Homelessness remains a global challenge in many cities, and it could be ironic how some cities are investing in smart technologies, when a most basic need of its citizens – a shelter over their heads – is not always available even in many first-world countries. On our recent mission to the US, we noticed how the common narrative blaming homelessness on technology giants for inflating real estate prices, may not portray the full picture.
Sleepless in Seattle
Homelessness in the United States has been a constant and serious crisis. In the whole of the United States, point-in-time counts by the Department of Housing and Urban Development have reported 554,000 living on streets or temporary housing. New York, San Francisco, Los Angeles, Seattle, and Las Vegas are US cities experiencing considerable growth in homelessness. Seattle’s 10,000-strong homeless population has led to several “tent cities”. Homelessness in San Francisco increased by 30 percent since 2017, and point-in-time counts report 9,784 people living on the streets, in motorhomes, or shelters. Amidst the ivory towers of technology companies such as Google and Facebook, people are pushing their trolley cart of belongings and panhandling on the streets. By understanding how to blend the use of technology with policy making, we are able to get more people off the streets and into their own homes.
Complex root causes
Homelessness arises from various reasons. A study by Multiple Exclusion Homelessness Research Program identified childhood trauma as one of the root causes of homelessness. Events such as domestic violence, abuse, and witnessing alcoholism contribute to an individual’s development of self-esteem and ability to form meaningful relationships. This may manifest into problems with alcohol and drugs in their adulthood, inability to maintain a job, lack of drive in their career, and is eventually associated with homelessness. Single male homeless people most often fall under this category.
The other more common cause of rising homelessness in the United States is the housing crisis. A contributing factor is the low relative growth in wages. Since 1960, renters’ median earnings have increased by only five percent, while rents have hiked up 61 percent. What is even more devastating is that a Harvard study found that fastest rise in home prices occurred in the low-end market. Cheap homes, which sell at less than 75 percent of the median price, have been appreciating at twice the rate of higher-end homes.
With low wage growth and a dwindling supply of affordable homes, it is no surprise that homelessness has become a serious issue that city officials need to contend with. There are many families with children that are affected by the inability to afford renting or living in the cities, and many of them require rapid re-housing to get out of homelessness. Creating affordable housing is costly, yet the homeless are a disenfranchised community that does not offer enough voting power to justify the issue as a political platform. Policymakers therefore need to take a total cost perspective to address homelessness, to include the costs of crime, health, and even the foregone earnings of the next generation.
The Treatment First vs. Housing First conundrum
Before 1992, the most common method of tackling homelessness was the Treatment First method. This involves first attending to mental health or addiction issues, before “rewarding” rehabilitated individuals with affordable housing. In the meantime, those seeking treatment may be housed temporarily in shelters, where they may themselves feel disrespected or even physically threatened by fellow residents.
The other method of tackling homelessness is the Housing First approach. Adopted by the George W. Bush administration in 2005, it helped to reduce homelessness by 30 percent. It was continued in the Obama administration, and led to 87,000 fewer homeless people. Housing First focuses on providing housing to the homeless upfront, unconditionally. Services to help mental health issues, addiction, savings, to acquire new skills, or prepare for jobs are optional, and not prerequisites to obtaining housing under the Housing First method.
The effectiveness of Treatment First has been in question. A joint research by New York University and Pathways to Housing showed that 225 participants with mental illness were randomly placed, under Housing First and Treatment First conditions. Over a two-year period, those under Housing First spent 80 percent of the time stably-housed, while those under Treatment First spent only 30 percent of the time stably-housed.
How Smart Technologies can help
Housing First has often been touted as a panacea to homelessness. A closer examination reveals cracks in this approach.
“Pay as you are able to” system
Under the Housing First approach, housing is made affordable as rent and utilities is capped at 30 percent of tenant incomes. Tenants who do not yet hold a job are able to negotiate with landlords for a grace period, to allow them to regroup and find employment, before having to service their rent. As such a system limits the number of landlords who are willing to participate in renting their homes out to the homeless, government grants and financial aid is required to ensure long-term programme viability. A Flexible Rent Subsidy Pilot program by the Policy Lab in Washington D.C., for example, provides subsidies to help low-income families maintain housing when they undergo short-term income fluctuations. Governments could provide similar subsidies and grants for those under the Housing First approach, to help citizens tide through a few months of unemployment, or seek help for personal issues. A map-based property app called Lease Up allows landlords to upload listings of affordable housing, allowing caseworkers to search for these homes and subsequently rehome the homeless more efficiently. Lease Up allows caseworkers to filter the homes based on bedroom size and even type of subsidy available, which makes it easier to find schemes that allow tenants to afford their rent based on their individual situation.
Cost of building homes
As it turns out, it is more cost-effective to provide a free home to a homeless person, than let him rove from shelter to shelter. In Santa Clara County for example, it costs $83,000 to provide annual services and shelter for a homeless person. In contrast, building costs to construct a small house for a homeless person costs between $15,000 to $25,000. Although building homes costs less than providing shelter services, technology is able to help us further reduce costs, allowing more homes to aid more people. A San Francisco non-profit, New Story, has partnered with construction company ICON of Austin, Texas to build 3D-printed homes. These cost as low as $4,000, and each 3D-printed house can be built within a single day. The printer works by applying concrete, layer by layer, until the walls are up, and roofs and windows are added using conventional methods.If popularized, 3D-printing technology promises to increase the supply of affordable housing quickly and affordably. Furthermore, jobs can be created by training homeless people to operate the printer, take ownership of their new homes, and empower them to give back to their community.
As Housing First is an unconditional model, there may be worries that people use their wages, welfare funds or donations to spend on vices such as drugs and alcohol to fuel their addictions. One possible use of technology to combat this issue is the N=5 contactless payment jacket. N=5 is a start-up from Amsterdam that created the Helping Heart jacket which takes contactless donations of maximum one Euro. These donations cannot be withdrawn as cash and can only be used at partner businesses that provide food and shelter.
A similar idea can be used for the Housing First approach, where tenants receive welfare, wages, or even donations, with funds designated to various needs except drugs and alcohol. The system can nudge the formation of new saving habits, and also connect to the landlord’s bank account to automatically deduct rental expenses, offering ease of mind for all parties.
Towards an integrated approach
Homelessness is a large and growing issue that needs to register on the agenda of city, business, and community leaders. As every homeless individual’s situation is different, the care and attention required for each case differs. Firstly, a robust ecosystem and policy framework is vital to close the gaps of any one-size-fits-all solution. Although the use of Housing First promises to be more effective than its predecessor, Treatment First, technology interventions need to be designed in sync with the true concerns and dignity of those they aim to help. Smart technology players have a role to offer solutions to reduce frictions, allay donor and policymaker concerns, encourage positive behavioral change, reduce costs, and scale up efforts in a renewed war against homelessness.