Do homeless shelter conditions determine shelter population? The case of the Dinkins Deluge

Abstract

We study why families enter and leave homeless shelters. After 2 years of decline, the number of homeless families in New York City's shelter system began rising again in summer 1990 and continued to rise until it hit an all-time record high in summer 1993. The conventional wisdom is that a flood of new families were attracted into shelters by the Dinkins administration's aggressive policy of placing homeless families into subsidized housing. We test the conventional wisdom and reject it. Better prospects of subsidized housing increase flows into the shelter system, but this effect is not nearly large enough to offset the first order shelter effect - taking families out of the shelters reduces the number of families in them. Why did the shelter population grow after Spring 1990? A major part of the reason is that the city responded to conventional wisdom and slowed placement into subsidized housing. Other major factors were the 1990-92 recession, falling real welfare benefits and more NYCHA applications, and greater use of more attractive Tier II shelters instead of hotels. © 1999 Academic Press.