You're stuck on the idea that these people want to rent. They don't want to rent. They want to save as much money as fast as possible. Paying $500 a month is still doubling the amount of time it will take to save $36,000. They are perfectly happy living in a van or car for years if it means breaking out of the poverty cycle faster. Many have the money to rent, they have jobs, they just don't want to live paycheck to paycheck hoping to one day buy a home. For some people a short time homeless for a long time of financial security is a trade they are willing to make.