Modern urban economics explores various issues of urbanization and urbanized area, including crime, housing, education, public transit, and other spheres. The main concern of the current urban economists relates to the problems that surround inequality in these above-mentioned spheres. In other words, the extreme differences in wealth and poverty levels only serve to exaggerate the negative consequences of urbanization.
With the devastating economic repercussion of the COVID-19 pandemic, one of the most pressing issues of urban economics proved to be housing. Millions of people faced evictions, homelessness, and defaults on their rent payments, as they lost their jobs as primary sources of income with the widespread lockdowns across the globe. This dramatic situation revealed the existing long-standing inefficiencies in housing economic structures as a result of misguided legislation prior to the pandemic. The pandemic and its restrictions only served to accelerate the deterioration of the already precarious housing market. However, the major issue is a debate on how to approach the housing crisis, as legislators and economists continue to argue for stricter access to housing.
The rationale behind these arguments is that if housing is to be given without assessing the risks of the potential tenants, it will not resolve homelessness. Thus, the commonly used research technique, Randomized Control Trial (RCT), can be implemented to determine if programs that aim at resolving homelessness are effective. At its core, RCT is a tool used to evaluate the impact of the policy on the randomized sample of a population to assess its effectiveness. In this case, RCT can be used to study the effects of these programs that skip the risk assessment and provide housing to the homeless right away. One of these programs is Housing First, implemented in a small Canadian tri-city of Moncton, Riverview, and Dieppe.
During the study, the participants were divided into two groups, with the experiment group going through the Housing First program and the control one – through the existing pathways. This research resulted in a dramatic decrease in homelessness in the first group compared to the second. Therefore, this RCT study proves the efficiency of this homelessness program in combating the housing crisis.