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Affordable housing, homelessness, and mental health: What heath care policy needs to address.


The United States economic crisis has deeply affected the lives of millions of Americans. This has resulted in pay reductions, job layoffs, bankruptcies, and skyrocketing foreclosures, which have plunged many families and individuals into severe economic hardship, particularly those living in low-income communities. As such, deepening poverty is inextricably linked with rising levels of homelessness for many Americans. In contrast to the popular "skid row" stereotype that the word "homeless" tends to trigger, many are in fact families and young single people. Still, the vast majority of homeless persons in the United States are those who suffer from mental health issues. Yet within this context the new health care legislation - Patient Protection Affordable Care Act of 2010 (ACA) - lacks any significant policy remedy with regard to mental health and homelessness.

One of the leading causes of homelessness in the United States is the result of chronic mental health disorders suffered by the severely mentally ill (SMI). People with untreated psychiatric illnesses comprise one-third, or 250,000, of the estimated 744,000 homeless population in the United States (USDHHS, 2012; USDHUD, 2010; National Alliance to End Homelessness, 2009). Among these, approximately two-thirds were single persons and one-third families. One-quarter of the homeless were chronically homeless while one-third have a serious mental illness, mostly schizophrenia or a bi-polar disorder. The quality of life for these individuals is clearly in question and many are victimized on a regular basis. At the present, the ACA has failed to address this concern, that is, mental illness and its relationship to homelessness. Missing from the ACA are public health services for the homeless that should provide a range of services such as, diagnosis, medication, alcohol and drug treatment, and hospitalization. All of this is compounded by the political-economic problem of inadequate and unaffordable housing.


The annual expenditures from public and private sources for health care amount to one in every seven dollars of the gross domestic product (GDP). Americans each year spend more on health care than on national defense, more per capita for health care than for automobiles and gasoline combined (USDHHS, 2012). Suffice it to say, health and medicine are basic concerns of American citizens. Thus health care policy is fundamental to human well-being and economic stability because the resources and attention given to health care, the institutions that deliver it, and the way it is received affect the shape of social relations by providing affordable health care or incurring costs to the public which could otherwise be avoided. This is why the same perplexing logic that characterizes the policies of poverty and homelessness also plagues health care policy. Indeed, the interrelated issues and outcomes that exist between poverty, homelessness and mental health make it essential that they be considered together when discussed in terms of public policy. Consequently, health care policy and homelessness are closely linked for two reasons: first, the high cost of health care serves as one of the primary contributors to poverty or low income for many Americans, and second, the poor and the aged are more likely than the rest of the population to be afflicted with illness and high medical expenses. However, the goals and priorities of affordable and accessible health care, and affordable and accessible housing are in conflict with each other, precisely because one goal arguably, precludes the pursuit of others.

Prior to the passage of the ACA, the traditional American health care system was a mix of public and private institutions with little central planning or coordination. At the highest level of the health care profession--among physicians, dentists, psychiatrists, and psychologists - fee for service (FFS) practice has been the general rule for purchasing health care either out-of-pocket or through private insurance. That is, the professional provider of health services in America established his or her own office, with perhaps one or two other physicians or medical providers sharing the same specialty, saw, his or her own patients, and charged a separate fee for each individual service performed. If a patient saw more than one provider, for example, a bill might have charges for injections, blood work, urinalysis, and office visit, and so forth. Institutions like hospitals, clinics, and laboratories have operated primarily on the same fee for service basis. This traditional system has been changed in fundamental ways over the years, moving away from FFS toward managed care systems. Nevertheless, a substantial part of the system is still FFS, even with the changes brought on by the ACA.

Medical bills are also paid through complicated arrangements among government agencies, individuals, and private insurers. Federal, state, and local governments provide a number of health-related services directly, for example, inoculations, health inspections, vector control, veterans' care, and epidemic control. Programs such as Medicare and Medicaid also reimburse private providers and individuals and through grants and direct payments for services. Individuals pay for a variety of services directly, but they also pay indirectly by purchasing health insurance from private insurance companies, such as Blue Cross-Blue Shield plans. These companies then reimburse providers for covered services, which vary widely according to the terms of particular policies. Most private insurance is purchased through or provided by employers, with the employers passing their costs on to employees in the form of lower wages. The only purely government or "socialist" model operative in the United States is basically veteran's and Native American hospitals and health services.

Although the ACA is long and complex, the interlocking goals are, arguably, the correct ones. They seek to improve the healthcare system by making insurance available to more people, specifically those with preexisting conditions, encouraging prevention and wellness, slowing the rise in costs, specifically insurance and medical costs, and making insurance more affordable for women, specifically those women who are poor with children. As with any major shift in public policy, the ACA is bound to yield some unintended consequences, such as the complexity of the employer mandate and some of the perceived difficulties claimed by employers. Nevertheless, the new government-run health insurance exchanges are currently open for consumers to purchase insurance, though opened with some online technical difficulties in registration. Health insurers throughout the country, nevertheless, have already designed and priced health plans to meet new standards that require them to cover a basic set of required benefits while discontinuing the sale of "junk" insurance. Even the Republican alternative to ACA, the Patient Choice, Affordability, Responsibility and Empowerment Act (CARE) white paper, sponsored by Senators Richard Burr, Tom Coburn, and Orrin Hatch, which eliminates minimum coverage standards, such as permanent and maternity coverage, fails to provide any provision for homelessness and mental health provisions.


Homelessness presents urban planners with numerous problems concerning policy and administration, specifically as this relates to a lack of medical healthcare coverage for the homeless. What is apparent is a lack of affordable housing for some of society's poorest members. The homeless are unable, for numerous reasons, to secure basic housing do to factors such as a lack of job skills and work experience, little or no education and training, drug and alcohol abuse, mental illness, and questionable work history (USDHHS, 2012; Ball & Havassy, 1984). Nevertheless, structural explanations suggesting the underlying causes of homelessness identify the increase in poverty in the United States as a key factor in homelessness and a correlation that exists with a lack of affordable housing, healthcare, and mental health provisions (USDHHS, 2012; USDHHS, 2007; Jencks & Peterson, 1991; Katznelson, 1981).

Clearly the loss of low-income housing over the past three decades has contributed largely to the problem of homelessness. In the late 1970s and early 1980s, low-income units in twelve of the twenty largest American cities declined by thirty percent from 1.6 million units to 1.1 million units. The trend continued throughout the 1980s and 1990s. During this period, the number of poor increased from about 2.5 million to 3.4 million, an increase of thirty-six percent (USDHHS, 2010; Wright & Lam, 1987). Nationwide, poverty increased rapidly in the early 1980s, with its highest point in 1983 (15.4%), and leveling off at that point until 1993 (15.2%). This has persisted into the 1990s and into the 2000s where nearly 40 million Americans live at, or below, the poverty line (USDHHS, 2010; Devine & Wright, 1993; Karoly, 1996; Heckman & Schulz, 2005; Haveman & Smeeding, 2007; Danziger, 2007). The sharp increase in poverty in the 1980s was accompanied by similar losses in affordable housing and termination of state facilities for the mentally ill. The net result has been increased poverty, fewer affordable homes, which translates into increased homelessness (USDHHS, 2010; Rubin, Wright, & Devine, 1992). Joel Blau has claimed that the homelessness problem has thus resulted largely from the policy decisions and ideological agenda of the Reagan and Bush administrations, and the attempt to eliminate human social services underwritten by federal government and devolved to the states who were left competing for bock grant funding that became increasingly precarious over the subsequent decades (USDHHS, 2012; Blau, 1992). The success of this effort is attested to by the increasing share of national income now going to the most affluent fifth of the population which culminated in a huge savings in tax funding for elites.

Due to increased globalization, American competitiveness in the world economy has suffered, specifically as the economy has shifted from an industrial base to a service base (Desai & Potter, 2013; Gibson-Graham, 2001; Kennedy, 1987). In the mid-1970s, the economic investment schemes available to make the rich richer and elites more profitable became increasingly limited. However, this trend was countered by the business-led efforts of the 1980s to contain or reduce wages, limit, reduce, or eliminate employee pensions, and cut taxes for elites and corporations. This was the obvious solution and one to which the Reagan administration happily agreed. Based on the "principle of less eligibility" --the axiom that welfare must pay less than work--the containment or reduction of wages further required steep cutbacks in social welfare programs. "From the outset, the Reagan administration ... sought to reduce the entire social wage" (Blau 1992, p. 49). This reduction entailed the elimination of many programs, sharp reductions in public benefit levels, and a tightening of eligibility standards. The net result was that "middle income people ran harder to stay in place, the working poor tried not to lose too much ground, and those at the bottom of the income scale struggled to retain their housing" (Blau, 1992, p. 49). Of course, Congress's and the Clinton administration's complete dismantling of the federal program, Aid for Dependent Children (AFDC), has in effect completed the conservative agenda. But Blau challenges this conservative agenda, specifically when he addresses the question of public funding for housing and raises an interesting question: "Why has every level of government persisted in carrying out wasteful short-term policies [for example to ameliorate homelessness], when the cumulative social costs of these policies undoubtedly exceed the expense of providing permanent, affordable housing? The answer is that a more adequate solution to homelessness would conflict with the underlying principles of the U.S. economy: private profit, self sufficiency through work, and the commodification of basic human needs such as food, housing, and medical care" (Blau, 1992, p. 177).

Based on Blau's assessment, it seems apparent that government could build, operate, and subsidize low-income housing so that no one would be forced to be homeless, particularly those suffering from mental health issues. However, that would usurp the prerogatives of the real estate industry; thus, people will remain homeless precisely because little or no profit can be made by providing housing to the poor. Typically these types of "market failures" government could offset by providing income guarantees, housing subsidies, and essential services. Needless to say, such programs set a bad precedent by undermining the relationship between work and material well-being under conservative assumptions, "which is, along with the concept of private profit, perhaps the underlying principle of a market economy" (Blau, 1992, p. 179). In the end, poverty, hunger, and homelessness persist because the conservative agenda of three administrations during the past twenty-five years granted capital the unrestricted right to accumulate wealth regardless of the social costs and the systematic discrediting and dismantling of the welfare state. At no time since the early twentieth century has the state's role in providing some sort of safety net for the least advantaged in society been so undermined. The outlook for the future, therefore, is unquestionably pessimistic with regard to housing some of the poorest individuals in the United States and the mental health issues associated with this.

Local Neglect: California

California Law requires that all Cities and Counties have a General Plan that guides the physical development of said City or County (California Government Code [section] 65300). Each General Plan shall consist of seven mandatory elements, one of which is the Housing Element, plus any optional elements the jurisdiction wishes to include. The Housing Element contains an analysis of future housing needs, as well as population and employment trends. As such, the trend projections are done at the regional level by the regional government, or if no regional government exists, then the California State Department of Housing and Community Development (HCD). For Los Angeles, Orange, San Bernardino, Riverside, Ventura and Imperial counties, the Southern California Association of Government (SCAG) is the regional government, who is charged with determining the growth projections and conducting the Regional Housing Needs Assessment (RHNA) for these counties.

This process performed by SCAG involves conducting population, housing, and employment growth forecasts and determining the existing and future housing needs of each community within the region. The existing housing needs include housing that is overcrowding (more than 1.01 persons per bedroom), is unaffordable (the housing cost is greater than 30% of gross income), and/or is substandard (lack of adequate cooking facilities, plumbing, or heating). Future housing needs include anticipated population growth, children moving out of their parent's homes, maintenance of a proper vacancy rate, and replacement housing (units lost due to demolitions or conversion to non-residential). After the SCAG determined the population, employment, and housing trends, the housing needs to accommodate very low, low, moderate, and above moderate incomes for each Council of Government (COG) is determined. These needs are then further broken down into the city level. This not only ensures that the housing needs for the region are accommodated, but also ensures that no one community is burdened with developing excessive affordable housing. Essentially, this is not to say that the RHNA numbers promote growth in any specific area, rather they are a tool to predict the growth of each city within the SCAG region. Yet SCAG has no clear intention of providing for housing in the area of homeless persons of SMI housing.


Nearly twenty-five percent of the homeless population in the United States suffers from some form of severe mental illness (USDHHS, 2012; National Institute of Mental Health, 2009). In a 2008 survey performed by the U.S. Conference of Mayors, twenty-five cities were asked for the three largest causes of homelessness in their communities. The third largest cause of homelessness for single adults was mental illness. For homeless families, mental illness was mentioned by twelve percent of cities as one of the top three causes of homelessness. Serious mental illnesses disrupt people's ability to carry out essential aspects of daily life, such as self-care and household management. Mental illness can prevent people from forming and maintaining stable relationships while causing people to misinterpret others' guidance and react irrationally. This often results in pushing away caregivers, family, and friends who may be the single most important force keeping that person from becoming homeless. As a result of these factors and the stresses of living with a mental disorder, people with such disabilities are much more likely to become homeless than the general population (USDHUD, 2010; The Health of the Homeless, 2009).

A study of people with serious mental illness seen by California's public mental health system found that fifteen percent were homeless at least once in a one-year period (USDHHS, 2012; Folsom, et al., 2005). Patients with schizophrenia or bipolar disorders are particularly vulnerable. Poor mental health may also affect physical health, especially for people who are homeless. Mental illness may cause people to neglect taking the necessary precautions against disease. When combined with inadequate hygiene due to homelessness, this may lead to physical problems such as respiratory infections, skin diseases, or exposure to tuberculosis or HIV. In addition, half of the mentally ill homeless population in the United States also suffers from substance abuse and dependence (USDHUD, 2010; Substance Abuse and Mental Health Services Administration, 2008). Minorities, especially African Americans, are over-represented in this group. Some mentally ill people self-medicate using street drugs, which can lead not only to serious addictions, but also to disease transmission from injection drug use. This combination of mental illness, substance abuse, and poor physical health makes it difficult for people to obtain employment and residential stability.

Policy Issues

Better mental health services would counter not only mental illness, but homelessness as well. In a survey by the USDHHS (2012) and the United States Conference of Mayors (2008), roughly twenty percent of cities listed better coordination with mental health service providers as one of the top three items needed to combat homelessness. Many homeless people with severe mental illness are in fact willing to accept treatment and services. Outreach programs are more successful when workers establish a trusting relationship through continued contact with the people they are trying to help. Even if homeless individuals with mental illnesses are provided with housing, they are unlikely to achieve residential stability and remain off the streets unless they have access to continued treatment and services. Research has shown that supported housing is effective for people with mental illness (USDHHS, 2012; USDHUD, 2010; National Mental Health Association, 2006). In addition to mental heal and housing needs, supported housing programs offer services such as mental health treatment, physical health care, education and employment opportunities, peer support, and daily living and money management skills and life skills training.

Successful supported housing programs include outreach and engagement workers, a variety of flexible treatment options to choose from, and services to help people reintegrate into their communities. Homeless people with mental illnesses are more likely to recover and achieve residential stability if they have access to supported housing programs. Unfortunately, lack of funding is a significant barrier to the successful implementation of supported housing programs. Funding is available from various programs run by the United States Department of Housing and Urban Development (HUD), as well as from the Projects for Assistance in Transition from Homelessness (PATH). Additionally, while the United States Congress passed the American Recovery and Reinvestment Act (ARRA) in February 2009, which included $1.5 billion for homelessness prevention and rehousing, nothing of any significance with respect to homelessness and mental health was included in ACA.

The homeless population in the United States, especially homeless persons with serious mental illness, has increased steadily since the 1970s (USDHHS, 2012; Drake, Wallach, & Hoffman, 1989; Belcher, 1988). In 2011 HUD, and other independent studies published data on over eighty U.S. cities, looking at correlations between the decreasing availability of psychiatric hospital beds and the increase in crime, arrest rates, and homelessness (USDHUD, 2011; Markowitz, 2006). As expected, HUD and Markowitz found direct correlations consistent with past studies in Massachusetts and Ohio that reported that approximately thirty-six percent of the discharges from state mental hospitals had become homeless within six months. It is also consistent with a study in New York that found that thirty-eight-percent of discharges from a state hospital had no known address six months later. In Roanoke, Virginia, the homeless population increased three hundred and sixty-three percent between 1987 and 2009, while in Berkeley, California, on any given night there are 1,000 to 1,200 people sleeping on the streets, half of whom were deinstitutionalized mentally ill people. Moreover, while "dumping" patients out of hospitals saves mental health systems funding, it increases the overall cost to taxpayers by shifting care to more expensive jails and prisons (USDHHS, 2012; Drake, Wallach & Hoffman, 1989; Belcher, 1988).

Clearly quality of life issues are associated with the homeless. Living in shelters or on the streets is likely to be difficult, even for a person whose brain is working normally. For those with schizophrenia or manic-depressive illness, this kind of life is often extremely difficult. The majority of homeless individuals with untreated psychiatric illness regularly forage through garbage cans and dumpsters for their food. According to USDHHS 2012 studies, previously hospitalized individuals were three times more likely to obtain some of their food from garbage cans and much more likely to use garbage cans as their "primary food source. This study also revealed that in New York twelve percent of homeless me are robbed, beaten, threatened with a weapon, or injured with a concussion or limb fracture (USDHHS, 2011; Padgett & Struening, 1992; Gelberg & Linn, 1988). In New York, seriously mentally ill individuals living in homeless shelters generally become easy targets of other criminals on the street, and those who receive social security disability checks become targets of muggers. The consequences of impaired thinking are often direr for women with untreated mental illness than they are for men. Studies of the incidence of rape among women with schizophrenia reported it to be twenty-two percent, with two-thirds of those being raped multiple times (USDHHS, 2011; Darves-Bomoz, Lemperiere, Digiovani, & Gaillard, 1995). Studies of homeless women in Baltimore found that nearly one-third of the women had been raped (USDHHS, 2012).

There is evidence that those who are homeless and suffering from a psychiatric illness have a markedly elevated death rate from a variety of causes. This is not surprising since the homeless in general have a three times higher risk of death than the general population and severely ill individuals have a 2.4 times higher risk of death during any year. For example, investigators collected data for eighteen months of forty-eight homeless people in the United States who also had a severe mental illness (USDHHS, 2012). They found that three people had died from physical causes (i.e., aortic aneurysm, heart attack, and suffocation during seizures), one had died in an accident, and three others had suddenly disappeared without taking any personal belongings with them. Depending on whether or not the missing participants were alive, the eighteen-month mortality rate was a minimum of eight percent and a maximum of fifteen percent. Homeless people with untreated brain disorders frequently suffer fatal accidents caused by their impaired thinking. Studies of homeless people found that forty-three percent of the cases showed the marked disorganization of mental illness and poor-problem solving skills (USDHUD, 2011; Lamb & Lamb, 1990). In an additional thirty percent, the subjects were not only disorganized but too paranoid to accept help. Two of the people had a place to live, but were too paranoid and fearful to stay there. Also freezing to death during bitter weather conditions is all-too-common among the homeless in general, but especially among those with schizophrenia and manic-depressive illness. These deaths do not usually attract much attention, but nevertheless take place on a regular basis in "rustbelt states." Beatings, muggings, and murder of homeless people are also ongoing and chronic issues.


The problem of inadequate health care for homeless persons, and the political-economic difficulty of providing adequate housing for low-income persons, is a policy problem that needs to be further attention in the ACA. Some policy analysts argue for greater market competition to "fix" the problems associated with homelessness and health care. However, in a purely competitive market, insurers have incentives not to insure sick persons, while physicians and other providers have incentives to over treat, thus driving up costs. Nevertheless, a carefully designed system of government regulations, in the view of supporters, can provide a fair structure within which market competition can work to extend access, improve quality, control costs, and simultaneously house and shelter homeless persons while providing mental health services to those most in need.

Mental health issues tend to be one of the leading causes of homelessness. Once on the street the mentally ill tend to remain there indefinitely. A "superpower" such as the United States, should be able to provide some form of a "safety net" for its most desperate citizens, that is, in the form of the ACA directly targeting the homelessness with increased efforts directed at mental health services. If tax policy in the United States allows billions of dollars a year in tax breaks to its wealthiest individuals and corporations, then it could also design public policy to adequately address a more affective form of health insurance for the severely mentally ill and their homeless status. Secondly, city, county, and state levels need to better explain the pressing need for more funding from federal sources. The current network of once well-financed community mental health centers and half-way houses at these governing levels need to be re-prioritized with respect to funding and resources that have been cut drastically over the years. The little funding that is budgeted for mental health and homelessness at these local levels, has been diverted to other budget priorities, and community based human services were left with the responsibility seeking funds that once came from local governments. Over that same thirty year period, local governments then found themselves swamped by a large influx of people needing care, while having no new source of revenue to pay the costs. Clearly, more funding measures are needed in addition to the typical block grant funding to local governments from the federal government.

In many states existing community mental health centers have tended to focus on less serious problems-personal adjustment, conflict management and resolution, divorce counseling, etc. People with chronic mental illness found they had nowhere to turn since local centers were unable or unwilling to treat them while some hospitals and clinics were closing down due to budget issues. Fortunately this problem has been recognized, and in the past few years a number of states, as a result of federal mandates, have given their systems a major reorganization. In some cases, state and local chapters of National Alliance on Mental Illness (NAMI) have played an important, even decisive, role in representing the interests of people who have chronic mental illness. In those states where this process has worked well, much improved access to the health system resulted for people with chronic mental illness. Yet finding homes for homeless individuals suffering from mental illness is challenging and the ACA desperately needs to address this.

ACA                               Patient Protection Affordable Care
Act of 2010
AFDC                              Aid for Dependent Children
ARRA                              American Recovery and
Reinvestment Act of 2009
CARE                              Patient Choice Affordability
Responsibility and Empowerment
COG                               Council of Government
FFE                               Fee for Service
GDP                               Gross Domestic Product
HCD                               California State Department of
Housing and Community
HUD                               United States Department of
Housing and Urban Development
NAMI                              National Alliance on Mental Illness
PATH                              Projects for Assistance in Transition
from Homelessness
RHNA                              Regional Housing Needs Assessment
SCAG                              Southern California Association of
SMI                               Severely Mentally Ill
US                                United States
USDHHS                            United States Department of Health
and Human Services
USDHUD                            United States Department of
Housing and Urban Development


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Author:Martin, Edward J.
Publication:Journal of Health and Human Services Administration
Article Type:Report
Geographic Code:1USA
Date:Jun 22, 2015
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