Habitat for Humanity estimates that 150 million people are homeless globally and that 1.6 billion lack “adequate shelter.” In the United States, the Annual Homeless Assessment Report in 2019 counted 553k homeless people which was thought to be closer to 580k at the start of the pandemic in early 2020 – nearly equal to the number who have succumbed to the coronavirus. Undoubtedly, that number spiked over the course of 2020 with the pandemic’s devastating economic dislocations. As many of the homeless are older, and now at significant risk of Covid infection, housing services for the homeless are quickly becoming healthcare services for the elderly. Nearly 65% of homeless are either Black or Latino.
The most current U.S. Census Bureau data estimates that there are 139.7 million “housing units” in this country of ~330 million people, of which approximately 83 million are single-family homes. The homeownership level at the end of 2020 was more than 65.5%, marking a recovery from the lows reached in the middle of the last decade after a pronounced decline caused by the Great Recession. The Urban Institute (UI) determined that Black homeownership was 44.1%, while Latino and white ownership levels were 49.1% and 74.5%, respectively, further highlighting racial inequities. The UI projects that for the first time ever by 2040 the level of ownership for each generation will be lower than the preceding generation at that same age.
Ownership has a number of implications, most profoundly with wealth creation. Last year was a scorching hot year for home sales, in large measure due to 30-year fixed mortgage rates below 3.0% and the mass pandemic migration out of cities. The median home price at the end of 2020 was $310k (the median new home price was $346k). According to the S&P Case-Schiller National Home Price Index, home prices increased by 10.4% in 2020 with December 2020 showing the greatest monthly increase in the last seven years, often pricing the less fortunate out of the market.
Ironically, the National Association of Realtors (NAR) identified 1.07 million homes for sale at the end of 2020 (and likely below 1.0 million at the end of 1Q21), which was a 23% decline from the end of 2019, further driving up the price of available homes, putting home ownership even further out of reach for many. Notwithstanding a recent rise in interest rates, the Mortgage Bankers Association forecasts that there will be $1.57 trillion of new mortgages issued in 2021. Since last summer, eight of the top thirty mortgage lenders have filed to go public.
Household wealth in the United States was $130.2 trillion at the end of 2020 according to Federal Reserve data, which was 5.6% ahead of 3Q20 levels and over 10% from year-end 2019. Obviously, the dramatic increase was in part due to the recovery in public equities but in large measure to the significant increase in real estate values. The Federal Housing Finance Agency estimated that 46% of the wealthiest 20% of the country were able to stay at home during the pandemic, while only 35% of the poorest 20% could do the same, obviously meaningfully increasing the risk of coronavirus exposure.
Government relief comes in a number of ways. The recently passed Covid relief bill calls for $21.6 billion in emergency rental assistance, $5.0 billion in housing vouchers, and $850 million for tribal and rural housing support, although some legislators believe between $70 – $100 billion in housing aid is required. Importantly, at the pandemic’s onset, a number of states severely limited the potential to be evicted or have necessary utilities cut off. According to the Federal Housing Finance Agency, nearly 70% of all states have banned utility shut-offs. An analysis by the Center on Budget Policies and Priorities estimates that approximately 20% of renters are now behind on their rent payments.
Of course, government relief programs have limitations. First and foremost, no single federal or state agency “owns” this issue, severely limiting accountability and creating inefficiencies. For instance, the $22 billion Section 8 housing voucher program managed by the Department of Housing and Urban Development (HUD) has led to both abuse and discrimination. This month a massive lawsuit was filed against 88 brokerage firms and landlords in New York City, alleging systemic bias against those with housing vouchers; there are 125k households in NYC that rely on such vouchers.
A recent study by the Social Science Research Network found that the 27 states that lifted eviction moratoriums (of the 44 that had initially implemented them), the incidence of Covid infection was a staggering 1.6x of those remaining 17 states that left the moratoriums in place (this increased to 2.1x after sixteen weeks). Mortality rates were also 1.6x greater but increased to 5.4x after sixteen weeks. Just between March and September 2020, it is estimated that there were 11k deaths tied to the lifting of state eviction moratoriums. Shocking.
Mortgage forbearance programs tend to last up to twelve months and are now starting to wind down. According to Black Knight Inc., a mortgage data analytics firm, more than 50% of the 2.7 million forbearance cases will end in 2Q21, likely causing a spike in the number of homeless people.
Early data are quite troublesome when studying infection rates among the homeless. Currently, the general population is showing ~4.5% positivity rate for Covid, markedly down from ~12.5% during the winter peak, according to Johns Hopkins data. The National Health Care for the Homeless Council estimates that positivity rates for the homeless population are now between 9% – 12%, further compounded by their lack of access to quality healthcare. At the outset of the pandemic, positivity rates at community health centers with Section 330(h) grant funding were 15%, only to settle around 10% after each spike.
Setting aside the pandemic, life expectancy for the homeless is significantly lower. The homeless charity Crisis in the United Kingdom found in research conducted in 2011 that life expectancy rates were as much as 30 years below that of the general population. Twenty years ago, one of the most comprehensive studies of this issue was conducted at the Columbia University Center for Homeless Prevention Studies, which found that across the U.S. mortality rates were approximately 4x that of the general population.
One tragic consequence for many now confined to their homes has been the incidence of lead poisoning among children. The Centers for Disease Control and Prevention estimates that 20 million homes still have unsafe levels of lead paint, even after a determined effort since the 1970s to reduce the incidence of childhood lead poisoning, further underscoring the issues associated with inadequate housing stock. With a nearly 50% reduction in regular lead testing due to Covid, fears are that as many as 2% of all children now may have elevated levels of lead.
Many point to the significant HUD budget cuts of the early 1980s as to when structural homelessness became a chronic condition. Today it is estimated that in two of the largest states (New York and California) that the level of homelessness is 0.47% and 0.38%, respectively. The Bureau of Labor Statistics projects that by 2026 approximately 30% of the labor force will be between 65-74 years of age, and that 2.4 million of those senior citizens will not be able to afford adequate housing. The aging of America will quite literally add to the homeless population, further pressuring the resiliency of the $93 billion spent on public health infrastructure.
A cruel irony here is that much of the business model innovation in healthcare today is to move as much care as is feasible to the home. With great fanfare last week, DoorDash announced an initiative to provide same-day home delivery of approved Covid test collection kits. Optimal healthcare is meant to “meet you where you are” but what does that mean if you are homeless?