Why the Housing Bust Is Good for the Homeless

The real-estate bust is creating an unexpected benefit: housing for the homeless. Even as the foreclosure crisis pushes some low income families into shelters, chronic homeless rates are shrinking thanks in part to the foreclosed and vacant buildings social-service agencies can now afford to buy. In Denver, persistent homelessness is down 36 percent since 2005, as nonprofits have turned seized apartment buildings and run-down motels into 1,242 rooms, complete with access to addiction treatment and health care. A Worcester, Mass., nonprofit will soon close on five multifamily duplexes that will provide 20 to 30 units for the homeless, and Ventura County, Calif., is in talks with local banks to take over 100 homes for permanent use. "These are opportunities we haven't seen in decades," says Philip Mangano, the Bush administration's homelessness czar.

Historically, economic downturns are good for the homeless, just as booms tend to be bad. During the 1990s, despite record spending and increases in shelter beds under the Clinton administration, homeless rates jumped 50 percent. "The prosperity always trickles up, not down," says Mangano. For now, advocates are grabbing what they can.