Houston is selected as an extreme case to test the hypothesis that homelessness results from a mismatch between the supply of rental housing affordable to the poor and the demand for low-cost housing. In 1983, Houston had a rental vacancy rate of 18% but also had a large and growing homeless population. Annual Housing Survey data for 1976-83 show that rent increases in Houston far exceeded the rate of inflation, while renter incomes stagnated. Hardest hit were low-income blacks, who are disproportionately represented among the homeless population in Houston. Rent inflation in the face of massive vacancies is an indication that expected market forces will not meet the housing needs of the poor.
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