By John Tapogna and Madeline Baron

Last month, Forbes magazine named Portland one of the best places in the country for business and careers. But few noticed. The public's attention has turned to those the economy has left behind -- people living on the streets, in cars, or in emergency shelters.

The homeless crisis dominated state and local elections, and rival candidates found little common ground. They debated camping regulations, sit-lie ordinances, street clean ups, and the use of the Wapato jail as a shelter. Policy price tags ranged from tens of millions to hundreds of millions of dollars. The Oregonian's Molly Harbarger rightly noted few issues are as complex or inspire as much passion.

Away from the campaigns and news cycles, the Oregon Community Foundation asked our firm to evaluate the issue with the hope of creating a broader understanding on causes and possible solutions.

Here's what the report found.

The divisive political debate reflects the public's disagreement about the root causes of homelessness. Asked in an October 2017 survey whether homelessness and housing costs were linked, a narrow majority of Portlanders agreed. A sizable minority said personal traits, like drug addiction and mental health issues, were the key drivers.

So, which is it? The cost of housing or personal traits? Or both?

To answer these questions, we looked across the country to identify where homeless crises are most severe. And, the data couldn't be clearer. High-rent regions -- San Francisco, Los Angeles, New York City, Seattle and Portland -- lead the nation in homelessness. By contrast, rates are low across Appalachia, a center of the nation's opioid crisis and a so-called disability belt. If drug addiction and disability were the key drivers of homelessness, West Virginia and Arkansas' crises would rival ours. They don't come close.

A dysfunctional housing market exacerbates Portland's crisis. The region built just seven housing units for every 10 new households during 2010-2016, and rents have risen accordingly. The tight market has pushed 56,000 households into a federally-defined "worst-case housing needs" category. These are very low-income households who spend more than half of their income on rent. Nearly all of them would qualify for federal rent assistance, but Congressional spending caps limit the program's reach.

These worst-case needs households are a key source of episodic homelessness. On any given night, unforeseen crises -- job loss, eviction, domestic abuse -- tip some of these households into shelters or onto the streets. Most experience homelessness for months but not years. Regional officials counted about 4,300 episodically homeless individuals on one night last winter. As rents rise, so will the ranks of the episodically homeless.

But on that same night, officials also counted about 1,700 chronically homeless individuals. They had been homeless for more than a year or experienced repeated spells over time. Many of these individuals encounter significant barriers to housing and employment: mental and physical disabilities, substance abuse issues, criminal records. Every community across the country, large and small, has people with severe challenges who will struggle to maintain to stable housing absent sustained support. Portland's challenge is not unique.

So, the public's disagreement about the causes of homelessness is understandable. The region faces two homeless crises. One involves tens of thousands of severely rent-burdened households and the episodically homeless. The second involves a sizable, but more manageable, number of individuals with especially challenging personal circumstances.

The two crises require different strategies and tactics. Where do we go from here?

The region is on track in its fight against chronic homelessness. The widely-recognized solution is permanent supportive housing, which delivers housing and supports without time limits. Local officials set a goal of creating 2,000 of those types of units in the next decade, and the successful Metro affordable housing bond will help achieve the goal. Operational costs are high -- more than $20,000 per year -- so success requires rigorous, data-informed targeting of individuals with the most challenging personal circumstances. Do that, and chronic homelessness would steadily decline, freeing up needed shelter capacity.

That's hard work.

And it's just a start. Ending homelessness also requires fixing a dysfunctional housing market. Housing production must keep pace with household formation to keep rents in check. That requires a combination of accelerated permitting, pruned regulations, local politicians standing up to not-in-my-backyard activists, and state-level interventions with fiscal consequences for cities that fall short of their housing production goals.

It also requires timely, effective implementation of the affordable housing bonds, revamped inclusionary zoning rules, and a smart deployment of local rent vouchers to supplement the undersized federal program. As for shelters, they are the break glass, only-when-all-else-fails policy of last resort. An overpriced housing market will overwhelm a well-intentioned, shelter-building effort.

Fix the housing market, find permanent homes for individuals with the deepest needs, and the region will make progress on this crisis.

John Tapogna and Madeline Baron are colleagues at ECONorthwest, an economic consulting firm headquartered in Portland. The views expressed here are their own and do not necessarily reflect those of their colleagues or clients.

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