Nearly 700 homeless families in Massachusetts are living in hotels at state expense because emergency shelters are full. New York City saw a 40 percent rise in families seeking shelter since the recession began. School districts nationwide reported more homeless kids in the fall of 2008 than the entire year before. And tent cities have sprung up throughout Hawaii and in Sacramento, Calif., Reno, Nev., Phoenix, Portland, Ore., and other cities.
It's one of the most alarming aspects of the economic crisis: State officials are seeing levels of homelessness they have never seen before. President Barack Obama's $787 billion economic stimulus package includes $1.5 billion to address the problem, but officials say it's not enough to cover the cost of housing for millions of families in crisis.
As many as 3.4 million Americans are likely to experience homelessness this year - a 35 percent increase since the recession started in December 2007 - and a majority will be families with children, according to the National Alliance to End Homelessness. The predictions are based on rising levels of unemployment and poverty, plus a severe shortage of affordable housing created, in part, by the mortgage industry collapse.
By the time a family shows up in a shelter, they've done everything possible to avoid homelessness - stayed with friends and family members, gone without food and sold their possessions. They've expended every financial and social resource they have. Some were middle-class families felled by layoffs and ballooning mortgages.
Nationwide, some 9.6 million families spend more than half of their income on housing, putting them at high risk of becoming homeless, according to the National Low Income Housing Coalition. In addition, apartment building foreclosures are causing families to be evicted even when they are paying rent on time, said Linda Couch, the coalition's deputy director.
Before the economic crisis struck, states had made progress getting homeless families and individuals off the street. Homelessness declined 10 percent between 2005 and 2007, as states and cities began subsidizing permanent housing for working families and moving chronically homeless individuals with disabilities into specialized care facilities.
But as homelessness rises, revenue-strapped states will be hard pressed to maintain those gains.
Experts agree that the only effective method of reducing homelessness is to quickly move people into permanent homes and pay their rent until they regain their footing. Without stable housing, people's lives continue to unravel, no matter how much state support they get. But paying a family's rent is an expensive proposition.
"You need a lot of cash to help these families pay for housing because they're so poor and rents are still very high, and many need a year or more to find jobs," said Robyn Frost, director of the Massachusetts Coalition for the Homeless.
Obama's stimulus package includes a nine-fold immediate increase in an existing grant program that funds shelters. But instead of going to shelters, the funds are dedicated to either helping families hold onto their homes or subsidizing housing for those already homeless.
"The emphasis is on prevention, because helping people facing eviction or foreclosure stay in their homes and keeping kids in the schools they're enrolled in will save states money on health care and corrections in the long run," said Michael Stoops, director of the National Coalition for the Homeless.
Before the recession, 41 percent of the homeless population was families with children and most held jobs. About 25 percent - the most visible, chronically homeless - suffered from mental illness or drug addiction. "Now, because of foreclosures and layoffs, we're seeing middle class families - not just the working poor - in shelters," Stoops said.
In addition to shoring up homelessness prevention programs, advocates for the poor say Congress should have included money for low-income rental assistance, programs they say languished during the Bush administration. In economic downturns, rents often get cheaper, making it easier for states to support homeless families. But in this recession, fueled by millions of home foreclosures, the supply of housing has tightened forcing rents to go higher.
"In some parts of the country, rental costs are so high that even if people get their jobs back, they can't afford housing. There are literally millions of people that don't earn enough to afford what the market charges," said Barbara Sard, an analyst with low-income advocacy group the Center on Budget and Policy Priorities.
Although advocates for the poor urged Congress to include low-income rental assistance in the stimulus package, many members were concerned that any expansion of the $40 billion federal housing programs would be difficult to scale back after the stimulus period ended. So instead, states are negotiating with landlords for lower rates and many are trying to purchase and rehabilitate boarded-up homes for low-income families.
Advocates are hopeful that provisions in the stimulus package such as expanded unemployment benefits, Food Stamps and welfare will help alleviate the homeless crisis. "But until unemployment goes back down, we're going to be up against it. When that gets fixed, things will start getting better," said Steve Berg, director of the National Alliance.
The stimulus package includes two other programs that experts say could have a positive long-term effect on the supply of affordable housing: a $4 billion public housing fund for rehabilitating vacant apartments and a $4.2 billion neighborhood stabilization program to help communities purchase foreclosed properties.
But Berg cautioned that the current surge in homelessness will have lasting repercussions. A new study from The National Center on Family Homelessness, which found that one in 50 American children is homeless, said the disruption and isolation caused by homelessness affects kids the rest of their lives. Children experiencing homelessness have twice the rate of health and emotional problems compared to those with stable housing and they have significantly lower high school graduation rates, the report found.
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