Why Are People Homeless — And What Can Be Done to Prevent It?

Homelessness is rarely caused by a single event or failure. Rather, it’s the result of overlapping individual and systemic breakdowns: poverty, lack of support, housing insecurity, mental illness, and incarceration among them. But while the reasons people become homeless are complex and deeply personal, targeted, timely intervention can disrupt the trajectory regardless of the cause.

Cody’s Story: A Combination of Factors

Cody was burdened by a devastating combination of common root causes of homelessness:

• Low Wages and Sudden Income Loss
  The leading cause of homelessness in Los Angeles County is unemployment and financial crisis. Nearly half of people experiencing homelessness cite this as their primary trigger. When families spend more than 30% of their income on rent, even a small setback like reduced work hours or a missed paycheck can result in eviction. Once unhoused, people face new barriers: stigma, lack of technology, poor health, and limited childcare make it even harder to find and maintain employment.
• Macroeconomic Pressures
  Wider economic conditions also play a major role. A depressed job market can limit opportunities for people already living on the edge, while inflation erodes purchasing power and makes basic goods and services harder to afford. When wages remain stagnant while rent, healthcare, and food costs rise, families that were once stable can suddenly find themselves unable to make ends meet. National or regional economic downturns often lead to spikes in homelessness—not because of individual failings, but because the broader system fails to protect its most vulnerable.
• Medical Conditions
  Illness can lead to homelessness by triggering a chain reaction of financial and personal instability. A serious or chronic medical condition often results in job loss or reduced work hours, especially for low-wage workers without paid sick leave or health insurance. Medical bills can quickly pile up, draining savings and forcing difficult choices between rent, treatment, and basic necessities. For individuals already living paycheck to paycheck, even a short-term illness can push them into housing insecurity. In some cases, physical limitations or ongoing treatment make it difficult to return to work, and without income or a support network, eviction becomes a real risk—ultimately leading to homelessness.

While many programs focus on managing homelessness after a person is already on the streets, Cody’s experience shows that preventing it in the first place can truly be a temporary lifeline that leads back to housing security.  

A Promising Path Forward: The STEP Fund

Launched by Better Angels in 2022, The STEP Fund (Short-Term Emergency Prevention Fund) provides rapid cash assistance to people like Cody, who are facing imminent eviction or housing loss.

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The program operates on a simple but powerful premise: targeted microloans can stabilize someone’s housing during a crisis and prevent them from ever entering the shelter system. These funds help cover immediate needs like rent and utilities, and crucially, are deployed quickly—often within days of application—because speed is what makes the difference between staying housed or falling into homelessness.

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Better Angels combines this financial aid with personalized casework and follow-up, ensuring that recipients are connected to longer-term resources. The STEP Fund does not require people to hit “rock bottom” before receiving help—it intervenes before the spiral begins.

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And a recent client survey shows that it works. Ninety-one percent of STEP Fund recipients maintained housing following receipt of a STEP fund loan, and 89% of recipients said the STEP Fund loan played a critical role in their maintaining housing.

Prevention Is Possible

Homelessness is preventable, but only if we shift our mindset from reacting to crises to stopping them before they start. The STEP Fund demonstrates that strategic, compassionate intervention works. By listening to people in crisis and giving them the tools to regain stability, we can reduce the number of people entering homelessness and restore faith in the social contract that too many have been denied.

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