As we continue our Unhoused In Indiana series, we want to tackle a topic we’re asked about almost daily: how do people become unhoused, and what causes it?
It is still commonly believed by many that homelessness is caused by one catastrophic event or a poor choice. This damaging misconception ignores that becoming unhoused usually results from isolated incidents that compound into a cascading moment when affording housing becomes impossible. More often than not, those who become unhoused or are currently unhoused work, but simply do not make enough money to afford rent. Today, as we continue our unhoused in Indiana series, we will look at some of the most common ways fellow Hoosiers find themselves unhoused.
The Cost of Housing Has Outpaced Income
In 2009, Indiana set the minimum wage at $7.25 per hour, and it has not changed since, despite the rising cost of living over the past 17 years. Now, consider that to afford a modest two-bedroom apartment in our state, you would need to make $22.18 per hour. For someone working a minimum-wage job, they’d have to work 122 hours per week, or about three full-time jobs. This is just to afford rent and doesn’t account for utilities, childcare, groceries, healthcare, or transportation. When we look at the math, it is clear this isn’t a moral failing but a math problem.
So, what happens when one is working, doesn’t make enough money to cover rent, yet makes too much to qualify for assistance? This group is known as ALICE, which stands for asset-limited, income-constrained, working. This gap is where we see our unhoused population growing. So how does this happen?
Let’s use a common scenario: A single parent lives paycheck to paycheck and works two full-time minimum-wage jobs. The car breaks down, or there’s an unexpected medical expense. To cover the unexpected bill, rent is a little late, which incurs a late charge. What most don’t realize is that, in order to “catch up,” a surplus is required, but when one is living paycheck to paycheck, a surplus usually is not possible. Soon, that unexpected bill becomes a late rent payment with added fees that keep ballooning, and it can lead to eviction. This sounds far-fetched, but it is heartbreakingly common across Indiana. The irony is that the parent is working really hard, but it’s not enough.
A Sudden Loss of Income:
According to the Federal Reserve, about 4 out of every 10 adults in the United States could not cover a $400 emergency without borrowing funds to cover it. We share this point to show that, as the cost of living rises, many people lack the chance to build savings. This leaves those who are struggling with no safety net. Losing a job can often mean losing housing. If eviction follows, so does the eviction record, making it harder to secure housing in the future.
Family Crisis:
Another common cause of homelessness in Indiana is a family crisis, such as a domestic violence situation, divorce, a death in the family, or aging out of foster care. This is typically an unplanned event that can cause someone to become unhoused. These individuals can no longer remain where they were previously housed and must find a new housing solution. We also commonly see this situation for older adults who lose a spouse; as the cost of living rises, they can no longer afford to remain in their homes.
The Connecting Thread:
No matter the cause, the connecting thread is the same: too little income, lack of affordable housing, and no safety net. For some, it sounds far-fetched that people still make minimum wage in Indiana, but it is more common than most realize. However, challenges that risk becoming unhoused remain for most people earning up to that $22 mark we mentioned earlier, where housing becomes stable. When affordable housing stock is limited or nonexistent, this squeezes this subset of our community even harder. Others commonly experience an unexpected job loss, throwing life into chaos without a safety net, not because they were irresponsible but because every dollar earned went toward staying housed. For some, finding themselves unhoused comes from a big life change like the death of a loved one, fleeing violence unexpectedly, or aging out of their home as young adults.
There are many causes of homelessness across Indiana, and just as people are unique, so are their stories. At Nest, we see these stories daily and work to help our guests overcome previous challenges and regain stable housing for the long term. The cost-of-living crisis is real, and our community is feeling the squeeze. By understanding the most common causes in our community, we can begin to recognize patterns and build solutions to keep our neighbors housed.
