US homelessness could increase 45 percent because of coronavirus unemployment, study says
With the coronavirus-induced shock to the economy crippling businesses of all sizes and leaving millions of Americans out of work, homelessness in the United States could grow as much as 45% in a year, according to a new analysis conducted by a Columbia University professor.
That would mean an additional 250,000 or so people would be without permanent shelter compared with the 568,000 who were homeless in January 2019, according to government data.
California is likely to see a smaller increase in homelessness than the nation overall — up 20% from about 150,000 to 180,000 people. The analysis relies on the largely constant rise in unemployment across the United States. Therefore, states with fewer homeless people are likely to see bigger percentage increases than California, which is already home to a quarter of the nation's homeless population.
Dan O'Flaherty, the professor who conducted the analysis and has studied the economics of homelessness for decades, says the downturn is exacerbating what's already a public health crisis on many American streets.
"This is unprecedented," he said. "No one living has seen an increase of 10% of unemployment in a month."
This week, the Bureau of Labor Statistics reported that the jobless rate in April reached 14.7% — a level not seen since the Great Depression. And as of last week, nearly 3 million workers applied for unemployment benefits, bringing the total to 36.5 million over the last two months.
On Thursday, Gov. Gavin Newsom offered an even grimmer picture of what is to come for California, projecting that unemployment will peak at 24.5% and end the next year with a jobless rate of 18%.
Many economists believe it will only get worse.
"Among people who were working in February, almost 40% of those in households making less than $40,000 a year had lost a job in March," Federal Reserve Chair Jerome Powell said Wednesday, citing a separate Federal Reserve survey. "This reversal of economic fortune has caused a level of pain that is hard to capture in words, as lives are upended amid great uncertainty about the future."
The federal government has spent trillions of dollars so far to put more money in people's pockets with stimulus checks and small business loans, but many Americans continue to struggle to make ends meet as the economy remains mostly shuttered to slow the spread of the coronavirus.
In the meantime, a patchwork of local and state measures has emerged to provide relief to renters and homeowners.
Congressional Democrats released a proposed $3-trillion stimulus package this week that includes $100 billion in emergency rental assistance. The bill provides $11.5 billion to fund homeless prevention programs, $75 billion to aid homeowners struggling with their bills and a more expansive eviction moratorium than what was in earlier legislation.
The response from Republicans has been lukewarm.
Also this week, Newsom announced a plan to ask landlords to forgive rent payments in exchange for equally sized tax credits spread out over a 10-year period starting in 2024. The tax credits would be transferable, meaning the property owner could sell them to an outside investor and get cash immediately.
In the city of Los Angeles, landlords are currently not allowed to evict tenants who have been affected by the coronavirus. The L.A. County Board of Supervisors have passed similar protections for renters in unincorporated areas.