Home­less­ness surge is feared

A study finds that the num­ber of Amer­i­cans with­out shel­ter could rise by 250,000.

Los Angeles Times - - FRONT PAGE - By Ben­jamin Oreskes

The pan­demic-fu­eled eco­nomic cri­sis may cause 250,000 more Amer­i­cans to lose shel­ter.

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 nearly 3 mil­lion work­ers ap­plied for un­em­ploy­ment ben­e­fits last week, 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 Chair­man 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 into 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.

The Demo­cratic-led House on Fri­day passed a $3-tril­lion stim­u­lus pack­age 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 Se­nate 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.

Dan Flam­ing, pres­i­dent of the Eco­nomic Round­table in L.A., said these pro­vi­sions to help keep some peo­ple in their homes over the next few months won’t last for­ever.

“There will be a day of ac­count­ing,” he said. “When some­one has three or four months rent due, what hap­pens then?”

Flam­ing said that there’s “a pow­er­ful con­nec­tion be­tween un­em­ploy­ment and home­less­ness.” Which in­dus­tries lay off and cut work­ers’ pay also will in­flu­ence the size of the in­crease in home­less­ness. He also noted that pub­lic em­ploy­ment pro­grams would greatly ben­e­fit those who are soon to find them­selves out of work.

O’Fla­herty said that this re­search model doesn’t ac­count for how home­less­ness might be af­fected by rent re­lief ef­forts or changes in the hous­ing mar­ket, such as a de­cline in rental prices.

Still, the anal­y­sis shows the pos­si­ble scale of the prob­lem that Los An­ge­les and other cities and coun­ties could face go­ing for­ward. What’s more, cities, coun­ties and states will have fewer funds to re­spond to the home­less­ness cri­sis be­cause of the coro­n­avirus­prompted de­cline in tax rev­enue.

To ar­rive at his es­ti­mate, O’Fla­herty started with the ex­plo­sive drop in em­ploy­ment. He used a pre­vi­ous study that found that dur­ing the Great Re­ces­sion, for every 1% jump in the un­em­ploy­ment rate, home­less­ness per 10,000 peo­ple grew by 0.65.

He then looked at sev­eral pro­jec­tions for un­em­ploy­ment in July, which could rise to 16%, and ar­rived at the fact that a to­tal of 800,000 Amer­i­cans would be home­less by sum­mer.

“Our best guess about what the fu­ture will be is what the past has been,” O’Fla­herty said, re­fer­ring to how home­less­ness grew in the last re­ces­sion.

In typ­i­cal times, lo­cal and state gov­ern­ment es­ti­mate changes in their home­less pop­u­la­tions based on fed­er­ally man­dated point-in-time counts. The data from L.A. County’s count is ex­pected to be re­leased in June, but won’t re­flect the rapidly chang­ing sit­u­a­tion on the ground as it was con­ducted in Jan­uary — months be­fore the eco­nomic up­heaval of the pan­demic and ef­forts to get vul­ner­a­ble home­less peo­ple into shel­ters and ho­tels.

Still, Flam­ing said no mat­ter how quick the eco­nomic turn­around, the upticks in home­less­ness are here to stay. “Peo­ple do ev­ery­thing in their power to hang on to shel­ter, and com­plete des­ti­tu­tion is a lag­ging out­come,” he said. “Re­cov­ery from com­plete des­ti­tu­tion lags even more, so the in­creases in home­less­ness that we see are likely to be with us for a while.”

More peo­ple on the streets and in shel­ters means more peo­ple who are vul­ner­a­ble to con­tract­ing the coro­n­avirus be­cause they can’t shel­ter in place and iso­late.

“We’re sup­posed to shel­ter at home. We’re sup­posed to wash our hands,” O’Fla­herty said. “We’re sup­posed to do all these things the home­less peo­ple can’t do. It’s not only a tragedy for the peo­ple in­volved. It’s a way of feed­ing the COVID fire a lit­tle bit more.”

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