Homelessness is a housing issue

What causes homelessness? There are many well-known superficial answers to the question. For example: poverty causes homelessness. A moment's reflection will tell you this cannot be right, though: while almost all homeless people are poor, an overwhelming majority of poor people are not homeless, so poverty can be a necessary condition, but it can't be sufficient. Another answer: mental illness/drug problems/domestic violence cause homelessness. However, it turns out this answer is wrong, too; research has shown that (aggregate) changes in rates of substance abuse or mental health hospitalizations are not correlated with changes in homelessness. In other words: if substance abuse causes homelessness, then an increase in the number of alcoholics should cause an increase in the number of homeless people. But it does not. So what is the cause?

Research conclusions here are probably as clear as they ever get in social science: homelessness is caused by a conjunction of three factors, namely poverty, housing market conditions and housing policies. More precisely, people will face a high risk of becoming homeless if 1) They are very poor; 2) They live in a place where lowest available market rent is very high and 3) They live in a place where government subsidies towards rent are hard to come by. (For sources, see here, here and here.) Poverty can make you homeless only if the housing market and government policy conspire against you as well. Substance abuse, mental illness and domestic violence have mostly an indirect impact, in that they cause poverty.

All of the above is summed up nicely by a homelessness researcher, psychologist Dennis P. Culhane in a short press piece "Five Myths about America's Homeless." If you don't feel like reading it, the myths are 1) That homelessness is a chronic condition; 2) That most homeless people have mental health problems; 3) That most homeless people don't work; 4) That homeless shelters are a good policy response and 5) That government rent vouchers do not improve the situation by much.