A new study finds a strong correlation between a lack of affordable housing and high rates of homelessness in America’s largest metropolitan areas — with California having the most extreme examples.
Home Bay, an online brokerage with a history of real estate research, found that California’s six largest metros have homeless rates 2.3 times higher than the national average and home values nearly 3 times the national average.
San Jose, San Francisco, Los Angeles and Sacramento ranked first through fourth in the nation in the combination of expensive real estate and a high rate of homelessness, with San Diego at seventh place.
“High prices are an indicator of high demand, and high demand comes from scarcity, such as a low supply of affordable housing,” according to the study.
San Jose was cited as as a particularly extreme case, with the country’s highest rate of homelessness — 637 per 100,000 residents — and highest typical home value at $1.39 million.
The study’s authors said that while substance use and mental health are often cited as the causes of homelessness, the cost of housing may be more significant.
The 15 metro areas with the lowest rates of homelessness are all in the eastern half of the country. Cleveland and Pittsburgh came in at the bottom of the list with low home values and low homelessness.
“In light of the evidence, it’s clear that unaffordable housing prices are a key cause of homelessness across the U.S.,” the study concluded.
The study analyzed the 50 most-populous U.S. metros to determine the connection between home values and homelessness rates. Home values came from the Zillow Home Value Index, and homelessness rates come from U.S. Department of Housing and Urban Development.