Housing First has failed to improve health outcomes, or save taxpayer money, but has significantly increased public expenditures for the homeless
By Christopher J. Calton of The Independent Institute.
"In October, the San Francisco Chronicle shared the story of
Austin Draper, a homeless fentanyl addict who has been hospitalized
several times for endocarditis, a heart condition that is often caused
by intravenous drug use. Only 35 years old, Draper has already undergone
open-heart surgery to install a pacemaker. “The cost of his [medical]
care likely exceeds $1 million,” the Chronicle reports, “though Austin, who is on Medi-Cal, hasn’t paid anything.”
Draper is a beneficiary of California’s Housing First policy for
homelessness. He was placed in permanent-supportive housing, which
indefinitely subsidizes his rent and imposes no constraints on his drug
use. Although he is no longer living on the streets, his addiction
continues to land him in the hospital, always at the taxpayer’s expense.
Ironically, Draper’s tragedy is reminiscent of a New Yorker article titled “Million-Dollar Murray,”
written by Malcom Gladwell in 2006 to promote Housing First. Murray
Barr was a chronically homeless alcoholic whose addiction repeatedly
landed him in the hospital, leaving taxpayers on the hook for more than
$1 million in medical bills. “It would probably have been cheaper to
give him a full-time nurse and his own apartment,” Gladwell argued.
Gladwell sold the idea that Housing First would not only reduce
chronic homelessness, but the cost of placing people in
permanent-supportive housing would be offset by savings on medical costs
and other services. Twenty years later, Austin Draper’s story suggests
that subsidized housing would likely have done nothing to ameliorate
Murray Barr’s underlying problems.
An extensive 2018 study,
in fact, found that with the exception of HIV/AIDS patients,
permanent-supportive housing failed to produce any discernible changes
in health outcomes or healthcare costs. Nonetheless, the authors assert
that stable housing generally improves health outcomes because it
“provides a platform from which other physical, mental, and social
concerns can begin to be addressed.”
This idea, known as “Platform Theory,” is common among Housing First
apologists, but its logic crumbles in the context of Housing First. A
failure to adequately address mental illness and substance abuse is what
landed many chronically homeless persons on the streets to begin with,
so it hardly stands to reason that housing alone will provide the
impetus for them to finally seek the care they need.
As Draper illustrates, permanent-supportive housing residents rarely
pursue treatment without direct intervention. He knows that substance
abuse is the source of his medical woes, but he continues to refuse
recovery services, as is his prerogative under Housing First guidelines.
His city’s devotion to platform theory has produced disastrous
outcomes, with 30 percent of San Francisco’s overdose deaths occurring in permanent-supportive housing.
Contrary to Gladwell’s expectations, Housing First has failed to
improve health outcomes or save taxpayer money. Instead, it has
significantly increased public expenditures for the homeless.
California’s Legislative Analyst’s Office recently reported that
the state has spent more than $37 billion on housing and homelessness
programs over the past five years. Of course, people might gladly accept
Housing First’s high price tag if it fulfilled its promise of reducing
chronic homelessness. Yet in California, the chronically homeless
population has ballooned from less than 49,000 in 2020 to more than 66,000 in 2025.
Gladwell’s main point in “Million-Dollar Murray” was that most people
who experience homelessness do so only briefly, while the chronically
homeless minority consume the lion’s share of resources. Under Housing
First, the formula has changed. Today, the bulk of homelessness spending
goes to permanent-supportive housing, whose residents are no longer
counted as homeless.
San Francisco alone spends three-quarters of a billion dollars per year fighting homelessness, but 60 percent of the budget
goes to people like Austin Draper. In other words, the city’s 13,000
permanent housing beds draw resources away from the more than 8,000
people still living on the streets, rendering homelessness more common
and more chronic.
If Million-Dollar Murray represented the promises of Housing First, Million-Dollar Draper reflects its failures."