In April 2020, we virtually convened over 600 funders from across California for a day dedicated to philanthropy's role in strengthening our democracy and civic engagement during this unprecedented moment. Now, SCG is excited to launch our Post-Policy Summit Blog Series to elevate critical learnings from the Summit and further the conversations we began to explore.
Half of all people experiencing unsheltered homelessness in the United States live in California. That is more than 108,000 people in our state. California is quickly approaching a breaking point in our affordable housing and homelessness crisis with such staggering numbers, especially as the COVID-19 pandemic continues to amplify inequities.
At the 2020 Philanthropy California Virtual Policy Summit, we invited a panel of experts to discuss California’s housing and homelessness crisis and how the COVID-19 pandemic exacerbates this crisis. Our panel included Andrea Iloulian, Senior Program Officer, Conrad N. Hilton Foundation; Elizabeth Kneebone, Research Director, Terner Center for Housing Innovation at UC Berkeley; and Jazmin Segura, Program Officer, Common Counsel Foundation. These leaders mapped the history of the housing and homelessness crisis in California, highlighted decades’ worth of data to illustrate trends and the scale of the current needs, shared learnings from community partners working on this crisis’s frontlines, and elevated key opportunities for philanthropy to take action.
Trends & Effects
Less Production, Higher Prices, Focus on Market-Driven Development
California has seen significant economic growth since 1980 as wages and jobs have increased in specific sectors across the state. Simultaneously, government and housing developers slowed production considerably, stepping out of pace and driving up demand. Additionally, when California did see some growth in housing supply over the past few years, the houses built by developers tended to be larger, single-family homes, which are generally more expensive. Over the decades, this focus on market driven-development has resulted in the overproduction of luxury housing and has failed to increase the production and availability of affordable housing. In 2018, in the San Francisco Silicon Valley area, an entry-level home’s typical price was over $760,000. In Los Angeles, the standard entry price was approaching half a million dollars, putting homeownership out of reach for more and more households across California.
The Rental Market Must Absorb People Priced Out of Homeownership
The less attainable homeownership becomes, the more pressure there is on the rental market to absorb people who cannot afford to buy homes. In recent years, the fastest-growing segment of the rental market are households making over $100,000. As higher-income households have relied more heavily on rental stock in recent years, there has been a tremendous increase in rents. In short, California is not pursuing enough affordable housing production. It is also not protecting stock that was once affordable to lower- and moderate-income households, which has created a mismatch between supply and demand. Today, the average asking rent for a two-bedroom house in California frequently outstrips what the typical renter’s income could afford without becoming cost-burdened.
Low-Wage Work Does Not Match the Cost of Rent
It is becoming increasingly difficult for people living on extremely low incomes to pay rent. These households are the most vulnerable and put at the highest risk of becoming homeless because of the lack of economic opportunity to earn higher wages and wealth for their households. Rent and the cost of healthcare and basic needs take up most of these households’ monthly income. Nearly 90% of households living on low incomes pay at least a third of their income to rent — almost 75% of them paying more than half of their total income. California has almost 1.3 million extremely low-income renter households and only 31 affordable homes for every 100 of these households. In total, California has a housing shortfall of 998,613 homes for people living on extremely low incomes.
The Housing-Income Gap and the Rise of Homelessness
While California has seen wage growth and better economic performance in several regions, many of these gains happened at the top end of the income distribution. The wages of extremely low-income households have stagnated as price pressures, and rental costs have increased. This housing and income gap is the underpinning of the homelessness crisis in California. Between 2017-2019, almost every county in California has experienced an increase in homelessness. During this period, Los Angeles saw a 7% increase in homelessness, San Francisco saw a 17% increase, and Alameda, Contra Costa, Orange, and San Bernardino County saw a 40% increase.
Disparities in Homelessness
Mental health and addiction issues are often considered the primary drivers of homelessness. However, the magnitude of this crisis underscores how much homelessness is an economically-driven crisis. Disparities are omnipresent in the housing system. We can see this in the housing stock’s affordability to where we have built affordable housing to long-standing economic and racial segregation* and discrimination in the financial sector, real estate, and government programs related to homeownership. These challenges disproportionately impact people of color. The homelessness crisis is also increasingly affecting seniors and people over 55, many of whom are experiencing homelessness for the first time.
Populations with Increase Housing Insecurity
Many households, which may not have been housing insecure before COVID-19, are now vulnerable because of the pandemic’s economic fallout. About 1.2 million households, who were not at risk before, are now at risk of losing jobs and wages because of the economic impacts and responses to COVID-19. As the stay-at-home order continues and the moratorium on evictions end, these households will become increasingly at risk of losing their housing and for those homes and rental properties that may have been affordable to go back into the housing market.
Exposure to COVID-19
The COVID-19 crisis is having tremendous health impacts for people that are living without shelter. People experiencing homelessness are more likely to be exposed to COVID-19 than other populations and are also more likely to have underlying health conditions. This issue is especially urgent for the older populations that are homeless. Additionally, frontline workers and providers are often at higher risk of exposure to COVID-19. Many of these essential workers, who staff grocery stores and delivery services, are not paid living wages and often live in households with many, which could cause rapid exposure to the virus.
Opportunities for Action
Ensure the Resilience of Community Organizations
Community partners working to address the housing and homelessness crisis are stretched very thin as they urgently work to respond to increasing safety-net needs on top of their day-to-day organizing, civic engagement, and advocacy work. In particular, this pressure affects organizations working with the most impacted communities, such as the reentry population and undocumented immigrants. Philanthropy must increase flexibility in all grantmaking practices to support current efforts by reducing or eliminating reporting, streamlining applications, increasing funding to match the need, and making all grants general operating support. Community-based organizations continue to respond to emerging needs while re-strategizing and pivot on a daily or weekly basis. Philanthropy has an immediate opportunity to meet the moment.
Support Coalitions and Networks That Demand Immediate Protection for Tenants and Communities That Are Unhoused
In Los Angeles, there’s currently a coalition of over 250 organizations and small businesses working with the City Council and the County Board of Supervisors to move forward on renter protections and moratoriums on evictions. In the Bay Area, groups are demanding that unhoused communities get placed into empty hotels and moratoriums on sweep encampments. This robust urban mobilization is also beginning to emerge in areas where tenant protections were once considered invisible by local government officials such as Fresno, Tulane, Murcia, or Riverside. A diverse coalition of stakeholders from many sectors is coming together to articulate the need for affordable homes and set bold but achievable goals on a statewide scale. Housing California and the California Housing Partnership have teamed up on California’s Roadmap HOME 2030, an initiative to develop a "Marshall Plan" that will set the course to advance policy solutions that shift funds and create structural and systems reform at scale. As this momentum continues to build, philanthropy can play a critical role in facilitating these connections and ensuring that local governments move forward with these protections for renters and unhoused communities. These efforts underpin housing as a human right rather than a commodity.
Support Data Integration Efforts To Identify Populations Put At High-risk
Philanthropy can support data integrity efforts to create quantitative measures to identify people at a high risk of becoming homeless. Currently, there is a lack of data integration across the housing continuum and jurisdictional boundaries. Insufficient coordination and data access reduce an organization's ability to use predictive analytics to identify individuals at high risk and accurately funnel preventive service dollars. Last year, the state legislature passed a resolution that allows County entities to share data around groups that are at high risk. The challenge moving forward will be finding a platform that can successfully integrate cross-jurisdictional data systems and ensure that privacy is protected. Philanthropy can help explore what this tool or system looks like to connect jurisdictions across the state and share data more fluidly. This integrative platform also has the potential to help regions share institutional capacity and help collaboratively use funds.
**This article is a snapshot of our speakers’ high-level conversation on California’s housing and homelessness crisis. It should be considered an introduction to our state’s history of racial disparities and systemic inequities. SCG encourages you to continue learning about the racial policies and history that serve as the root causes of these housing and homelessness trends.