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Causes of Homelessness

Although the causes of homelessness are many, economic hardship and lack of affordable housing are the two leading causes of homelessness. According to the 2020 Greater Los Angeles Homeless Count report by the Los Angeles Homeless Services Authority (LAHSA), two-thirds of unsheltered adults experiencing homelessness were homeless for the first time. Of these individuals, 59% cited economic hardship as the cause of their homelessness. The 2020 Point in Time Count results for the San Gabriel Valley Service Planning Area (SPA-3) revealed that local unsheltered people were experiencing one or more of the following conditions: having a chronic illness, substance abuse disorder, serious mental health issue, and/or suffering from domestic violence. Having one or a combination of these conditions can cause impediments to maintaining gainful employment.

Leading Cause of Homelessness

More people are falling into homelessness than out of homelessness as a growing gap between income and affordable housing availability drives inflows to homelessness. Wages have not kept pace with growing rent, resulting in a cascading effect impacting the housing market. As the price of homes rise in California, so does the barrier to entry to homeownership for many. These households or individuals drive up rental market demand by renting units that middle-income households used to rent. Middle-income households start renting units that low-income households used to rent and low-income households are ultimately priced out. With the increased demand on the rental market, development has boosted supply for pricier units, leaving less stock for low-income rentals.


A Rising Gap: Income and Affordable Housing

The rising gap between income and affordable housing is a leading cause of homelessness. According to the California Housing Partnership’s 2020 report, renters in LA County need to earn $41.96 per hour (2.8 times LA’s minimum wage) to afford the average asking rent of $2,182.
WAGES-CA Housing Partnership.png

In the San Gabriel Valley, the median price of a single-family home is $761,941 in 2019. The current median price in Los Angeles County follows closely around $800,000. With this barrier to entry to homeownership for many middle and higher-income households, they have resorted to renting instead. This displaces middle-income households to rent lower-income units, which leaves low-income households unable to afford the cost of living and rising rent, especially in a gentrifying neighborhood. After paying rent and utilities, 75% of low-income and extremely low-income households have less than half of their income remaining to pay for necessities such as food, healthcare, transportation, and childcare, let alone building wealth. There is much less affordable rental housing available to extremely low-income renters due to the demand for higher-priced developments.

According to LAHSA, when the median rent in a region exceeds 22% of the median area income, homelessness begins to rise. When the median rent exceeds 32% more than the area median income, homelessness increased sharply. In Los Angeles, the median rent is 46.7% or nearly half of the median income. The California Housing Partnership reports that Los Angeles County would need 509,000 units of affordable housing to meet current demand.

CA Housing Trust Report- Shortfall Chart

 

Intersection: Homelessness, Mental Illness, and Substance Abuse

The link between mental illness and homelessness is undeniable. In LAHSA’s 2020 Homeless Count, between 25-27% of individuals experiencing homelessness reported having a mental illness and/or drug addiction. In the San Gabriel Valley Service Area (excluding Pasadena), the 2020 PIT count results showed 4,555 homeless individuals with the majority fitting the following description: adult (25+), male (including transgender), not in a family unit, and either Hispanic/Latino, Caucasian, or African American. The majority demographic indicated having a serious mental illness and/or substance use disorder.

According to a comparative study published in the Journal of Social Psychiatry and Psychiatric Epidemiology, among mentally ill homeless individuals, those who became homeless prior to becoming mentally ill have experienced the highest levels of disadvantage and disruption, while those who become homeless after becoming ill have an especially high prevalence of alcohol dependence. It is no surprise that individuals use drugs and alcohol to cope with the stress of survival. Individuals experiencing homelessness generally have a history of poverty and social disadvantage, including considerable poverty in childhood and lower levels of education, along with an increased likelihood of being a person of color. Many appear to have experienced both poverty in addition to childhood family instability and/or violence. According to psychiatrist Bessel van der Kolk’s research, The Body Keeps the Score: Brain, Mind, and Body in the Healing of Trauma:

  • 1 in 8 Americans witnessed their mother being beaten or hit
  • 1 in 5 Americans was sexually molested as a child
  • 1 in 4 Americans was beaten by a parent as a child, to the point of a mark being left on their body
  • 1 in 4 Americans grew up with alcoholic relatives
  • 1 in 3 American couples engage in physical violence
Stigma and discrimination are continuously perpetrated against homeless individuals with mental health conditions. People experiencing homelessness who also have a mental illness are highly vulnerable to violence, with a reported lifetime incidence of 74% to 87% of violence being perpetrated against them. Psychiatric care may include taking prescribed medicine that affects alertness, which may pose a danger for someone needing to be aware of their surroundings living in the streets.

Many individuals and families lack the social and financial safety net to support them during major upheavals in life. The lasting trauma of prolonged neglect, violence, sexual and/or emotional abuse, can and often do result in suicidal ideation, major depression, anxiety disorder, schizophrenia, and other serious psychiatric disorders. Further, folks with developmental disorders or severe mental illness whose guardians passed away may not have sufficient means to live independently. Trauma leaves its mark on a person through physical changes in neuropathways, as supported by numerous studies in neuroscience and psychiatry. Compounded by social stigma and lack of affordable and accessible mental healthcare, these individuals are left vulnerable to homelessness.

The Never-Ending Loop: Homelessness, Psychiatric Disorder, and Mortality
Pathways to Homelessness Among the Mentally Ill

Roy L, Crocker AG, Nicholls TL, et al. Criminal behavior and victimization among homeless individuals with severe mental illness: a systematic review. Psychiatr Serv. 2014;65:739-750.

Case Study: Who Receives Services at Arcadia’s Homeless Resource Hub

For many people, let alone those who are on the brink of homelessness, catastrophic socio-economic events like the 2008 market crash and the COVID-19 pandemic will have driven up inflows into homelessness. During the pandemic in 2020, Union Station Homeless Services reported:

  • 1 in 10 individuals in owner-occupied households have fallen behind on mortgage
  • Realtors project 60,000 foreclosures could occur in the state in 2021
  • 1 in 6 tenants have fallen behind on rent
  • 80% of tenants at risk of eviction are people of color

During a visit to the Homeless Resource Hub on July 1, 2021, staff interviewed several individuals who were present for service. One middle-aged woman was born at Methodist Hospital and grew up in Arcadia. Prior to becoming homeless, she lived in Arcadia and was evicted during the pandemic, having previously worked as an in-home caregiver before she lost her job in August 2020. She now lives in her car with her two cats and has no surviving family members as she is an only child. When asked what she wished most for herself, she said she wanted to regain financial independence, live in a stable home environment with her pets, while being gainfully employed. Currently, she needs money for gas and expressed frustration at being unable to get a job because she lives out of her car.

Others present were mainly male, ranging in age from adult to elderly, and some were disabled and in wheelchairs. Of those willing to share, some mentioned they are not homeless but have unstable home situations and need services offered by the Homeless Resource Hub such as laundry, meals, etc. When asked, “what do you wish for yourself?” one man in his 80’s in a wheelchair responded that he wishes his friends at the Hub can have a place to live. A young man in his 30’s said he used to work in the restaurant industry but the pay was low and not enough to live on, the hours were long, and he lacked the credentials to do anything else. In speaking with these individuals, staff noticed that upon asking the first question, “where are you from, have you ever lived in Arcadia?” those who declined to interview further turned away and looked hurt or insulted by the question. While being interviewed, some individuals used a defensive tone and commented that they “know [we] aren’t wanted here”. Some are from neighboring cities and a few are from other counties in the region.

The City requested additional demographic data specific to Arcadia from Union Station Homeless Services; however, as a matter of current practice, the organization does not specify the number of Arcadia residents experiencing homelessness. Case managers for the organization stated they do not collect this information as it impedes service delivery. 

Homeless Housing and Property Values 

The existing research on whether the proximity of homeless housing impacts property values is inconclusive. First, there are two types of homeless housing most studied in published research: supportive housing and emergency shelter. Supportive housing is long-term or permanent housing for which the tenant must sign a lease and pay a low percentage of their income and receive on-site support services provided by a care team of professionals. Emergency shelters are short-term housing or beds available up to 6 months with minimal supportive services. However, different housing programs have different elements that may be a combination of the two. Below is a comparison of several studies:

A 2008 study conducted by NYU’s Furman Center for Real Estate & Urban Policy found that supportive housing in New York City did not have a negative impact on nearby property values. The study proposed the theory that supportive housing developments can either increase or decrease property values. In such cases where an attractive, well-maintained supportive housing development replaced an existing vacant lot or unattractive property, surrounding property values experienced a statistically significant increase after construction. Likewise, property values decreased in areas with prevalent and visible homelessness; when supportive housing is made available and reduced visible homelessness, an increase in property value was the outcome.  

Conversely, a 2019 study conducted by NYC’s Independent Budget Office found that a property situated 500 feet of a congregate shelter (shelter with shared bathroom and/or bedroom facilities) for adults sold for an estimated 7.1% less than a similar residence sold at a comparable time located 500 to 1,000 feet from a shelter for adults. The difference between this study and the Furman study is the NYC IBO’s lack of information on when each facility began operation, which prevented comparison of residential sale prices before and after the opening of nearby shelters, which was the methodology used in the Furman study. Methodologies and housing program elements varied in these studies, yielding conflicting results in different reports.  

A 2012 study conducted by the Delaware State Housing Authority and Econsult Corporation found that there was no statistically significant impact on future home values or appreciation trends. In Delaware, the historical direction of causality appears to be that facility sites followed lower home prices, rather than lower home prices following facility sites. There is no single answer for whether the presence of a particular supportive housing site has an adverse effect on nearby property values. Further, whether the effects are negative, positive, or neutral are heavily dependent upon the design, scale and type of assisted housing, age and density of the surrounding housing, quality of the assisted housing’s management, and the socioeconomic and demographic context of the neighborhood.   

Furman Center Study 
NYC Independent Budget Office Study
Delaware Housing Coalition Study

Myths v. Facts on Homelessness

Mental illness and drug addiction are the root causes of homelessness.
Economic hardship is the leading cause of homelessness. Between 25% and 27% of individuals experiencing homelessness cited as having either or both mental illness and substance abuse disorder in the 2020 Greater Los Angeles Homeless Count, while 59% of newly homeless individuals cited economic hardship as the cause of falling into homelessness.

Homeless people need to get jobs, then they can afford housing.
Many people experiencing homelessness worked full-time or numerous part-time jobs and still did not earn enough to afford housing in Los Angeles County. A recent study by the California Policy Lab reported that 74% of 136,726 individuals sampled who experienced homelessness were employed prior to enrolling in homeless service support. The year prior to falling into homelessness, the average annual income was $9,970. Over 60% of those employed prior to enrolling into homeless services worked in just four industries: (1) 28% in administrative support, waste management, and remediation services; (2) 14% in healthcare and social assistance; (3) 12% in accommodation and food services; (4) 11% in retail trade.

Why are some individuals experiencing homelessness unwilling to go to shelters?
There are both well-run and poorly run shelters. Often times at intake, an individual is assigned to a shelter that they may or may not be familiar with. Whereas, in the streets, some have friends and feel safe within a familiar area. In shelters, people are assigned to be with strangers and some shelters have curfew and rules that certain individuals are unable to abide by. For example, there are individuals who are only able to work graveyard shifts and that would prevent them from living at a shelter with a curfew. Lastly, it's important to understand that an adult who is chronically homeless has likely survived on their own for many years. They may like their autonomy, but lack self-confidence in their own potential and fear the unknown (new shelter environment) more than the known (streets). Finally, seeking shelter for a person means both acknowledging that they need help, in addition to believing enough in both the shelter system and in themselves to help improve their life for the better.

Additional Resources

LAHSA 2020 Greater Los Angeles County Homeless Count Presentation
California Policy Lab Brief: Employment and Earnings Among LA County Residents
Myths & Facts About Homelessness in Los Angeles
Why would a homeless person not want to go to a shelter? 

Published: August 04, 2021