Understanding the problem of homelessness

Homeless people sleeping rough along the walkways of Jalan Raja Laut in Chow Kit, Kuala Lumpur - CHAN TAK KONG/The Star

AFTER midnight, the scene on the ground in Kuala Lumpur tells a different story from the one on its skyline. Under the flyovers of Chow Kit and along the five-foot ways of Jalan Tuanku Abdul Rahman (pic), men and women sleep on cardboard while the towers above them glow with the promise of a high-income nation.

Homelessness in Malaysia is often filed away as a welfare matter, a problem for the Social Welfare Department, city councils and charitable soup kitchens to quietly manage – out of sight of policymakers focused on GDP growth and investment figures.

But homelessness is a symptom of economic hardship, so treating it as a side issue is a mistake.

The most immediate economic cost of homelessness is lost productivity. Without a fixed address, applying for jobs is difficult for the homeless even if they are willing and able to work.

Multiply this across the thousands sleeping rough in cities nationwide, and the country is sidelining part of its working-age population at a time when Bank Negara has flagged labour market tightness as a risk to growth.

There is also a fiscal cost that rarely makes it into national budget debates. Homelessness drives up spending on emergency healthcare, as untreated chronic illnesses eventually land in hospital emergency departments rather than cheaper community clinics.

It strains municipal budgets through repeated enforcement operations and provisions of temporary shelter without addressing the underlying causes – housing insecurity, low wages and family breakdown – that push people onto the streets in the first place.

Malaysia’s rapid urbanisation compounds the problem. As economic corridors draw investment and internal migration into cities, the gap between urban wages and urban housing costs widens further for those at the bottom of the income ladder.

Klang Valley and Penang are among the magnets for jobs in services, manufacturing and the digital economy, but supply of affordable housing has not kept pace in these areas, leaving low-income workers and gig economy riders at real risk of slipping into homelessness after a single shock – a medical bill, a retrenchment or a family emergency.

Addressing housing affordability requires policymakers to treat housing and reintegration support as economic infrastructure, not charity.

Malaysia already has frameworks worth building on, including the Destitute Persons Act and city-level outreach programmes. But these tend to focus on providing temporary shelter rather than offering pathways back into stable housing and employment.

A more effective approach would combine affordable rental housing targeted at at-risk groups, faster access to banking for those without fixed addresses, and closer coordination between the Housing and Local Government Ministry, the Social Welfare Department and employers willing to offer transitional work.

Countries that have successfully reduced chronic homelessness, like Finland and Denmark, found that providing stable housing is cheaper than managing the downstream costs of leaving people on the street.

Malaysia’s economy grew a healthy 5.4% in the first quarter of 2026, and unemployment sits near a decade low. These are genuine achievements.

But growth figures alone do not capture whether prosperity is reaching everyone, and a nation cannot claim high-income status while a visible and growing number of its citizens have no address to call their own.

Solving homelessness is not a distraction from economic policy; it is economic policy.

NEVHAN PHRASSANTA NAIDU PUSPAKARAN

Changlun, Kedah