Safety net programs face difficult trade-offs, such as the much-discussed conflict between providing assistance to persons with low earnings and not discouraging work. However, safety net programs can also hinder recipients from improving their financial situations in other ways. One important issue that has received little attention is the effect of these programs on recipients’ decisions to share housing.
For poor Americans, housing costs often dominate limited budgets — 52 percent of poor, renting households spent more than half of their income on housing in 2013. Shared housing can lower costs because of the substantial economies of scale in housing consumption: One two-bedroom apartment is much cheaper than two one-bedroom apartments. The cost savings may also extend to other areas, such as food production and child care, and sharing housing may even have mental health benefits. It should not be surprising, then, that a large number of otherwise poor households share housing to economize their scarce resources and receive the potential benefits of extended social support.
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