Homelessness continues to weigh on American cities. The government’s annual homeless count reached a record high in 2023, per a recent analysis by the Department of Housing and Urban Development.

Houston is among the few major cities that bucked that trend in the last decade.

The city, lauded nationally for its homelessness efforts, is where Derrick Escobedo ended up after his release from prison. At 34, he moved into his first real home after a life of struggling with abuse and instability.

“My mom was murdered. My dad was murdered. And then I went to foster care when I was just 13 years old. And then from foster care, I end up going to prison.” 

When he got out a year ago, he started living in his car. It was Houston’s coordinated network of homelessness advocacy groups, known as the Way Home, that connected him with a support system, a job and a permanent, federally subsidized home. 

“When I was homeless, I didn’t love myself,” he said. “But then when you actually get an apartment, then you’re like, ‘Wow, I’ve finally got my own place.’ It’s unbelievable.” 

The region’s homelessness initiative, which has moved some 30,000 people like Escobedo into housing since 2012, has benefited from relatively cheap housing, a low cost of living and federal disaster funds.

But COVID-related funding is expected to dry up in 2024, and the city is becoming more expensive, jeopardizing the region’s ability to maintain the volume of housing it provides to people living on the streets.

“We piecemeal, on an annual basis, our funding of the homeless response system, and historically we’ve done that through special federal funds that will come through because of crisis,” said Marc Eichenbaum, special assistant to the mayor of Houston for homeless initiatives.

“When a hurricane hits, we get disaster funds. Or when there is a pandemic, there is funds,” he said. “But what happens when we don’t have a crisis?”

Houston’s Coalition for the Homeless estimates that the local response system will require $35 to $50 million in new annual funding to continue to house and provide services to the unhoused population at current levels, established as a result of federal COVID aid.

Questions about future funding are being raised as housing becomes less accessible in Houston and the larger Harris County because of higher costs. Evictions have increased, and in some cases, families have moved in together to afford housing.

Houston-area landlord Jamil Hasan has felt the pinch. He’s tried to keep his rental units affordable in a central Houston neighborhood where property values have rapidly risen.

“When you see the rent increase 30%, we always like to blame the landlord. But if [costs] have gone up by 40%, they have to make it up. The only thing is passing the cost to the tenant, and that’s where we are seeing the squeeze.”

Hasan works with Houston’s Coalition for the Homeless to provide apartments for its unhoused clients. Federal housing vouchers are used to pay the rent, so Hasan has to charge what the government deems fair. 

“Fair market rent is $1,325, I have to go with $1,325,” Hasan said. “Sometimes you don’t agree with that, but that’s the balance that every landlord has to see what’s their bottom line.”

He has to maintain that fair market rent level, despite the increases in property taxes, insurance rates and utility costs. “Our water bill has increased from $20 to $60. We have to absorb that,” Hasan said.  

For now, he’ll continue to work with the unhoused population — but he’s just one landlord. 

Ashlie Young coordinates with landlords across Houston to find available and affordable housing for the Coalition for the Homeless. She said she worries about the expiration of COVID-related funds used to pay landlords extra, in addition to rent, to set aside apartments.

“If they were holding the units off the market, we were able to offer what’s called some landlord incentive fees,” she said. “It can offset those initial move-in costs.” 

That funding goes away this year while another problem looms: “Being priced out,” she said.  

Young said she’s concerned that formerly homeless clients, many of whom are limited to one year of housing, may struggle when they have to become fully self-sufficient.

Houstonians are spending more on housing than in previous years with rent increases outpacing income growth.

From 2015 to 2021 in Harris County, median rent increased 29% while wages increased about 23%, according to a Rice University analysis that showed Houstonians are increasingly burdened by housing costs. In some neighborhoods, rent has doubled.

Princeton University’s Eviction Lab found that eviction filings in the region have also increased. In November, evictions were roughly 41% higher than the pre-pandemic average.

And there are signs that Houston’s effort to shrink the number of people living on the streets has plateaued.

Though the annual Houston homeless count decreased from 7,187 in 2012 to 3,270 in 2023, the number of people experiencing homelessness grew by 7% since 2021, according to HUD data.

Wage increases are also straining efforts to reduce homelessness, as the cost of living affects the programs’ staffing, especially in the current tight labor market.

“These jobs of being case managers and working with individuals who are very vulnerable [are] challenging. And too often, we don’t have the funds to do it, attract talent and keep that talent,” said Eichenbaum from the mayor’s office.

In many ways, advocates for the homeless are trying to do more with less.  

But Mike Nichols, the outgoing CEO of the Coalition for the Homeless, said it’s in the region’s financial interest to invest in housing since taxpayers will pay for the unhoused population one way or another.

“When a person is on the street, it will cost the taxpayers between $40,000 and $60,000 a year for one person. That money is heavily in emergency health care, but also in policing and cleanup,” said Nichols. He added that the cost of housing is around $20,000 annually.

“It is fiscally responsible for our community, our citizens, to house people,” he said.