Quantifying the Negative Externalities Associated with Homeless Encampments

This dissertation marks the first attempt to quantify the costs that homeless encampments impose on their surrounding areas. Despite the pervasiveness of homeless encampments in many economically prosperous cities, continuous data on when and where they exist throughout the year is limited. I address this relative paucity of data by showing that complaints of homeless encampments filed by city residents can be used to track their presence in real time. By comparing the number of citizen-made complaints to the number of individuals enumerated in the Point in Time Count—the current industry-standard data set on homeless encampments—I show that an increase in complaints corresponds to an increase in the presence of encampments. This dissertation focuses on Los Angeles, but this procedure can be replicated in other cities that track complaints about encampments. I use the complaints data in a spatial hedonic property price model to assess the impact of homeless encampments on residential property values. I find that 41% of residential properties transacted in Los Angeles between March 2016 and August 2022 had homeless encampments within 0.2 miles and sold on average for 1.92% less than they otherwise would have, a total realized loss of over $1.1 billion across more than 49,000 properties. I use the realized losses on property transactions to price the citywide externalities associated with homeless encampments at $14 billion, just shy of the projected cost of housing all 31,000 unsheltered homeless people in Los Angeles. Pricing the externalities from homeless encampments leads to a more thorough accounting of the costs associated with homelessness, not just for those experiencing it, but for all residents of cities that struggle to contain it.