During a recent trip to Chicago, I couldn’t help but notice the large number of homeless people in the downtown area, including one homeless man pushing a child in a stroller. Homelessness was frequently discussed during the 1980s, but seems to receive less media attention now. And yet, the number of homeless today is approximately twice as large as it was in the 1980s.
Homelessness, like any other social problem, is influenced by incentives. Unfortunately, government policy may actually be making the problem worse, particularly government-subsidized housing for the poor.
Many cities have constructed homeless shelters to provide a place for the homeless to stay out of the cold. By the late 1980s, governments created a network of shelters and soup kitchens to feed and house between 200,000 and 300,000 people per day. Between 1988 and 1996, some 275,000 permanent and transitional housing units intended for homeless persons were added. By 1996, roughly 607,000 beds were available as part of the homeless service system in the United States.
There is little evidence to suggest that government-provided shelter has in any way solved or even reduced the problem of homelessness — to the contrary, as noted, the total number of homeless has risen. While advocates for the homeless recognize this, many believe that providing other forms of government assistance will help people avoid homelessness or escape it. In their view, helping people get government-funded rental assistance, food stamps, and welfare checks is integral to preventing homelessness. Some contend that supplying the homeless and those at risk of becoming homeless with permanent housing at government expense will get homeless people off the streets so they can live stable lives.
In truth, lack of affordable housing is not the main reason that people become homeless, although it may be a contributing factor in some cities. People sometimes become homeless due to habits or addictions that lead to mismanagement of their finances, unstable family relationships, and the inability to keep a regular job. According to Martha Burt of the Urban Institute, three quarters of those who are homeless report having problems with alcohol, drug abuse, or mental illness.
Oftentimes, providing government-funded services to the homeless with no strings attached only makes it easier for some of them to continue their bad habits, whether the problem is substance abuse or an unwillingness to accept responsibility for personal behavior. This explains why homelessness did not decline but increased between the early 1980s and 2007, even though the economy was booming and unemployment and poverty were declining. Christopher Jencks argues that shelters made homelessness less painful; this meant that the homeless were “less willing to sacrifice their pride, their self-respect or their cocaine fix to avoid” homelessness. For many people, the availability of shelters seems to increase the incentive to become homeless rather than (if possible) choosing to live with a relative or friend.
Not only does the availability of temporary shelters frequently encourage homelessness, but so does federal housing policy. Many single-parent families would like to move into government-subsidized housing. Because it is in short supply, they would have to wait years for a subsidized apartment to open up. By becoming homeless, a family who was living in someone else’s home can move to the front of the line for government-subsidized housing.
Likewise, another form of government assistance is problematic: Government programs that try to provide people with skills and treatment to overcome addictions and psychoses are expensive and have low rates of success. The success rate of some private programs to help the homeless is much higher than government programs — as high as 85 percent. While government programs continue to be funded even if they are ineffective, private charitable organizations’ long-term survival depends on getting good results. Successful private programs usually continue to attract donors and volunteers, including former homeless people who themselves have been helped.
It is only natural to feel sympathy for the plight of the homeless. The solution to homelessness, however, is not more handouts from government. Homelessness can be prevented or overcome when a caring community helps those at risk to develop self-discipline and a good work ethic. This is not easy to do, but some private organizations are already doing good work in this area. Those organizations might grow and multiply and also be more effective if government programs, which often interfere with private efforts, were scaled back or eliminated.
Dr. Tracy C. Miller is an associate professor of economics at Grove City College and contributing scholar with The Center for Vision & Values. He holds a Ph.D. from University of Chicago.
Publication date: June 5, 2012