It was 2022 when Jeryn Holden, her 5-year-old son, mother and two dogs became homeless. For about a year, she had been renting a $1,100-a-month home in Cleveland, Tennessee. But, when the owner decided to sell his house to capitalize on the COVID housing boom, Holden was given 30 days to move out.
“We checked other places in the area, and it was way more than we could afford, from $1,400 to $1,600,” she says. Holden and her family were forced to pack their belongings and move into her Volkswagen car.
“We thought, ‘we’re just gonna be traveling for a little while. This is not really homelessness,’” she says. “The first night we slept in the car. The second night, we slept in the car. Then it ended up being two weeks of sleeping in the car. Then we were like, this is real. This is really where we are right now.”
Over 10 months, Holden and her family traveled across the country looking for affordable housing, alternating between one-week hotel stays and two to three weeks living in the car. “It was so difficult to find,” she says. “Everything was so expensive.”
Holden’s experience is not uncommon. In 2024, for the second year in a row, a record number of people in the U.S. experienced homelessness on a single night, according to the U.S. Department of Housing and Urban Development (HUD). That amounts to more than 771,000 human beings living on the street, in shelters, or in unsheltered locations like cars.
What’s causing America’s current homeless crisis? I’d argue it’s fueled by skyrocketing housing costs, which have put homes out of reach for hundreds of thousands of people. Sure, shelter has been expensive before. But both renting and owning are at record highs now – and that, along with a buildup of previous problems and deficiencies, has pushed homelessness to unprecedented heights, too.
How homelessness evolved in the U.S.
A scarcity of adequate shelter has existed throughout American history in one form or another. But widespread homelessness, as I often see today in New York City and other metros, is a relatively recent phenomenon.
“We’ve only had [pervasive] homelessness in the U.S. for about 50 years,” explains Alex Horowitz, project director of the Housing Policy Initiative at Pew Trusts Charitable Trusts. “As recently as the mid-70s, we had a trivial amount of homelessness in the U.S. That’s because low-cost housing was widely available. These were low-cost shared units where people lived in an individual room and usually shared a bathroom down the hall. That housing type was very common.”
The situation began to change in the early 1980s when an economic recession and cutbacks in federal and state housing programs took hold. The combination drastically reduced the availability of low-income residential options like the ones Horowitz describes. This, along with high unemployment and other factors, ushered in the modern era of homelessness, with a significant rise in the ranks of affected people — especially in families with children. While the number of unhoused people has fluctuated since then, so have resources allocated to tackle the problem and increase the inventory of affordable homes.
Fast-forward to the 2020s. The COVID-19 pandemic caused housing costs to explode and, while emergency relief helped for a while, a record number of people became homeless in the aftermath.
“As the pandemic ended, the stimulus money, the rental assistance and all of that extra funding went away, [but] housing costs continue to rise,” says Margot Kushel, MD, professor of medicine and director of the Benioff Homelessness and Housing Initiative at the University of California, San Francisco. “The eviction moratoria didn’t make them whole or their landlord whole.” Many individuals also lost their jobs, and soon found themselves behind on their rent: “They owed money and had no way to catch up and pay that back. All of these people were then left with no safety net” — and often became homeless, once the forbearance programs ended and eviction bans were lifted.
The income/housing cost gap
The pandemic and its inflationary aftermath — with home prices at record levels — may have precipitated the current crisis. But the reality is, it only accelerated a problem that’s been brewing for decades: the income/housing cost gap. Odds are, your income probably hasn’t kept pace with the expenses involved in having a home — whether you own or lease.
“There’s a long-term trend, even longer than 20 years, even going back to WWII, where the price of modest housing is going up faster than wages. That just makes the homelessness problem worse and worse,” says Steve Berg, chief policy officer at the National Alliance to End Homelessness. “People own their home, but then circumstances change. Whatever happens, they can’t afford it anymore. They lose that [their home], then find out they can’t afford rent either and end up in a homeless shelter.”
Remember that oft-quoted benchmark that families shouldn’t spend more than around a quarter (25 to 28 percent) of their income on housing? Forget that financial goalpost — it’s out of date. One-third of income is closer to the mark nowadays.
More specifically, nearly half of renters — almost 20 million American households — spend more than 30 percent of what they make on housing, according to the Census Bureau. And financial services/mortgage tech company Intercontinental Exchange (ICE) estimates that at today’s mortgage rates, it requires 33.5 percent of the median household income to afford the median priced home. The NAHB/Wells Fargo Cost of Housing Index, which tracks both national and specific metro data, puts it even higher: 38 percent.
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Over 30%
The U.S. Department of Housing and Urban Development characterizes households as “cost-burdened” when they spend more than 30% of their income on rent, mortgage payments, and other housing costs. Households spending more than 50% of their income on housing costs are considered “severely cost-burdened.”
“They’re not spending it on food. They’re not spending it on health care. They’re not putting it away for a rainy day,” says Kushel. It’s all going towards the roof over their heads, and even so, “they are one small crisis away from being out in the street.”
What’s also distressing is that a growing number of employed people are homeless, even if they’re holding down two to three jobs. Despite working as a freelance writer and graphic designer, Holden found herself in that unfortunate position.
“At the time, [I earned] $50,000 to $75,000 a year, so definitely not chump change,” she says. “We’re talking about a good, decent living, and it still couldn’t afford us housing.”
What’s behind the shortage of low-cost housing?
It’s simple economics: When a commodity is scarce, it becomes more expensive. “Housing costs are higher because there simply aren’t enough homes of any type in the U.S.” says Horowitz. “That pushes up rents for everyone.”
The housing shortage has been a reality for quite some time, with some accounts putting the shortfall at as many as 5.5 million homes. In particular, low-cost housing is in short supply. But, Berg notes, when “there are affordability issues throughout the range of the housing market,” it affects Americans at all income levels.
As Berg explains, people who would have been homeowners 20 years ago are stuck renting because buying has gotten out of their reach. So they’re sucking up a lot of the rental supply, and – because they can afford to pay more — causing rents to rise. Unable to compete, the traditional candidate for moderate housing is being priced out.
“The people with the lowest incomes who would be renting the lowest-cost housing end up on the streets,” he says.
The high-cost coastal cities, where homelessness is the “most explosive,” have failed to create enough housing to meet demand, Kushel notes. The ‘not in my backyard’ (NIMBY) movement has been a significant barrier in particular. NIMBY supporters argue against low-cost housing in their neighborhoods out of concern it could lower property values and lead to a diminished quality of life, among other issues.
“Frankly, they’re blocking all forms of housing, but [it’s] absolutely true, they’re blocking housing for the lowest-income households,” she says. “Even more so, they’re blocking dense [multi-unit] housing. They’re blocking subsidized housing, sometimes even delaying for a couple of years, which adds enormously to the cost of housing and exacerbates the [homeless] problem.”
Reducing homelessness through housing initiatives
Given the lack of affordable housing, building more low-cost homes and rental properties seems like an obvious solution to the homeless problem, right? Unfortunately, there’s a big lag between solution and execution.
“We were in a similar situation 20 years ago, where everybody said, ‘It takes a lot to develop affordable housing,’” says Berg. “If they had actually started 20 years ago, we would have a lot of affordable housing right now, but we still have this problem.”
What can be done — and what keeps it from happening?
Reforming zoning regulations
Zoning regulations, typically set by local governments, often create barriers that make building low-cost housing more difficult or expensive.
“The building process has gotten costlier and more cumbersome,” says Horowitz. “While single-family detached homes, the most expensive type of housing, are allowed on most residential land, there are fewer places with less-expensive homes like townhouses, duplexes, condos, apartments and homes that can be shared between a large number of people.”
Recently, there has been a promising shift, with more states greenlighting housing construction, decisions that are usually regulated to municipalities. In 2024, Arizona, Florida and Maryland were among the states that passed legislation to build low-income apartments.
“It’s appropriate for states to recognize that the housing shortage is causing problems at the state level, and they are,” says Horowitz. “That’s good news for housing affordability, and it’s good news for reducing homelessness.”
Replicating local success nationwide
The number of homeless people I see in New York City and the limited amount of low-cost housing there convince me that homelessness is an unsolvable problem. But maybe not. As Horowitz points out, some large cities in the U.S. have successfully reduced homelessness by stepping up housing construction.
“Houston has a lot of low-cost housing because they make it easy to build and keep adding to their housing stock,” he says. Organizations like The Way Home are working to prevent and end homelessness in the city by combining permanent housing with supportive lifestyle and health services like substance abuse counseling. It’s this kind of assistance that can help people stay housed for the long term. As a result, “Houston has by far the lowest homelessness rate in any big city, about a sixth of the homelessness in the U.S. overall.”
In 2018, Minneapolis became the first major city to allow duplex and triplex rental housing in areas zoned for single-family-only housing. Initiatives like the Minneapolis 4D Affordable Housing Incentive, which offers property tax reductions, have also motivated property owners and builders to prioritize low-cost housing.“Cities like Minneapolis have made it easier to build and have seen homelessness go down,” says Horowitz.
Converting vacant buildings into residences
Since the pandemic, homeless people aren’t the only things I’ve seen in greater supply in New York City. Office vacancy rates are at an all-time high as the pandemic upended the workplace and showed us that many jobs could be done from anywhere. Horowitz suggests pulling something from an old playbook to fill those empty structures: converting empty commercial spaces into residential ones, as NYC did in the late 1980s and early 1990s.
“It’s a way to get a lot of housing that is well located online quickly,” he says. “The conversions cost much less than building a regular, full-scale apartment because the plumbing is [already] in the middle of the floor. That saves costs on kitchens and bathrooms. It’s the kind of housing we had a lot of when we didn’t have any meaningful amount of homelessness in the U.S. about 50 to 80 years ago.”
The lingering impact of homelessness
In the midst of rationing McDonald’s meals, paying $14 for showers at truck stops and sleeping backbreaking nights at rest areas and gas stations, Holden remained focused on finding a place to live. The freelance writer composed essays to convince landlords to rent to her family. She also tried getting a first-time homebuyer loan to purchase a house. All was to no avail.
She had little success with public programs, too. “Section 8 has a wait list of two years, depending on what county you’re in. It’s insane,” says Holden. “There are government programs you can apply to, except they’re all maxed out.”
If it were not for a relative willing to rent a basement apartment to Holden and her family, they would still be homeless. While Holden is grateful for a place to call home, the scars of being homeless were slow to heal. “For three months, I would wake up with panic attacks because I thought I was back in the car and I didn’t know where I was.”
Her future is also uncertain. “I don’t have retirement [funds] and I probably never will. Maybe someday I will be able to buy a house, I don’t know. My credit is wrecked from being homeless. I don’t know if that would ever be a possibility,” she says.
Can the housing costs/homelessness problem be fixed?
I fear that 2025 will usher in an even deeper homeless crisis. Home prices continue to rise and rents and mortgage rates stubbornly refuse to drop. Forecasts are that high demand and low inventory will remain the status quo, pushing homeownership out of reach for all but the well-heeled.
Nevertheless, the experts I interviewed insist that the homeless problem can be fixed. I want to believe them, but I question if housing affordability-focused initiatives like revamping zoning regulations, boosting incentives to build low-cost housing, and converting vacant commercial buildings into residences will be enough — even if they’re combined with personal support services.
I look forward to the experts proving me wrong. I hope for a future when I never see a homeless person on the streets. I hope Holden and her family will never have to live in her car again. And that she can purchase a beautiful home one day.