PB.pdf
This paper on "the economics of homelessness" looks at the evidence from the USA. It tests the explanation that rising homelessness has been caused by societal factors such as mental illness & drug addiction. 2/9
Using "essentially all" the systematic information on homelessness, they find quite simply that the availability and pricing of housing, and the growth in demand for the lowest quality housing, explains a large part of the (substantial) differences across US cities. 3/9
And how do you measure the availability of housing? The vacancy rate. The more homes you have vacant - the more landlords have to drop the rents to attract tenants. This is why focusing on reducing empty homes is so misguided. A good housing market has some slack! 4/9
In fact - a 10% increase in vacancy rates is associated with a 6% decline in homelessness. England's rate is 2.6%, one of the lowest in Europe (average 15.8%). No wonder we have such problems with rental affordability and homelessness when we have such a supply shortage. 5/9
On the bright side, even relatively improvements in the availability or affordability of private rented housing through "modest" pro-supply policies can substantially reduce homelessness, accompanied with welfare support to help households for the time being. 6/9
You can see an example of how much better cities with liberal supply like Houston perform on homelessness than supply-restrictive places like San Francisco and New York. 7/9 https://twitter.com/markvalli/status/1336004936379711488?s=20
So when people say "this market housing won't help, it's too expensive"... they're wrong. They ignore that new builds reduce pressure on older housing, by attracting higher earners away from it. This reduces rents. This is the filtering effect and it is robustly evidenced. 8/9
Conversely, it's these anti-housing attitudes that make building homes harder, that drive vacancy rates down as people compete for fewer homes, that push up rental costs, and that result in more homelessness.
Ignore them. Refute them. Build more homes. 9/9
Ignore them. Refute them. Build more homes. 9/9
Other interesting tidbits: homeless people are characterised as having high levels of addiction/mental health issues. It may be true, but it is often overstated. This is because they're "point-prevalence" estimates of the population on one day... 1/3
... rather than "period-prevalence" estimates of the people who experience homelessness *over a certain period*. So it disproportionately reflects those experiencing longer spells of homelessness, and underrepresents the people experiencing shorter spells. 2/3
Another particularly sad, and perhaps not surprising, finding: a lot of the increase in prison populations in the USA can be explained by a decline in in-patients in psychiatric hospitals. 3/3
