Why Success Starts with a Look at the Landscape

In any M&A transaction, it’s imperative to have an accurate understanding of the business landscape: The environment, both internal and external; pending regulations or policies that will affect operations; and the tactics needed to meet challenges now and going forward.

This understanding is essential to ending the homelessness crisis, as well. We must know what we’re up against, and how changes and trends locally and nationally will affect people every day.

Changing definitions. For example, we must consider one important change that will go into effect January 16, 2016. The new chronic homeless definition in the Federal Register will take an emphasis off how long a person is homeless at one time, to how long a person is homeless all together. The definition will assert that to be considered “chronically homeless,” a person must have:

“been living in a place not meant for human habitation, in an emergency shelter, or a safe haven for the last 12 months continuously or on at least four occasions in the last three years where those occasions cumulatively total at least 12 months.”

In addition, under the new definition, “occasions” of homelessness will not have a minimum number of days. Instead, they will be defined as “a break of at least seven days not residing in an emergency shelter, safe haven, or residing in a place meant for human habitation.”

Further, the new definition will replace “disabling condition” with “homeless individual with a disability,” furthering broadening the scope of chronic homelessness.

These changes to the definition will mean that more people will be considered chronically homeless, and will require shelter housing. And with more stress on the shelters, the need for affordable housing will be even more important.

It’s a need that’s already prominent. According to the National Alliance to End Homelessness , in the first three quarters of 2015, the national vacancy rate was 7.1% – the lowest it’s been in 30 years. This means housing is difficult to find because fewer than ever units are available. In addition, throughout the country, rent growth is outpacing overall inflation. As a result, even if housing is available, people are not making enough to afford it.

A vicious circle. With rents rising, more people will not be able to afford housing. People — who are not homeless now — will be vulnerable to becoming homeless in the future. And, based on the new definition, more people will be considered chronically homeless, even if they weren’t considered so before.

Understanding this landscape is key to addressing the root causes of homelessness and implementing solutions that will make a true long-term difference in preventing it from happening.

As a Los Angeles M&A firm committed to helping clients understand the “big picture” of challenges and solutions, Big Change Advisors supports the Los Angeles Mission in not only providing shelter to today’s homeless populations, but in advocating for more housing options, both privately and publically.

By understanding what individuals are up against – whether in business transactions on in finding a place to live, we can achieve big change for businesses, and big change for L.A.’s communities.

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