Investments in this strategy aim to reduce homelessness by increasing affordable units available, integrating links to social services like employment training and healthcare, and improving rental protections to reduce risk of eviction. The sections below include an overview of the strategy for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.


Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What problem does the investment aim to address? For the target stakeholders experiencing the problem, how important is this change?

Homelessness persists in all developed nations at various levels. Experts broadly define three types of homelessness: temporary homelessness due to an event like a natural disaster or eviction; episodic homelessness, with individuals or families frequently transitioning in and out of homelessness due to financial constraints or mental illness; and chronic homelessness, often due to mental health or substance abuse challenges. Homelessness has proven and significant impacts on the mental and physical health of individuals who experience it (9). Because of the public cost of temporary housing, homelessness also has economic impacts on governments as well as individuals and communities (9). Some studies have found that the costs to the public of a homeless person can exceed by as many as five times the costs of a person in subsidized affordable housing, and high rates of homelessness can lead to challenges in childhood development, educational outcomes, community resilience, and violent crime (13, 14). For any individual who cannot access stable housing, the outcomes associated with this investment strategy are likely essential (10). Investments can reduce homelessness by:

1. increasing the number of new and rehabilitated affordable housing units to help meet high housing demand by both homeless people andlow-to-moderate income individuals (who are especially at risk of homelessness) (11);
2. increasing availability of social services, like employment training, financial literacy, or access to public transportation, to help beneficiaries find and retain steady work, reducing the risk of homelessness (16);
3. improving renter protections or rental pricing to reduce the risk of eviction, which can compound childhood development problems or health-related, educational, and emotional instability (16); and
4. through a combination of the above factors, contributing to better mental and physical heath for homeless individuals, reducing government spending, improving educational and employment outcomes, improving community health, and strengthening the local economy. 

What is the scale of the problem?

The most recent global housing-focused survey estimated a worldwide homeless population of 100 million, with up to 1.6 billion people occupying inadequate housing (12). Although most affordable housing units are constructed with the intention of serving lower-income communities, projects that do not offer resident services or subsidies remain out of reach for many extremely low-income homeless families. Investors wishing to combat homelessness can focus on projects that are committed to serving families below 30% AMI in areas that have unusually high levels of homelessness.


Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who (people, planet, or both) is helped through investments aligned with this Strategic Goal?

While no demographic is immune to the risk of homelessness, structural and systemic problems like lack of affordable housing, high unemployment, and poverty make certain populations more susceptible to homelessness. The following populations are often especially susceptible:

Individuals Fighting Substance Abuse: People living with addictive disorders, like drug and alcohol addiction, are often disproportionately susceptible to homelessness. Addiction often leads to economic stress, job loss, or disruption of support networks. Roughly two-thirds of homeless people report that drugs and/or alcohol were a major cause of their homelessness, and 68% of U.S. mayors found that addiction was the greatest cause of homelessness for single adults (1). In many cases, homelessness exacerbates these disorders, and lack of access to supportive services and healthcare often accompanies homelessness, making treatment all the more challenging (2).

Individuals Suffering from Severe Mental Illness: Often cited among the top three causes of homelessness, severe mental illness can disrupt a person’s capacity for everyday tasks and prevent individuals from forming meaningful relationships. As a result, those with severe mental illness often have less of a social safety net. Roughly 20–25% of the homeless population in the U.S. suffer from severe mental illness, and in a survey of the U.K.‘s homeless population found that up to 80% of homeless individuals reported a mental health issue (45% reported having been diagnosed as such) (3, 20).

Individuals with Physical Disabilities: Persons with physical disabilities, especially those with limited support networks, are highly susceptible to homelessness because of limited opportunities for employment, challenges in finding appropriate housing, and difficulty of everyday tasks (4). In Australia, for example, individuals with disabilities comprise 18% of the total population but 25% of the homeless population (5).

Veterans: In some developed-market countries, veterans are likely more susceptible to homelessness. In the U.S., veterans comprise 9% of the homeless population, compared to only about 6.8% of the total population (6). Veteran homelessness can often be attributed to differentially higher rates of severe mental health disorders, such as Post-Traumatic Stress Disorder (PTSD), depression, or anxiety. Veterans are also more likely to experience substance abuse, have lower socioeconomic status, or have trouble finding permanent employment (6).

Victims of Domestic Abuse: A significant proportion of homeless people have experienced domestic abuse in their lifetimes. Abuse is often cited as the primary source of family homelessness (7). Nearly 65% of homeless women in the U.S. report having been abused in adulthood. Domestic violence survivors often lack the resources to support themselves and their families, and can be forced to live on the street, in cars, in extremely crowded environments, or in emergency housing—or return to abusive households. In most cases, women leaving abusive situations leave with children (see also: Fewer Individuals Living in Abusive Homes) (7).

What are the geographic attributes of those who are affected?

In most developed-market countries, homeless populations live in urban or peri-urban areas. In the United States, between 4% and 7% of homeless people (compared to about 15% for the total population) live in rural areas (8).


Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

How can investments in line with this Strategic Goal contribute to outcomes, and are these investments’ effects likely better, worse, or neutral than what would happen otherwise

The extent to which this strategy can reduce homelessness depends on the nature of the project and the housing brought to market. Housing accessibility requires units that are physically, financially, and intellectually accessible to their intended beneficiaries. For formerly homeless populations, affordable housing, to be successful, must be combined with supportive services, job training, and physical/mental healthcare. Projects that do not specifically target very-low-income or vulnerable populations risk having little impact on the problem. Affordable housing projects that target these populations, by putting in place the policies and service connections, will likely be better for the beneficiaries they reach.

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many target stakeholders can experience the outcome through investments aligned with this Strategic Goal?

The number of individuals who can receive outcomes through this strategy depends on the number of homeless individuals. While rates of homelessness vary significantly across and within developed markets, many areas hover around 100 homeless persons per 10,000 (for Australia, this number is around 105 per 10,000, for the U.S. it is roughly 111, and for Germany, it is around 35) (12).

How much change can target stakeholders experience through investments aligned with this Strategic Goal?

The amount of change that beneficiaries can receive through this strategy depends on the housing itself and the extent to which it successfully provides sustainable housing for homeless individuals.

  • Repeatedly, studies over the past two decades have demonstrated that homeless families who are discharged from shelters into subsidized housing are more stable, live in higher-quality and safer environments, and are less likely to return to shelters than families without a housing subsidy (17, 18, 19).
  • Access to housing court mediation and legal services in Hennepin County, Minnesota, led to settlement without eviction in 69% of cases filed against families in housing court, and those families retained housing (3).
  • Compared to children of similar, waitlisted families, a study found that children of families living in subsidized housing had a 35% greater chance of classification as a well child, 28% lower risk of serious underweight, and 19% lower risk of food insecurity (10).

Illustrative Investment

Alpha Project’s Permanent Supportive Housing Program was built explicitly to house homeless and very-low-income people in downtown San Diego. Residents have access to on-site support services, such as mental health and addiction counseling, transportation assistance, clothing and hygiene supplies, and employment readiness training. Communities that invest in such permanent supportive housing projects have shown steeper declines in chronic homelessness over time (15).

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

State of the Homeless 2017, Rejecting Low Expectations: Housing is the Answer

Giselle Routhier. Rejecting Low Expectations: Housing is the Answer. State of the Homeless. Coaliton for the Homeless, March 2017.

Early Childhood Homelessness in the United States: 50-State Profile

Administration for Children and Families. Early Childhood Homelessness in the United States: 50-State Profile. January 2016.

Ending Homelessness for Families: The Evidence for Affordable Housing

Marybeth Shinn. Ending Homelessness for Families: The Evidence for Affordable Housing. National Alliance to End Homelessness and Enterprise Community Partners, 2009.

The Quandaries of Shelter Reform: An Appraisal of Efforts to "Manage" Homelessness

Dennis P. Culhane. “The Quandaries of Shelter Reform: An Appraisal of Efforts to ‘Manage’ Homelessness.” Social Service Review 66, no. 3 (1992): 428–40.

The Family Options Study: Permanent Housing Subsidies Most Effective Intervention to Assure Housing Stability for Families Experiencing Homelessness

Office of Policy Development and Research. The Family Options Study. Washington, DC: U.S. Department of Housing and Urban Development, 2016.

Predictors of Exit and Reentry among Family Shelter Users in New York City

Yin-Ling I. Wong, Dennis P. Culhane, and Randall Kuhn. “Predictors of Exit and Reentry among Family Shelter Users in New York City.” Social Service Review 71, no. 3 (September 1997): 441–62.

The Relationship between Community Investment in Permanent Supportive Housing and Chronic Homelessness

Thomas Byrne, Jamison D. Fargo, Ann Elizabeth Montgomery, Ellen Munley, and Dennis P. Culhane. “The Relationship between Community Investment in Permanent Supportive Housing and Chronic Homelessness.” Social Service Review 88, no. 2 (June 2014): 234–63.

Ending Chronic Homelessness: Cost-Effective Opportunities for Interagency Collaboration

Dennis P. Culhane, and Thomas Byrne. Ending Chronic Homelessness: Cost-Effective Opportunities for Interagency Collaboration. Supplemental Document to the Federal Strategic Plan to Prevent and End Homelessness. United States Interagency Council on Homelessness, June 2010.

Bringing Success to Scale: Pay for Success and Housing Homeless Individuals in Massachusetts

Joe Finn and Jeff Hayward. “Bringing Success to Scale: Pay for Success and Housing Homeless Individuals in Massachusetts.” Community Development Investment Review 9, no. 1 (2013): 135–38.

Family Homelessness: An Investigation of Structural Effects

Thomas E. Gould and Arthur R. Williams. “Family Homelessness: An Investigation of Structural Effects.” Journal of Human Behavior in the Social Environment 20, no. 2 (2010): 170–92.

The Economics of Homelessness: The Evidence from North America

John M. Quigley and Steven Raphael. “The Economics of Homelessness: The Evidence from North America.” International Journal of Housing Policy 1, no. 3 (2001): 323–36.

Housing Outcomes for Homeless Adults with Mental Illness: Results from the Second-Round McKinney Program

David L. Shern, Chip J. Felton, Richard L. Hough, Anthony F. Lehman, Stephen Goldfinger, Elie Valencia, Deborah Dennis, Roger Straw, and Patricia A. Wood. “Housing Outcomes for Homeless Adults with Mental Illness: Results from the Second-Round McKinney Program.” Psychiatric Services 48, no. 2 (February 1997): 239–41.

Pathways to Housing: Supported Housing for Street-Dwelling Homeless Individuals with Psychiatric Disabilities.

Sam Tsemberis and Ronda F. Eisenberg. “Pathways to Housing: Supported Housing for Street-Dwelling Homeless Individuals with Psychiatric Disabilities.” Psychiatric Services 51, no. 4 (April 2000): 487–93.

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.