The Cities Where Rent Hikes Leave the Most People Homeless

(Bloomberg) -- When the rent rises 5 percent in Atlanta, another 83 people become homeless. In New York, about 3,000 do.

In a new study, Zillow compared its own estimates for median rent increases in major U.S. cities with homelessness data published by the U.S. Department of Housing and Urban Development in an effort to describe the relationship between rising rents and homelessness. Its conclusion: Much depends on where you live.

That 5 percent rent hike in Atlanta can be expected to boost the homeless population by 1.5 percent—in New York, by 3.9 percent. Cities such as Pittsburgh, Minneapolis, and Detroit may have smaller homeless populations, but theirs are also sensitive to rising rents. 

Rent hikes are likelier to force more people into homelessness in housing markets with less slack, said Skylar Olsen, a senior economist at Zillow. Cities such as Houston and Tampa, she added, have been more successful in preventing rising rents from forcing people out of their homes. The study used the geographic definitions that HUD uses to count homeless populations, she said.

The U.S. is short more than 7 million housing units that extremely low-income households can afford, according to the National Low Income Housing Coalition, which defines such households as earning less than 30 percent of area median income.  Such low-income renters may not be living in homes with the area's median rent, but a median rent hike can boost prices for even the cheapest market-rate units. 

“There's an overarching supply of units that's becoming a real problem,” Olsen said. “People move down the ladder, and it pushes everyone else down, and eventually the bottom rung falls off.”

Thousands of low-income households could face another crush from cuts, proposed by the White House, that would strip $7.4 billion from HUD's 2018 budget. Those cuts would eliminate 250,000 rental-assistance vouchers from the Housing Choice program, also known as Section 8, according to an analysis by Douglas Rice, a senior policy analyst at the Center for Budget Policy & Priorities.

Some of those cuts will be cushioned by regular turnover, since some number of voucher recipients move out of the program every year, for one reason or another. But the level of proposed cuts means many local housing authorities will have to reduce how much assistance they supply to voucher holders—or, in some cases, take it away entirely. 

1. Nationally, median income was about $57,000 in 2015; a single person working full-time at the federal minimum wage of $7.25 would earn about $15,000 a year.

To contact the author of this story: Patrick Clark in New York at pclark55@bloomberg.net.

To contact the editor responsible for this story: Samantha Schulz at sschulz17@bloomberg.net.