How do Homeless Shelters Affect Local Neighborhoods? - Evidence from Los Angeles

In recent years, homelessness has developed into a major problem for cities around the globe. At the same time, possible solutions to this problem are often accompanied by heavy debates. For instance, the opening of homeless shelters is regularly contested by nearby residents due to worries that they bring negative side-effects such as crime and public drug use, as well as reductions in property values. However, empirical evidence for this assertion remains scarce. In my research, I aim to address this gap by examining the impact of homeless shelters on surrounding neighborhoods in Los Angeles. Using data from multiple sources, I compare neighborhoods with varying levels of exposure to homeless shelters—considering both the number of shelters and their capacity—and analyze how this exposure influences the number of arrests made in these areas. Furthermore, I aim to identify the causal effect of homeless shelters by using an Instrumental Variable approach. Specifically, I instrument for exposure to homeless shelters using the amount of city-owned property in a neighborhood, exploiting the fact that shelters are frequently established on public lots. The findings of this research will shed light on the effects of homeless housing sites on neighborhood safety and might make a constructive contribution to the ongoing discussions of where these housing sites should be built.

 

Simon Voss is a PhD candidate at the John F. Kennedy Institute for North American Studies at Freie Universität Berlin. His research focuses on urban economics, particularly the topics of homelessness, housing markets, and economic inequality.