Cyclic Causes of the Homelessness Crisis

Correction: This story has been updated to include corrected point-in-time counts.

Housing, Health, and Economics Collide

Homelessness is increasingly described as having reached a State of Emergency. In the Pacific Northwest, Lane County, the City of Portland, Seattle, and King County, WA have declared an SOE for homelessness and housing. Elsewhere along the West Coast, Los Angeles, San Diego, San Jose, and Oakland, CA have all declared SOE’s as well. It is a complicated process to tease out the causation of our current predicament, but there is increasing consensus among experts that it is multifold.

In Oregon, the rate of homelessness is more than double the national average. It’s currently estimated that there are about 553,000 unhoused individuals throughout the country — that’s approximately 17 out of every 10,000 people. In Oregon, homelessness has reached 35 out of every 10,000 people.

In Benton County, there are 247  individuals experiencing homelessness according to the 2018 point in time (PIT) count from Oregon Housing and Community Services. According to a 2017 white paper from the Corvallis League of Women Voters,  “Homelessness in Corvallis“, homeless individuals in the Benton County area could be closer to 855- 1257.

It is not any one thing alone that has caused all of this. It has been a number of events, policies, and mistakes that have led us to this breaking point.

Waning Wages
Anyone can find themselves homeless when they can’t afford a home. Workers have experienced a 67 percent increase in wages since 1970, according to the Economic Policy Institute. This sounds pretty good, until you hear the consumer price index increased 8 times that amount over the same period.

According to the Pew Foundation, the cost of attending a public college has increased by 571 percent since the late 1980’s. Rent has increased by 750 percent, and the cost of purchasing a home has gone up by a whopping 905 percent since the 1960’s.

From 1979 to 2013, those earning wages in the top 1 percent saw an increase of 138 percent, while those earning wages at the bottom 90 percent saw an increase of only 15 percent. CEOs today bring home 296 times what the average working person does.

The federal minimum wage is currently $7.25, while the state minimum wage in Oregon is $11.25. That may seem like a comparatively adequate wage, but according to the National Low Income Housing Coalition, it wouldn’t pay for half of the rent for a two bedroom apartment, even if you worked one and a half jobs — given other expenses like food, transportation, clothing, and such.

The NLIHC released a study this year that found our current way of calculating the lowest amount a worker can make in order to afford basic needs falls incredibly short, and proposes to adopt a “national housing wage” in its place — one that would couple the lowest amount a worker can earn to the current cost of housing. In June of 2019, the national housing wage was found to be $22.96 per hour in order to rent a two bedroom home.

Even when working two jobs, a person can become homeless. The director of the National Coalition for the Homeless, Megan Hustings, told Axios that between “40 and 60 percent of the homeless population floats in and out of full-time and part-time work.”

Soaring Housing Costs
In 1960, the median home value was $11,900. Today, it is $229,000. The average American cannot afford to purchase a home in 70 percent of the country. CBS News reported, “Out of 473 U.S. counties analyzed in a report from ATTOM Data Solutions, 335 listed median home prices were more than what average wage earners could afford.”

A 2019 study by Harvard University supports this data, concluding, “Almost 40 million Americans live in housing they cannot afford.” Researchers defined affordability by how much of a person’s income goes towards housing. The percentage of income in the study deemed affordable was 30 percent or less.

Homeowners spent 19.9 percent of their monthly income on housing from 1985 to 1999. In 2012, price-to-income ratios were 45.4 percent in Portland. The current national average price-to-income ratio is 45 percent.

According to the Harvard study, “The number of modestly priced units available for under $800 declined by 261,000 between 2005 and 2015, while the number renting for $2,000 or more jumped by 1.5 million.”

The Corvallis Housing Crush
Here in Corvallis, housing cost increases are disproportionate to increases in wages by nearly double. The cost of a two-bedroom unit in 2011 was $780 a month. Today, the average apartment costs $1,194 a month. The minimum wage for Oregon in 2011 was $8.50 hourly, and today it has increased to $11.25. If you worked a full-time job as a single parent in 2011, after taxes you would have had $306 left to pay for food, transportation, and everything else. Today, a single parent would have $560 left after taxes. Your cost of housing in 8 years would have risen by $414, but the amount you make would have increased by only $254.

Want to purchase? According to Zillow, the median home price for Corvallis is $363,000. Unfortunately, the median Corvallis household income of $60,212, according to Bankrate.com, supports a home purchase amount of about $290,000 —  assuming a 20 percent down payment, and zero in other debts.

Behind the Numbers
Housing stock is tight and zoning restrictions make it tighter, while increased labor costs and municipal fees mean many builders cannot afford to build affordable housing without subsidies. If, by some miracle, a developer can get the ends to meet for an affordable housing project, neighborhood objections can delay a project so that developers won’t even try — Corvallis has a reputation for driving away affordable housing projects.

Willamette Neighborhood Housing, a Corvallis based non-profit that recently merged with a similar Lane County organization has overcome some of these hurdles over the years. Still, they can only build so much at any given time, and the need continues to grow.

According to a report by Attom Data Solutions, investment properties are contributing to the problem of reduced housing stock. More than three-quarters of the vacant home inventory in the U.S. is owned by investors, the report states. Another study by REAL Trends Inc. shows that 23 percent of residential homes are currently owned by investors.

Another reason for the reduction in available housing is due to the Boomer Generation purchasing multiple dwellings as investments and vacation homes. It was found that 1 out of 4 Baby Boomers own a second home in a 2017 National Association of Realtors report. “About 1/3 of these will be used as vacation homes,” AARP found in the report.

One local couple of the Boomer generation, who wish to remain anonymous, told me they own five homes, only one of which is rented. The other four are used as personal retreats.

Complicating matters, Boomers age in place longer than their previous generation did. Sam Khater, Chief Economist at Freddie Mac, reported, “We estimate that approximately 1.6 million more senior households are staying in place than would have been the case if they had behaved like previous generations of homeowners.”

A company causing major housing stock reduction is Airbnb, and the many home-owners and investors who have turned long-term habitable units into hotel rooms. A report from The Economic Policy Institute cautions, “The largest and best-documented potential cost of Airbnb expansion is the reduced supply of housing as properties shift from serving local residents to serving Airbnb travelers, which hurts local residents by raising housing costs.”

Zoning is another issue for developers and land use planners. Oregon land use laws changed in 1979. Cities like Corvallis now have an Urban Growth Boundary. According to the law, these are meant to ensure an “orderly and efficient transition from rural to urban land use” and “efficient use of land… to provide for livable communities.”

The idea of a UGB was to keep a check on urban sprawl. From the developer’s perspective, the UGBs “restrict the amount of developable land and contribute to increased housing prices and leapfrog development patterns,” according to the National Association of Home Builders.

Fallout from the Great Recession
In September of 2008, 433,000 Americans lost their jobs, and that was only the beginning. 8.8 million jobs were lost in total to the recession, according to the Bureau of Labor Statistics.

Nearly 3 million homes were foreclosed on, 1.2 million households were lost, and millions of homeowners still owe more than their house is worth. Credit scores were hurt, making future housing harder to come by.

The most significant impact the recession had was in driving individuals and families to homelessness. A HUD study conducted from 2007 to 2009 states, “there were almost 62,000 more family members who were in a shelter at some point in 2009 than there were in 2007, for an increase of 30% in the number of sheltered families since 2007.”

Defunding of Mental Health Care
We don’t take very good care of individuals living with mental illness. From a lack of specialized short-term care, long-term treatment facilities, and supportive housing, to absurdly long waits between initial crisis and appointment, and the increasing costs of mental health services, a lot of people in need are finding themselves in places and situations that should have been preventable.

One driver was the shutting down of mental health facilities throughout the last half of the 20th century. Author E. Fuller Torrey, M.D., writes, “On any given day in 1994, approximately 763,391 severely mentally ill people [were] living in the community who would have been hospitalized 40 years ago. That number is more than the population of Baltimore or San Francisco.”

The reason for all this may have started off well intentioned. The idea was to treat severe mental illness in the “least restrictive setting.” The theory of deinstitutionalization was based on “the objective of maintaining the greatest degree of freedom, self-determination, autonomy, dignity, and integrity of body, mind, and spirit for the individual while he or she participates in treatment or receives services,” as defined by President Jimmy Carter’s Commission on Mental Health.

In work published by the Heritage Foundation, John Malcolm and Amy Swearer explain the problem: “As a result of deinstitutionalization, jails and prisons around the country are full of mentally ill individuals perpetually ‘reinstitutionalized’ as a result of their lack of treatment. There are simply not enough psychiatric hospital beds of last resort, leading to a vicious cycle of mental health crises and emergency short-term care that continually burdens community health and safety infrastructures without solving the underlying problem.

“The longer individuals with mental health problems wait for treatment, the more likely it is that a mental health crisis will develop, and the individual will need more intensive treatment for a longer period of time — a situation in which both the mentally ill individual and the community ultimately lose.”

According to the Brain & Behavior Research Foundation’s journal, “At a minimum, 140,000 or 25 percent of [homeless] people were seriously mentally ill, and 250,000 or 45 percent had any mental illness. By comparison, a 2016 study found that 4.2 percent of U.S. adults have been diagnosed with a serious mental illness.”

The John Hopkins Medicine Journal explains, “Nationwide, the number of patients needing emergency psychiatric care has been increasing, while inpatient treatment options have grown scarcer.”

The article highlights a psychiatric nurse practitioner at Johns Hopkins, named Emma Mangano, who has worked there since 2007. Mangano says she has seen a “sharp increase in psychiatric patients coming through the emergency department — people who are suicidal, violent or too agitated or disconnected from reality to function. These include patients with schizophrenia, bipolar disorder, autism, dementia, depression or substance use disorder.”

“The volume of behavioral health patients at the hospital has increased more than 60 percent since 2012, to about 400 patients a month,” the article further states.

Sandra Schneider, MD, Director of emergency medical practice for the American College of Emergency Physicians, stated, “The patients are clearly not getting the best care available if they are sitting in the emergency department for long periods of time. One of the biggest problems around psychiatric patients in the emergency department is that when we see a patient with a psychiatric illness, there are very few resources for us in the emergency department that are there on a 24/7 basis.

“Patients who are violent, have criminal histories, are chronically suicidal, have history of damage to property, or are dependent on drugs cannot be easily placed. They are often discharged back to the streets where they started.”

Veterans suffering PTSD are another group that often needs specialized help.

Mental Health America released a report this year ranking Oregon with the highest prevalence of adults with mental illness in the country.

Incarceration and Reentry
Individuals who have been incarcerated face multiple difficulties upon release. Previous incarceration creates barriers in securing employment and housing, which can lead to homelessness.

“People who have been to prison just once experience homelessness at a rate nearly 7 times higher than the general public. But people who have been incarcerated more than once have rates 13 times higher than the general public,” states a Bureau of Justice Statistics report.

According to the Prison Policy Initiative, the more recent your release, the more likely you will be homeless. “Those who have been out for two years or less are twice as likely to be homeless as those whose reentry dates back four or more years.”

The same study also says, “up to 15% of incarcerated people experience homelessness in the year before admission to prison.”

Drugs, Alcohol, and Opioids

The Substance Abuse and Mental Health Services Administration (SAMSHA) reports that “approximately 26 percent of homeless Americans had some form of mental illness, and nearly 35 percent were affected by substance abuse. Mental illness and substance abuse lead to a destructive cycle in which the effects of both conditions lead to increased poverty, which in turn can reinforce the depression, anxiety, and delusional thinking that reinforce drug and alcohol use.”

In the King County v. Perdue Pharmaceutical lawsuit, King County cites how prescription opioids contributed to their homelessness crisis. “Prescription opioids have not only helped to fuel the homeless crisis, but have also made it immeasurably more difficult for the County to address. Mental health services, for example, are critical for many in the homeless population. Unfortunately, opioid use and addiction can make it more difficult to provide effective mental health treatment. Those who need help most often turn to opioids—legal or not—to self-medicate and avoid getting treatment and care that might lead to long-term success and more positive outcomes. Whether opioid addiction caused these people to lose their homes or not, opioid addictions now prevent countless numbers of people from finding a way out of homelessness.”

Efforts to slow prescriptions for opioids started to take effect, which made it more difficult to obtain the drugs, so people sought illegal drugs, which were cheaper and easier to get. “The use of heroin increased in both sexes, the majority of age brackets, and all socioeconomic groups. Deaths due to heroin-related overdose increased by 286% from 2002 to 2013,” states the National Capital Poison Center. In 2017, there were 47,600 opioid related deaths.

“Approximately 80% of heroin users admitted to misusing prescription opioids before turning to heroin,” states the NCPC.

The Way Forward
Considering the many causes of homelessness — economic disparity, incarceration, addiction, trauma — and the cyclic nature and interconnectedness of these drivers, it is vital that we take a holistic approach when considering solutions, from a local to global scale. Communities that come together to demand adequate support for equitable local economic decisions, can intervene successfully.

Here in Corvallis, we can support our unhoused neighbors by getting to know them and their stories, and asking about their needs. There is more promise in remedying the drivers for homelessness in Corvallis, rather than framing the homeless themselves as a problem needing to be solved.

Shifting from minimum wage to a living wage, and creating more affordable housing, would not only help the working individual, but the whole economy, manifesting greater purchasing power, less debt, affordable medical care, and a sheltered and housed public.

Voters can support policies that mandate federal and state government subsidies on low-income housing development and long-term mental health facilities. We should ask candidates seeking office if they will lobby for the necessary state and federal funding for functional mental health hospitals and long-term care programs. Electeds should also seek to incentivize developers to build low-cost housing, ameliorating the obstacle of low returns on investment.

Finally, wages need rethinking. Laws that enforce regulations on companies to cap executive salaries and disclose the ratio of CEO-to-worker pay gap could help distribute wealth more equally and widely, re-enfranchising many that are currently marginalized.

By Blair Girard