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Learn why homelessness remains a crisis in Ohio and nationwide, as well as the steps we can tackle to tackle this issue.
America’s current homelessness crisis is a “perfect storm” of economic trends, budget cuts, historic events, and policy choices made over the past 50 years. The roots of America’s modern homelessness crisis date back many decades. Some of the early causes include: the mass closing of psychiatric hospitals, the shift from manufacturing to a low-wage service economy, urban “renewal” in cities that drove out poorer residents, and cuts to federal housing assistance programs.
Watch the short video on factors that lead to homelessness and read about the history of America's modern homelessness crisis below.
The roots of America’s modern homelessness crisis date back many decades. Some of the early causes include: the mass closing of psychiatric hospitals, the shift from manufacturing to a low-wage service economy, urban “renewal” in cities that drove out poorer residents, and cuts to federal housing assistance programs.
In the 1960s and 1970s, laws were passed that ended the practice of holding institutionalized mental health patients against their will. Policymakers hoped that local agencies would help psychiatric patients transition from institutions to the community, but they failed to adequately fund community-based services. As a result, many with severe mental health needs wound up with no place to live.
By the 1980s, the U.S. economy was rapidly shedding manufacturing jobs as major employers moved their factory operations to foreign countries where labor costs were much lower. Workers without a college diploma had to settle for much lower paid service jobs that rarely offer benefits or even a fixed schedule.
Changes in the economy coincided with massive cuts to public housing and other public assistance programs during the Reagan administration. Appropriations for the U.S. Department of Housing and Urban Development were slashed by nearly 80%, from $32 billion in 1981 to only $7 billion in 1989, resulting in hundreds of thousands of American households losing access to stable, affordable housing.
The Anti-Drug Abuse Act of 1986 created mandatory prison sentences that penalized the use of crack cocaine much more harshly than powder cocaine, exacerbating long-standing racial disparities in access to housing. The so-called “War on Drugs” caused a massive increase in the nation’s prison population, contributed to rising homelessness because people exiting incarceration find it very difficult to find employment and housing.
Real wars also played a role in the homelessness crisis that exploded during the 1980s, as thousands of veterans had returned from Vietnam with severe Post-Traumatic Stress Disorder and other untreated health conditions. In subsequent decades, wars in Iraq and Afghanistan further added to the growing number of veterans dealing with disabilities and trauma while living on the land.
Meanwhile, municipalities had largely banned single-room occupancy units, which had long been low-cost, last resort housing for many low-income single adults. Local governments also implemented zoning laws that severely restrict apartment construction. As developers increasingly focused on building larger, more expensive single-family homes in the suburbs, disinvestment in the rental market led to fewer, deteriorating units available for an increasing number of low-wage service workers.
By the early 2000s homelessness continued to increase despite the passage of federal funding for homeless services. Most emergency shelters and transitional housing programs were following the “stairstep” service model that required people to meet strict requirements for sobriety, religious observance, and/or employment before they could be eligible for permanent housing.
The “housing first” model emerged as a more effective alternative to programs that make assistance contingent on compliance with strict rules. The housing first approach recognizes that people are more likely to overcome homelessness when they have a safe, stable place to live with ready access to mental health, addiction, employment services and case management.
As the housing first approach was gaining acceptance, the foreclosure crisis and Great Recession of 2008 drove millions of Americans out of their jobs and homes. Former homeowners flooded the rental market, increasing demand for a dwindling supply of apartments. This pushed rents ever higher while wages stagnated, especially for the most common unskilled jobs.
in 2020, the outbreak of the Covid-19 pandemic suddenly forced shelters to drastically reduce their capacity and implement social distancing measures to slow the spread of the virus. With businesses shut down and millions of Americans out of work, Congress authorized funding to expand shelter services and created an emergency rental assistance program help vulnerable tenants pay their rent to remain stably housed.
However, the pandemic’s impact on the economy soon led to widespread inflation, including a major spike in housing costs. From January 2020 to 2025, the median rent for a two-bedroom apartment in Ohio increased 28%. And while lower-income workers saw their first real wage increases in decades, these gains were overwhelmed by inflation.
By 2025, renters in Ohio needed to earn more than $22 per hour to afford a basic two-bedroom unit, considerably more than what many of the most common jobs actually pay. The gap between low wages and high rents explains why over a million Ohioans are now paying more than half their household income on housing, which puts them at constant risk of eviction and homelessness.
The pandemic also had a lasting impact on the homeless population. Rising rents and expiring pandemic assistance have led to an increase in homelessness. However, it often appears to be rising even faster because more people are sleeping in tents, cars, and other locations. This highly visible “unsheltered” population has increased faster than the "sheltered" population. Nonetheless, the vast majority of Ohio’s total homeless population live in shelters and transitional housing.
America’s current homelessness crisis is the result of decades of policy choices, economic trends, and historic events. The goal of ending homelessness can seem daunting, but the solution is simple: we need more affordable housing and services to prevent homelessness and help those who are already unhoused get permanent homes. This requires a significant investment, but will decrease government spending in other areas: homeless shelters, hospitals, jails, courts, schools, and child welfare.
