Evidence Calls “Housing First” Homelessness Strategy into Question

By Vanessa Brown Calder and Jordan Gygi of Cato. Excerpt: 

"Has Housing First succeeded in its aims? The state of Utah claimed that it reduced chronic homelessness by 91% from 2005–2015, and this initially prompted commentators and policy analysts to promote Utah’s Housing First policies as the gold standard. Unfortunately, the largest decline in homelessness during this period occurred between 2009 and 2010, when Utah changed its definition of chronic homelessness and stopped counting people in transitional housing as chronically homeless. As a result, methodological differences were likely at play in the cited decline.[4]

Perhaps more significantly, since 2017, chronic homelessness grew rapidly both in the state generally and in Salt Lake County specifically (Figures 1 and 2). In 2010, the state counted 406 chronically homeless individuals and by 2017 this number had fallen to 185 (a 54% decrease). However, from 2017 to 2022, the number of chronically homeless reached 792, a 95% increase from 2010 and 328% increase from 2017.[5]

Salt Lake County, where most of the state’s homeless population resides, follows a similar pattern (Figure 2). In Salt Lake County, chronic homelessness fell around 29% between 2010 and 2017, but it rose sharply (297%) between 2017 and 2022.

Utah’s Housing First initiatives specifically targets the chronically homeless, a group that constitutes a subset of the broader homeless population. However, it is worth considering changes in the broader (overall) homeless population, as well. Figures 3 and 4 show that the number of people experiencing homelessness on a given night did not change much between 2005 and 2022; although the number of homeless individuals trended down after 2012, homeless counts later returned to former levels both statewide and in Salt Lake County.

What is to blame for Utah’s disappointing results? Utah’s Office of the Legislative Auditor General conducted an audit of Utah’s homelessness response in 2021 and identified two reasons for Utah’s recent struggles that are inherent to the Housing First approach. The first issue is that the cost of permanent housing is high, with an estimated $250,000–$275,000 required per unit built. After surveying those working in homeless services, Utah’s Office of the Legislative Auditor estimates that Utah is short 1,200 units to meet current demand. Thus, it would cost between $300 million and $330 million to catch up with current demand.

To put this number in perspective, Governor Spencer Cox’s proposed FY 2024 budget, which has been called “Utah’s highest budget ever,” recommends $20 million in state funding for “deeply affordable housing,” at least some of which would benefit the homeless population.[6] This is in line with recent years’ spending, where the state allocated between $3 and $23 million annually for homelessness.

State officials agree that the high cost of permanent housing is making Housing First more difficult to sustain. Joseph Jensen, who oversees data collection and management at the Utah Office of Homeless Services, recently stated that “we do feel like [the increase in homelessness is] being driven, at least in part, by the tightening housing market, very low vacancy rates, housing prices, (and) rental prices have increased dramatically over the last year, really over the last several years.” Unfortunately, Housing First initiatives become more expensive when housing is more expensive, and housing in Utah costs roughly twice as much on average today as in 2015.

A second issue with Housing First is that its focus on permanently placing homeless residents in housing units means that there are rarely vacancies in the Housing First housing stock. According to the 2021 audit, between 92 and 95 percent of homeless residents placed in permanent housing between fiscal years 2017 and 2020 remained in permanent housing during the reporting period. Because Housing First encourages the formerly homeless to remain in state‐​funded housing long term, this creates added pressure on the program’s financials. Consequently, additional permanent housing units must be continually built or acquired by the state.

For these and other reasons, Utah’s experience almost twenty years out from program adoption casts doubt on the idea that the Housing First philosophy will deliver on its promises. Although Housing First was once hailed as a solution to homelessness, Utah’s experience suggests that there still are not easy answers. In fact, the state is continuing to experiment with ways to get the homeless off of the streets, including modifying the Housing First approach to looking at ways to move homeless out of tents and into semi‐​permanent tiny houses. The outcomes in California, another Housing First state, also look bleak.

Given the results so far, it would be prudent for the Biden administration to allow local governments to continue experimenting with strategies to reduce homelessness, rather than pushing Housing First initiatives nationwide. A more cautious approach ensures that states and municipalities avoid costly pitfalls and put resources towards successful initiatives rather than faltering ones.

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[1] Some experts believe that getting individuals with a substance use disorder into stable, permanent housing can help to facilitate recovery. However, just as not all those with substance abuse disorders are chronically homeless, not all chronically homeless individuals have substance abuse disorders. Variation in the population suggests that a one‐​size‐​fits‐​all approach is not adequate.

[2] A person is considered chronically homeless if they are an “unaccompanied homeless adult individual (persons 18 years or older) with a disabling condition who has either been continuously homeless for a year or more OR has had at least four (4) separate occasions of homelessness in the past three (3) years.”

[3] According to HUD estimates.

[4] Kevin Corinth, a former scholar at the American Enterprise Institute, describes some of Utah’s earlier measurement errors here. In addition to definitional issues pertaining to chronic homelessness, Kevin also noted methodological inconsistencies pertaining to the annualizing of point‐​in‐​time estimates. After reaching out to state officials to clarify without success, the authors of this blog decided to use (non‐​annualized) point‐​in‐​time counts for purposes of this analysis.

[5] We use 2010 as the beginning of the current analysis because this is the year in which Utah changed their definition of chronic homelessness.

[6] In addition, the governor’s budget recommends $80 million in one‐​time federal American Rescue Plan (ARPA) funding for deeply affordable housing."