A difference between the Great Recession and the pandemic is that this time job losses hit renter households far harder than homeowners. (Photo: Ronda Churchill)
If Nevada isn’t careful, the state could see a spike in homelessness in the next couple of years.
A new report from Brookings Mountain West at UNLV released Monday — “How Did Homelessness Change During the Great Recession and Recovery” — draws on lessons from the foreclosure crisis starting in 2007, which was followed by an increase in homelessness.
“Based on past research, we would expect the largest increases in homelessness in places with expensive housing, limited availability of rental housing, and where COVID has hit jobs the hardest—metro areas like Los Angeles and Las Vegas,” wrote Jenny Schuetz, fellow at the Metropolitan Policy Program at Brookings, who authored the report.
The report looked at outcomes in Las Vegas, Los Angeles, Phoenix and Riverside, California, and noted the pandemic isn’t a direct parallel to the Great Recession.
“Job losses in the pandemic have hit renter households far harder than homeowners,” the report said.
“This time around, it’s even more direct because renter-based households have really borne the brunt of job losses,” Schuetz said in an interview Wednesday. “Job losses have been concentrated in low-wage jobs like food services and retail and, in Las Vegas, the entertainment sector. Most of those households working those jobs were renters, and didn’t particularly have a high income or savings before the pandemic hit.”
Following the Great Recession, many homeowners became renters, putting pressure on the rental markets.
“There was more competition to rent apartments,” Schuetz said. “As the Great Recession wore on, unemployment increased, there were more and more people who didn’t have a job who couldn’t pay for housing. All of that is the exact economic pressure that can lead to increased rates of homelessness.”
She added most of the policy solutions that followed focused more on fixing the mortgage market and there was “a lot of federal activity writing new rules for who could qualify for a mortgage.”
There wasn’t a lot of policy focus on the rental market.
“As the economy strengthened, there was increasing demand for housing,” she said. “Population was growing but we didn’t build enough housing. There was a long period of time after the Great Recession when construction fell almost to zero. We weren’t building enough homes and accumulated a deficit of homes for people to live in that drives up rents and leads to this scarcity.”
The last two legislative sessions, lawmakers have killed bills seeking to enable local governments to create more affordable housing. At the same time, the majority of bills offering modest tenant protections have failed.
Housing justice groups have noted the pandemic was a crisis on top of an already existing housing crisis.
Because of misinterpretations and bad information about the unhoused, Schuetz said there is a focus on homelessness being about “individual failings” instead of the lack of housing and low wages.
“One of the misconceptions about homelessness is that it’s essentially driven by people’s individual behavior and that it’s about mental illness or substance abuse,” she said. “What we know from the research is mostly about whether people can afford a place to live. It’s about their financial circumstances, whether they have a job, what kind of income they earn and the cost of housing.”
The National Low Income Housing Coalition reported in 2021 the hourly wage needed to afford a two-bedroom apartment in Nevada is $21.83.
The state’s current minimum wage recently increased to $8.75, or $9.75 if employers don’t offer health care.
Communities that don’t have enough rental housing, “or housing is expensive or wages are low and some combination of that, then the community is likely to have a higher rate of homelessness,” Schuetz said.
When numbers don’t tell the story
Southern Nevada’s point-in-time count, where service providers do a physical assessment of who is sleeping on the streets or in emergency shelters and transitional housing, showed homelessness decreased in 2021.
The 2021 count, conducted in January, showed 5,083 people experiencing homelessness on any given night, 55% were unsheltered. Data from the count indicates 12,030 will experience homelessness at some point in the year.
While the numbers are down from the previous year — 2020 data showed 5,283 experienced homelessness on any given night and 13,076 would become unhoused at some point — Schuetz said there is a big asterisk by the estimate since the count was down during the pandemic.
Those numbers also don’t reflect how nuanced homelessness can be.
The point-in-time count, as the Brookings report states, is important, but it “does not attempt to count people who are temporarily staying with other households, so the survey understates the full extent of people who lack long-term stable housing.”
Families who double up on housing, people who couch surf for long periods of time and those who sleep in their cars are often overlooked.
“There can be as many as two sheltered homeless people who are off the streets but not in places we can see them for every person that we count,” she said. “How much does the homeless population get picked up in the point-in-time count? We really just don’t know because a lot of them are essentially invisible.”
Schuetz added that “by the time the PIT data show an increase in homelessness, families and individuals will have experienced long-term damage to their households’ financial, social, and physical well-being.”
In addition to using American Rescue Plan funds to provide an unprecedented amount of rental assistance to fill immediate needs, Clark County and the state are figuring out how to use billions of dollars in funding to address the housing crisis.
The report underscores how vital it is for municipalities to distribute rental assistance as quickly as possible to keep people housed and “provide more support to low-income renters.”
“If local governments are the ones left holding the bag, if there is going to be a spike in homelessness, that means more demands on social services and that means kids performing badly in school,” Schuetz said. “It becomes really difficult for a community to deal with, so you want to get out in front and prevent that from happening.”
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.