Economist: Homelessness could spike 20% in California as jobless struggle during pandemic

San Francisco Chronicle, May 15, 2020

By Peter Hartlaub


A sobering analysis from a Columbia University economist is projecting a 20% rise in homelessness in California this year, and a potential 40% to 45% increase nationwide, as the coronavirus continues its economic shock.


Economics Professor Brendan O’Flaherty’s projection comes as national unemployment rose to 14.7% in April and as Gov. Gavin Newsom predicted this week that California unemployment could climb to 25% while tax revenues drop by the same number.


O’Flaherty said the U.S. is in uncharted territory, and the figures he calculated didn’t stray from his expectations.


“I don’t think it’s a surprise,” O’Flaherty said. “We know that homelessness responds to unemployment. ... If you’ve got a bunch of people who don’t have any money, you’re going to have a bunch of people who need a place to live.”


Anya Lawler, a housing advocate at the Western Center on Law & Poverty, hadn’t seen the analysis, but already expects staggering numbers.


“It’s hard for all of us to wrap our minds around ... the magnitude of the crisis,” said Lawler. “We have no idea how long we’re going to be sheltering in place, and we have no idea what the slow return to normal … is going to be. We know we’re looking at an enormous crisis, but we still don’t know how enormous.”


To get the figures, O’Flaherty took unemployment projections and used a standard regression developed by Kevin Corinth, White House chief domestic policy economist, who determined that for every 1% increase in the unemployment rate, homelessness increased by 0.6 per 10,000 people.


California’s number is projected to be lower than other states in the model, he said, because it already has a higher rate of homelessness.


O’Flaherty said there’s nothing revolutionary to the model: He called it “a simple calculation” from existing data that’s not part of a larger academic study. The figures don’t account for factors such as a stimulus bill or relief for renters and landlords. But O’Flaherty said not all factors are mitigating, and pointed out that the potential for shared dwellings is decreasing as the rental inventory stays the same.


“There’s demand for living space now that has gone way up,” he said. “People don’t want to live with other people anymore, because there’s a real cost to it,” including in college dorms.


Lawler said she is particularly worried about a potential homelessness surge once California’s 90-day hold on most evictions, enacted in early April, ends.


“We are going to see a lot of very poor people having no other options than to simply be in their car or on the street or some other place not intended for human habitation,” she said.

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