The causes of homelessness are complicated, but looking at regional patterns sheds some light. In comparing different parts of the country, rates of homelessness do not appear to vary much with rates of poverty, substance abuse disorders or mental illness. The two key factors that correlate quite strongly with homelessness rates are rental vacancies and costs. It is the shortage of affordable housing that causes homelessness.
Psychological disorders and addiction are frequent among the general population, and most of them don’t become homeless. And most homeless people are not suffering from these ailments. Nearly half of the homeless individuals in the U.S. have jobs.
The rental vacancy rate in Anchorage is about half the national average. It has a per capita homelessness rate about 20 percent above the national average. There is a shortage of affordable housing here.
There are a number of reasons for this. Geographically, it is surrounded by water, mountains, a state park and a military base; the land for housing is limited. Large parts of the city are zoned only for single-family homes. And like many cities, there are regulatory approvals, including building codes, minimum lot sizes, height limits, setbacks, open space requirements, parking, environmental regulations and permitting lags.
But on a fundamental level, we rely on the private market to allocate goods and services in accordance with supply and demand. However, capitalism was never designed to supply housing to people with little or no income.
Personal vulnerabilities may determine who becomes homeless in a given situation. Circumstances of poverty, discrimination, health, education or employment can make households at risk for losing a home. An unfortunate event can suddenly spin into homelessness. The outcome, not the cause, can often be addiction or emotional instability, often followed by dehumanization by others. The longer it occurs, the harder it is to escape. There is a word for this: scarring.
The challenge, then, is to treat homelessness as a collective, rather than a personal, problem. Otherwise, we are addressing symptoms rather than the sources. But while it is not unreasonable to think that an affordable home should be a human right, like education or health care, the funds are not forthcoming.
In the 2025 budget reconciliation, the federal government reduced spending on homelessness by some $10 billion. The State of Alaska is financially strapped. The Municipality, along with nonprofits and businesses, are making strides in creating housing, but they too have limited resources, and there are still gaps. Subsidies and vouchers only work if the units are there.
Several years ago, Houston, Texas put together a coalition of federal, county and city governments, businesses and nonprofits, that created several thousand low-income housing units. They have one of the lowest homelessness rates in the country. On the other hand, in Seattle a tax on businesses to combat homelessness was repealed in 2018, backed by efforts from Amazon and Starbucks, and homelessness has skyrocketed. Policy matters.
Shelters, if available, can provide short-term lifesaving relief, but they can be unpleasant. They can be crowded, lack privacy, limit who you can be with, apply curfews, and regiment lifestyle. If they don’t move residents toward permanent housing, they are still homeless.
So it’s understandable that even though it’s a very tough life, some may decide that camping outside is the best thing for them. It is unfortunate that it has come down to this. These camps certainly create public safety and health risks. There is no easy answer for that one.
Personal responsibility, and accepting counseling and treatment when necessary, have a role. And inappropriate behavior should not be tolerated. But many of the homeless are casualties of societal choices made long ago regarding how our economic system determines who gets what. For this, they had no control.
Roger Marks is an economist in private practice in Anchorage. From 1983 to 2008, he was a senior economist with the Alaska Department of Revenue Tax Division.
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