Homelessness in Southeast Tennessee has risen 12% during the past year, with more than 1,000 people counted as unhoused in January, the Chattanooga Regional Homeless Coalition’s 2025 State of Homelessness report finds.
The 55-page document, released this week, details rising economic pressures, significant gaps in housing capacity and a growing fiscal case for investing in housing solutions rather than absorbing the escalating costs of inaction.
The report draws on multiple data sources – including the region’s By-Name List, the federal Point-in-Time Count and the annual Housing Inventory Count – to assess who’s experiencing homelessness, what services are available and where gaps persist.
More than 1,000 unhoused
On Jan. 22, 2025, the annual Point-in-Time Count identified 1,092 people experiencing homelessness across the region, up from 975 the previous year. Of those counted, 656 were unsheltered and 436 were staying in shelters. Hamilton County accounted for the majority, with 876 individuals.
The coalition’s By-Name List – a real-time registry of individuals and households experiencing homelessness – showed similar trends. As of May 1, 2025, the list included 777 households totaling 1,090 individuals. About 28% met the federal definition of chronic homelessness, 53 of which were veterans. More than 90% of those assessed reported living in the region for at least a year.
Youth homelessness declined during the reporting period, dropping from 81 to 53 active cases between May 2024 and April 2025. Family homelessness peaked in October 2024 but declined steadily afterward, due in part to targeted funding for diversion and rental assistance programs.
Economic pressures driving instability
The coalition links the rise in homelessness to a worsening mismatch between wages and housing costs. In Hamilton County, the Fair Market Rent for a two-bedroom apartment is $1,426, which requires an hourly wage of $27.42 to avoid being rent-burdened. That wage exceeds what 76% of jobs in the Chattanooga area pay, according to Bureau of Labor Statistics data.
Minimum wage workers face the steepest gap. Someone earning $7.25 an hour would need to work more than three full-time jobs to afford a one- or two-bedroom unit without becoming rent-burdened. Even at average wages, many working households are unable to keep pace with rising rents, leaving little margin for emergencies like medical bills or car repairs that can quickly lead to housing loss.
Nearly three-quarters of individuals experiencing homelessness reported living with at least one disabling condition, such as chronic illness, mental health conditions or mobility impairments. The average Social Security Disability Insurance benefit is about $1,537 per month – well below the rent for a one-bedroom unit – leaving little for other expenses.
System capacity falls short
While more than 1,000 individuals experience homelessness on a given night, the region’s housing programs maintain only 901 year-round beds, according to the Housing Inventory Count. Emergency shelters account for 288 beds, rapid rehousing for 155 and permanent supportive housing for 433. Emergency shelter capacity meets only 22% of current need.
The report identifies several specific shortfalls in the region’s shelter system. Family shelter capacity currently includes 158 beds, far below the 385 beds needed to ensure no child sleeps on the street.
There are no beds designated for seniors aged 62 and older, even though 317 older adults experienced unsheltered homelessness over the past year.
Shelters serving survivors of domestic violence have 79 beds, but the estimated need is 110.
Medical respite beds – critical for individuals who are too ill to recover on the streets but do not require hospitalization – are limited to between two and 11 at any given time, compared to a projected need for at least 15 dedicated year-round beds.
Permanent supportive housing – intended for people with chronic homelessness and disabling conditions – falls short by nearly 300 beds. With average stays of five years, turnover is low, making capacity increases essential to meet demand.
Costs of inaction vs. solutions
The coalition argues that failing to address homelessness comes at a steep and recurring cost to the community. Emergency room visits, arrests and lost workforce productivity collectively cost tens of millions of dollars each year.
Functionally ending homelessness in the region, the report estimates, would cost $28.9 million annually – less than 0.05% of the state’s Fiscal Year 2026 budget, or roughly 2.3% of combined regional local government general funds.
Chronic homelessness is associated with sharply elevated health and safety risks. People experiencing homelessness face mortality rates 60% higher than those living in poverty but housed, with average ages of death between 41 and 51. Rates of violent victimization and traumatic brain injury are also substantially higher among the unhoused population.
Policy recommendations
The report outlines several steps for local governments, nonprofits and community groups. The recommendations focus on expanding the region’s capacity to address homelessness through a coordinated, housing-first approach.
Key steps include increasing housing and shelter capacity to meet current demand, investing in diversion and prevention programs to reduce the number of people entering homelessness and creating incentives for affordable housing development and greater landlord participation.
The coalition also urges broader financial support from local governments to sustain and scale these efforts over time.
Diversion programs, such as Hamilton County’s Housing Forward Fund, have shown particular promise. The fund provided assistance to 378 households in the past year, helping them avoid shelter or street homelessness through targeted financial aid for deposits, arrears and move-in costs. However, the report notes that more than 1,400 individuals who qualified for diversion were unable to access funds, highlighting the need for sustained investment.
A coordinated path forward
The Chattanooga Regional Homeless Coalition concludes that homelessness in Southeast Tennessee is the result of structural pressures, but also a solvable problem with coordinated regional action. With targeted investment and expansion of housing interventions, the coalition argues, the region can make homelessness “rare, brief and nonrecurring.”
Source: Chattanooga Regional Homeless Coalition