The Failed Promise of Housing First

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."

Housing First is an Evidence-Based Failure

By Christopher J. Calton.

"“Housing First is an evidence-based solution to homelessness!”

This refrain is repeated ad nauseum in homelessness circles. The pronouncement has begun to resemble a religious creed—a ritualistic profession of devotion to prevailing homelessness policy, and true believers will not have their faith shaken by empirical observation to the contrary.

Those who are more agnostic toward homelessness policy, however, might reasonably express disbelief at the claim that Housing First is an evidence-based solution. Before Housing First became federal policy in 2013, homelessness was steadily declining, even during the Great Recession, and continued to fall modestly until in 2016. Since then, however, homelessness has ballooned by 42 percent, even as homelessness spending has skyrocketed.

What, then, explains the unwavering belief among Housing First evangelicals that their solution to homelessness is “evidence-based”?

The alleged success of Housing First does not come from aggregated homelessness data, but from case studies of different homelessness programs. The Clinton-era strategy for addressing homelessness was a treatment-oriented approach known as “Housing Readiness,” which used housing as an incentive for clients to participate in services, such as substance-abuse treatment and work training programs, with the goal of helping them achieve self-sufficiency.

Housing First took a different approach, making services optional and offering people permanently subsidized housing, with the more modest goal of “housing stability.” The original experiments focused on chronically homeless individuals who suffered from a severe mental illness—people for whom self-sufficiency would likely be impossible.

By redefining the measure of success from “self-sufficiency” to “housing stability,” the engineers of Housing First were able to claim resounding victories over the older approach. Their earth-shattering discovery was that housing stability is greater when housing is subsidized than when it is not subsidized. But, crucially, these successes are confined to the people who are accepted into the program, not the homeless population overall.

Under Housing Readiness programs, roughly one-third of participants remained stably housed, but they also lived independently. This means that when they exited the program, the resources they benefited from could be directed to others.

The primary focus of Housing First, by contrast, is “permanent-supportive housing,” which essentially makes people lifelong wards of the state. The subsidies that sustain them continue to draw from homelessness budgets, leaving fewer resources available for people who are still on the streets.

In other words, Housing First may achieve greater housing stability for the lucky few who get accepted, but Housing Readiness programs were able to serve a much larger population at significantly lower cost.

The problem is exacerbated by Housing First’s emphasis on the chronically homeless. One pillar of Housing First is the mandate that service providers prioritize the most severe cases, which sounds great in theory but works horribly in practice. Because of the scarcity of permanent-supportive housing, outreach workers administer “vulnerability assessment tests” to see who should qualify for placement. Those who have recently fallen into homelessness and, with temporary support, have the greatest chance of achieving self-sufficiency are typically deemed insufficiently vulnerable. Unworthy of assistance, they are often neglected until their condition deteriorates and their homelessness becomes chronic.

The ironic result is that chronic homelessness has grown at an even faster pace than overall homelessness, having doubled since 2016. As economists David Lucas and Christopher Boudreaux explain, “the raw data make clear that chronic homelessness proved not to be the ‘golden goose’ of the evidence-based policy as had been anticipated, but rather the ‘canary in the coal mine’—indicative of a profound disconnect between the intentions and outcomes of this state-led mission.”

Housing First is designed to keep people in the system, rather than shepherding them out of it. This has created the mechanism by which both homelessness and homelessness spending continuously grow—a handful of beneficiaries monopolize available resources while the bulk of the homeless population is left wanting.

After more than a decade of Housing First as federal policy, it is time to admit that this so-called “evidence-based solution” has been an unambiguous disaster."

The Rise and Fall of ‘Housing First’ in Utah

By Christopher J. Calton of The Independent Institute.

"In 2005, Utah unveiled its 10-year plan to end chronic homelessness using a novel strategy known as Housing First. The guiding philosophy of Housing First contends that the best way to ameliorate homelessness is to provide permanently subsidized, no-strings-attached housing to unhoused persons. When the plan came to an end in 2015, Utah made national headlines, boasting it had reduced chronic homelessness by an astounding 91 percent. Utah’s success inspired imitation across the country. 

Another decade has passed since Utah declared victory, but now it is one of a handful of states that are breaking away from Housing First. The state—along with Georgia and Florida—is returning to the strategies of the 1990s that focused on treatment-oriented solutions to homelessness. 

This prompts an obvious question: how could the exemplar of Housing First’s success transform into a testament to its failure? What went wrong in Utah?

In fact, Housing First in Utah never produced the results that its proponents claimed. The celebrated reductions in chronic homelessness between 2005 and 2015 were spurious. Utah officials manipulated data to produce politically desirable outcomes on paper and obscure their plan’s failure. 

The standard process for measuring homelessness is the point-in-time (PIT) count, which provides a snapshot of that population on a single night. PIT counts are useful, but they necessarily undercount the total number of people who experience homelessness in a given year. For this reason, some jurisdictions also provide “annualized” estimates. Utah’s 2015 PIT counts, for example, reported roughly 3,000 homeless persons in Utah, but the annualized count estimated that 14,000 people were homeless at some point throughout the year.  

Producing annualized estimates of total homelessness is not inherently wrong, but we might question the usefulness of annualizing chronic homelessness. In their 2010 report, Utah officials correctly justified annualized estimates because “people are often homeless only for a short period of time”—i.e., nonchronic cases. Yet in the same paragraph, the report claimed that the chronically homeless population “is about two times greater than that observed on a single night.” 

Annualizing chronic homelessness makes little sense, but it should still not alter the trajectory of population changes since legitimate estimates would employ the same assumptions across time. Utah officials, however, altered their formula each year. In 2010, they determined that annualized chronic homelessness was double the PIT count. In 2011, it was less than double, and officials continued arbitrarily reducing the multiple each year until 2015, when they reported only the raw PIT figure. This was a black-and-white case of data fraud, almost certainly motivated by the desire to show that their ambitious plan was a rousing success. 

Utah’s PIT counts, however, still showed an impressive 50 percent reduction in chronic homelessness between 2005 and 2015, yet this is also misleading. In that decade, the method for determining chronic homelessness changed twice, corresponding to the two largest single-year drops.

Before 2010 the state mistakenly counted people in transitional housing as chronic. Although they fixed the error going forward, they did not adjust their estimates for the previous years, artificially producing the appearance of a significant decline in chronic homelessness. Then, in 2015 the Salt Lake region reported a staggering decline in chronic homelessness, which it attributed to the expansion of permanent-supportive housing (PSH) and “a new process of confirming whether individuals are chronically homeless.” Since the region had only added 34 PSH beds, the lion’s share of the reduction was due to the methodological change.

Between 2010 and 2014—when the counting method was stable—PIT counts for chronic homelessness in Utah increased by 84 percent. Since 2015 it has ballooned by nearly 400 percent. 

Utah became the poster child for Housing First in 2015 because the state officials manipulated the data to obscure the failure of their ambitious 10-year plan. Utah’s policy reversal is an admission of this failure, and the rest of the country should take note. Housing First has never produced the results it promised, and it is time to turn to different solutions." 

Trump Forces D.C. to Get Real About Homelessness

He’s right to treat it as a problem of mental illness and bad behavior, not one of housing and inequality

By Devon Kurtz. He is director of public safety policy at the Cicero Institute. Excerpts:

"In the largest survey of homeless Americans ever conducted, only 4% cited high housing costs as the primary reason they were homeless. Significant majorities said they had mental-health issues, had used illegal substances and had been to jail or prison for extended periods."

"Almost 3% of America’s homeless population dies on the street each year. Between 2011 and 2020, overdose deaths among homeless people increased by 488%, rising to just under 1% of the homeless population annually."

"horrible violence associated with homeless encampments, in which homeless people often victimize other homeless people."

"homeless people were about a dozen times as likely as average Americans to be victims of serious crimes, but they were hundreds of times as likely to be perpetrators."

"in as many as eight states, more than half the people living on the street are registered sex offenders; nationally, the median is 1 in 5."

"One homeless encampment in Austin, Texas, produced 655 tons of trash in a sprawling underpass tent city."

"a recent systematic review by an interdisciplinary group of researchers found no evidence that shelters in the U.S. have elevated rates of violence compared with the street. Prisons are far safer than the streets, with a mortality rate less than one-tenth that of the homeless population."

"for Americans from high-crime neighborhoods, prison reduces age-adjusted mortality by as much as 57% compared with peers living in the general community."

"providing subsidized housing with no required sobriety or treatment, can actually increase violence"

"the Housing First group had a 50% higher mortality rate than the control group." 

The Blue State Homeless Boom

Homelessness kept rising in 2024, as progressive remedies fail

WSJ editorial. 

"In case you missed last Friday’s pre-holiday news dump, the Department of Housing and Urban Development reported that homelessness this year hit a record. Add this to President Biden’s regrettable legacies, though it’s notable that progressive states accounted for most of the increase.

HUD’s annual point-in-time survey found that the number of homeless increased 18% this year and 36% since 2019. Local governments and nonprofits in January counted some 771,480 living in public spaces, shelters or other temporary government-funded housing. Yet the report essentially absolves federal policies of blame.

The agency admits what it calls a “national affordable housing crisis, rising inflation, stagnating wages among middle- and lower-income households”—as if these had nothing to do with the trillions of dollars the feds doled out during the pandemic and then on Mr. Biden’s watch. HUD also faults “the persisting effects of systemic racism,” “additional public health crises” and natural disasters.

HUD places especially heavy blame on the expiration of pandemic programs, including Democrats’ expanded child tax credit and Mr. Biden’s illegal eviction moratorium. Landlords did increase rents to compensate for tenants who didn’t pay under the eviction ban. But the end of souped-up Covid-era welfare can’t explain why there are so many more homeless now than before the pandemic.

One culprit is a surge in migration. New York City told HUD that migrant households accounted for nearly 88% of its increase in homeless living in shelters this year. Chicago reported “that an influx of new arrivals,” mostly migrants bused and flown from other states, “accounted for more than 13,600 people in emergency shelters.”

While migrants have also flooded into Florida and Texas, these states seem to have absorbed them far better. Since 2019 the number of homeless has soared in Illinois (15,633), California (35,806) and New York (65,928), versus Texas (2,139) and Florida (3,034). Higher housing costs and unemployment in progressive states make it more difficult for migrants to support themselves.

Restrictive zoning and environmental regulations reduce housing supply and drive up prices. Compare the number of new housing permits issued last year in Texas (232,373) and Florida (193,788), versus California (117,760), New York (48,807) and Illinois (16,863).

New York City’s “right to shelter” policy also encourages migrants to take advantage of government-supported housing, including hotels in midtown Manhattan. But most migrants who can’t find work and housing eventually move to places where they can.

Most of the increase in what HUD calls “chronic homelessness” owes to mental illness and drug abuse, which the report fails to mention, if you can believe it. This is obvious to anyone who walks past an urban homeless encampment, or for that matter any street in certain neighborhoods in Los Angeles.

Progressives ignore such clear social ills and instead call for more spending on low-income housing. But such “housing first” policies have failed, as demonstrated by the rising number of homeless in progressive states.

HUD spends $72 billion a year, mostly on affordable housing, and progressive states spend billions more each year. California spent $24 billion to reduce homelessness in the last five years, but there are more homeless. The Administration even granted California a waiver to use federal Medicaid funds to help the homeless obtain housing. Meantime, drug rehab centers in the state are closing because of inadequate government reimbursements.

Florida and Texas have taken a more practical and effective approach. They prosecute drug possession and public disorderly conduct as a lever to induce addicts and the mentally ill into treatment as an alternative to jail. This is more humane than leaving the homeless to their own vices on the streets. Alas, progressives prefer the latter."

Autonomy and Affordability: Solving Homelessness Without Coercion

By Jeffrey A. Singer of Cato. 

"A December 12 report in the UK Independent implies Elon Musk thinks most homeless people are “violent drug zombies with dead eyes, and needles and human feces on the street.” That’s an oversimplification, to say the least.

The report claims President-elect Donald Trump wants the government to force homeless people into drug treatment and mental institutions or face arrest. It cites the Trump/​Vance Agenda 47 website:

[W]orking with states, we will BAN urban camping wherever possible.

Violators of these bans will be arrested, but they will be given the option to accept treatment and services if they are willing to be rehabilitated. Many of them don’t want that, but we will give them the option.

We will then open up large parcels of inexpensive land, bring in doctors, psychiatrists, social workers, and drug rehab specialists, and create tent cities where the homeless can be relocated and their problems identified…

…And for those who are severely mentally ill and deeply disturbed, we will bring them back to mental institutions, where they belong, with the goal of reintegrating them back into society once they are well enough to manage.

Both Musk and Trump appear to give short shrift to a major cause of homelessness: a growing shortage of affordable housing. As Vanessa Brown Calder wrote in a Cato briefing paper, “Reforms that eliminate zoning, improve permitting speed, legalize greater housing density, and remove barriers to housing innovations—including co-living units, tiny homes, and manufactured homes—are all part of a successful strategy to reduce homelessness.” Building codes and land use and zoning laws are largely state-level issues.

Another key contributor to homelessness is mental illness. Two-thirds of homeless people have a mental illness, and up to 20 percent of the homeless may have schizophrenia. In many cases, mental illness is the force driving alcohol and illicit drug use. The Substance Abuse and Mental Health Services Administration points out that, in many cases, people with mental health problems “misuse these substances as a form of self-medication.”

Contra President-elect Trump’s proposal, the government coercing people, directly or indirectly, to undergo mental health or drug addiction treatment flagrantly assaults their autonomy. As psychiatrist and civil libertarian Thomas Szasz wrote in his classic work The Myth of Mental Illness: Foundations of a Theory of Personal Conduct, “Involuntary psychiatric interventions violate the fundamental moral and political principles of free societies and turn psychiatric authority into a species of despotism.”

Numerous studies have also failed to find evidence that involuntary mental health treatment is effective. There is some evidence it may increase suicidal tendencies.

Studies on the efficacy of mandatory drug rehab have also had negative results. Compulsory drug rehab has high relapse rates. There is also evidence that it increases the risk of subsequent overdose deaths among people released from rehab.

Enforcing public nuisance laws or penalizing actions like blocking streets, creating public health hazards, or disturbing the peace is not inappropriate or unjust. Incarcerating peaceful people who choose to live unhoused is. And coercing people with substance abuse and mental health problems to undergo treatment assaults their autonomy.

President-elect Trump’s pick for Secretary of Health and Human Services, Robert F. Kennedy, Jr, is seriously interested in reforming the public health agencies. Trump’s pick for the Food and Drug Administration, Dr. Marty Makary, has a history of challenging conventional narratives and welcoming outside-the-box ideas. One reform that both should consider, which can help mitigate the homelessness crisis, is ending the FDA’s Risk Evaluation and Mitigation Strategy (REMS) program it imposes on the drug clozapine—the only drug that the FDA has approved for treatment-resistant schizophrenia.

As Josh Bloom, PhD of the American Council on Science and Health, and I wrote in The Hill last month, “the REMS program has unintentionally created barriers that disproportionately affect individuals with severe mental illnesses like schizophrenia, further compounding the significant challenges they already face, including unemployment, substance abuse, heightened suicide risk and homelessness.”

An estimated 30 percent of schizophrenic patients do not respond to first-line antipsychotic drugs. Yet, clozapine is prescribed to only 4 percent of these patients in the United States—a situation that underscores a significant gap in treatment.

Bloom and I argue that REMS programs mandated by the government are redundant. Once the FDA approves a drug for marketing, manufacturers will monitor it for long-term risks to protect their reputation and avoid liability. Additionally, physicians prescribing high-risk medications routinely monitor their patients, as failing to do so constitutes malpractice.

There are about 653,000 homeless people in the US today. That population could be potentially reduced by 60,000–120,000 with easier access to a long-used, effective drug for schizophrenia. If the incoming Trump administration is serious about reducing homelessness, eliminating the FDA’s REMS program is a good place to start."

Arizona Cities Will Pay a Price for Ignoring Homelessness

Residents can apply for property-tax refunds when officials refuse to enforce public-nuisance laws

By Victor Riches. He is president and CEO of the Goldwater Institute. Excerpts:

"City officials in Phoenix, Arizona’s largest city, have spent years shunting the homeless population into a downtown area that infamously became known as “the Zone.” The city reportedly instructed police officers to leave the Zone alone—not to enforce the law there. As a result it became one of the nation’s largest homeless encampments. For years it has been a chaotic den of panhandling, violent crime and destruction.

Property values plummeted in the Zone. Small businesses suffered. People lost their livelihoods as dozens of business owners had no choice but to close up shop. And even as the city spent over $180 million to address the crisis (only a fraction of which is publicly accounted for), the number of homeless people in Phoenix rose 92% between 2018 and 2023."

"In California . . . The refusal of district attorneys to prosecute crimes allowed lawbreakers to roam free, unhindered by the fear of punishment. Meanwhile, residents struggle under high taxes and crushing regulations. In fact, California has spent $24 billion on its homelessness crisis over the past five years only to see the homeless population increase by about 20%."

"Over the summer, the U.S. Supreme Court struck down what the Journal called a “judge-made right to vagrancy,” ruling in Grants Pass v. Johnson that it isn’t unconstitutional for cities to enforce laws against public camping. Cities across the country now have no excuse not to clean up their streets."

Despite California Spending $24 Billion on It Since 2019, Homelessness Increased. What Happened?

By Lee E. Ohanian.

"Since 2019, California has spent about $24 billion on homelessness, but in this five-year period, homelessness increased by about 30,000, to more than 181,000. Put differently, California spent the equivalent of about $160,000 per person (based on the 2019 figure) over the last five years. With this level of spending, it was reasonable to expect that homelessness would decline substantially. What went wrong?

There are three major problems with California’s homelessness policies that are facilitating this increase. One problem is a significant lack of oversight and information about homelessness spending. The state auditor recently evaluated this spending and submitted a report that highlights the failure of the state to track spending and outcomes:

The State lacks current information on the ongoing costs and outcomes of its homelessness programs, because [it] has not consistently tracked and evaluated the State’s efforts to prevent and end homelessness. . . . [The state] has also not aligned its action plan to end homelessness with its statutory goals to collect financial information and ensure accountability and results. Thus, it lacks assurance that the actions it takes will effectively enable it to achieve those goals.

The auditor attempted to closely evaluate the costs and benefits for five separate homelessness programs, though they only found data that permitted this for two of those programs.

More broadly, the failure of investing in adequate information technology infrastructure and data collection within California’s state government has been a chronic problem and has been very costly. In 2020, California’s antiquated hardware and software within the Employment and Development Department (EDD) was a key factor in about $32 billion in unemployment benefits fraud. The department’s computer system is based on 1980s architecture running 1950s software.

And the EDD not only was overrun with fraudulent claims, it delayed legitimate payments for months. The former deputy director of unemployment insurance described EDD’s ability to deal with the high number of COVID claims as follows: “The best way I can describe it is like going to a gunfight with a squirt gun.”

California’s Department of Motor Vehicles (DMV) is in the process of upgrading its system, but this follows a series of tech upgrade failures over the previous 30 years that burned through hundreds of millions of dollars in the process. And the state’s annual report on its fiscal soundness is chronically late because of an IT upgrade that began in 2025.

A second key problem with California homelessness policy, one that is rarely, if ever, discussed, is that there are too many California households who simply do not earn enough to live sensibly in California, given the state’s very high cost of living. For example, nearly half of California households rent, and of this group, about 30 percent—about 1.9 million households—pay 50 percent or more of their pretax income as rent. This is far too high based on the standard recommendation that a household pay a maximum of 30 percent of pretax income as rent.

This group of people, who are considered “extremely rent burdened,” are remarkably vulnerable to losing their housing. Given that the average household size among renters is about 1.5 individuals, this group represents about 2.8 million people. If just 1 percent of this group become homeless annually because they lose their ability to pay, then the rolls of the homeless will rise 28,000 each year.

And it is not just this group who are financially vulnerable. About one-third of California households live in poverty or near poverty. This suggests the possibility of many more people falling into homelessness each year. An estimated 10,000 people became homeless between 2022 and 2023 in California. If this estimate is accurate, then California has been dodging a bullet in that the number of homeless could be much worse than it is, based on the large number of households who are on the cusp of financial exigency.

These statistics about the number of Californians who don’t earn enough to realistically live here, particularly in the expensive areas near the coast, raise important questions about the state’s approach to homelessness and how taxpayers should view its homelessness safety net. A social safety net exists to provide support for those who experience an adverse event that they cannot realistically insure themselves against. Our homelessness safety net should exist for those who become homeless as a result of family crises, such as a child running away or a family dissolution that results in a parent and children with nowhere to go. It should also exist for those who suffer disabilities and for seniors who may have a limited ability to relocate. However, there is no justification for reliance on the safety net to pay for those who do not have the resources to responsibly live in California.

Perhaps the most important reason that many Californians are financially burdened is housing affordability. The sensible policy response to this is to facilitate building housing in the state that low-income households can realistically afford without significant public assistance. This means building low-cost housing, which likely means utilizing manufactured housing (housing that is built from start to finish within a factory, and then shipped to the homesite)—which can be built at only about $100 per square foot—and building in areas where land values are not so high, which means outside of the state’s very expensive coastal areas. For example, a 1,000-square-foot manufactured home placed on a small lot that is outside of California’s highest-land-cost areas can likely be created for under $200,000. A household earning $50,000 per year, which is far below California’s median household income of over $90,000 annually, could realistically afford such housing on their own.

But the state’s policy toward building housing for the homeless is the opposite of this approach and is the third reason why our homelessness policies are not working as intended. New housing for the homeless can cost over $1million per unit, such as a recently approved Santa Monica 120-unit apartment complex that will cost $123 million to build and which will be located about three blocks from Santa Monica beach. The estimated cost of this complex does not include the value of the land, which might approach $10 million.

The state’s existing practice of building over-the-top expensive housing for the homeless is not fiscally responsible, nor is it feasible within the context of a realistic budget. And reducing building costs to a level commensurate with the budgets of those who are vulnerable to financial risk also means freeing up funds for mental health, drug addiction, and physical therapy services that can help many homeless individuals get back on track.

Investing in adequate information infrastructure, reducing building costs, and investing in low-cost housing outside of the most expensive coastal areas could significantly advance the state’s goals of addressing homelessness while respecting a reasonable budget. But I see no urgency within the state’s political leadership to implement these ideas. In fact, last week, Governor Gavin Newsom vetoed bipartisan legislation that would have required his administration to conduct an annual evaluation of homelessness spending. Without these changes, California will continue to spend enormous sums on homelessness while the number who are homeless remains very high."

The Supreme Court Says Safe Streets Are Constitutional

Six Justices reject the progressive idea that laws against homeless encampments are cruel and unusual punishment

WSJ editorial. 

"The conservatives on the Supreme Court rescued progressive cities on the West Coast from themselves on Friday by overruling lower courts that had created a constitutional right to camp on the streets (City of Grants Pass v. Johnson). You’re welcome, San Francisco. 

Homeless advocates challenged a ban on camping on public property by the city of Grants Pass, Ore. Offenses are punishable by a $295 fine and short stints in jail for repeat violations. Such laws are common across the U.S. But the ever-creative Ninth Circuit Court of Appeals ruled in 2018 that such laws violate the Eighth Amendment’s ban on cruel and unusual punishment.

Six Justices on Friday repudiated this dubious constitutional interpretation. Quoting San Francisco Mayor London Breed, Justice Neil Gorsuch writes that the Ninth Circuit’s “misapplication of this Court’s Eighth Amendment precedents” has undermined public safety and made it harder for cities to encourage the homeless to accept shelter.

Since the 2018 decision, progressives have filed lawsuits across western states covered by the Ninth Circuit to block anti-camping laws. Encampments have proliferated. Vagrants have rejected more than half of San Francisco’s offers of shelter, many citing the Ninth Circuit ruling. A Grants Pass shelter says utilization has fallen by roughly 40%.

The Ninth Circuit’s ruling also said that cities can’t clear encampments unless they have more available homeless beds than people on the streets. Judges have added other stipulations. A federal court in Los Angeles ruled that cities must first provide “adequate” shelter, including nursing staff and security.

However, as Justice Gorsuch explains, “the Cruel and Unusual Punishments Clause focuses on the question what ‘method or kind of punishment’ a government may impose after a criminal conviction, not on the question whether a government may criminalize particular behavior in the first place or how it may go about securing a conviction for that offense.”

The three liberal Justices pointed in dissent to the Court’s anomalous Robinson (1962) decision, which blocked a state law that criminalized drug addiction. The Court in that case held that states can’t criminalize the “status” of being an addict, but said that they could punish drug use by those suffering from addiction.

Anti-camping laws don’t criminalize status. They prohibit certain actions. The plaintiffs in Grants Pass sought to extend the Robinson “rule beyond laws addressing ‘mere status’ to laws addressing actions that, even if undertaken with the requisite mens rea, might ‘in some sense’ qualify as ‘involuntary,’ ” Justice Gorsuch writes.

Addressing homelessness is complex, and if people don’t like their leaders’ policies, they can vote them out. Not so federal judges, who Justice Gorsuch writes cannot “begin to ‘match’ the collective wisdom the American people possess in deciding ‘how best to handle’ a pressing social question like homelessness.”

The Court’s ruling is a boon for constitutional federalism, especially for cities in California struggling to contain the crime, drug use and disorder that come with homelessness. Gov. Gavin Newsom supported the Grants Pass appeal, and he should be grateful."

Why Are Both Homelessness and Homelessness Spending Growing?

By Christopher J. Calton of The Independent Institute.

"Over the past decade, homelessness in California has been rising at alarming rates. California already topped the national list in 2014 when it had a homeless population of 114,000, but according to the Department of Housing and Urban Development’s 2023 Homelessness Assessment Report count, that number has grown to more than 180,000—nearly a 60 percent increase—and an astonishing two-thirds of these individuals are entirely unsheltered. In fact, with a total unsheltered population of 123,423, California is shamefully only about 10,000 shy of the other 49 states combined.

Yet California has spent a record $24 billion fighting homelessness over the past five years, according to a state audit published last month. In other words, the homeless population and homelessness spending have grown in tandem. How is this even possible?

The sad reality is that the current homelessness policy, known as Housing First, virtually guarantees an ever-ballooning homelessness budget, regardless of how effective it is in reducing the homeless population. This is because the measure of success under Housing First is not independent self-sufficiency, but in homeless persons becoming de facto wards of the state.

In 2013, the federal government adopted Housing First as its approach to homelessness, and California followed in 2016. This means that both state and federal homelessness grants are reserved exclusively for providers who comply with Housing First principles.

The Housing First philosophy contends that the most effective way to address homelessness is to offer people immediate, no-strings-attached housing. Service providers forfeit their grants if they make housing conditional on, say, sobriety or participation in treatment programs. In theory, supportive services are voluntary, but in practice they are almost non-existent.

Instead, California’s approach to Housing First entails little more than warehousing people in permanent-supportive housing (PSH) units. PSH residents are not classified as “homeless” for official counts, but they remain dependent on taxpayer support, which is paid out of the homelessness budget.

We did not always treat permanent dependency as the best-case scenario for homeless individuals. When the Clinton administration first established the continuum of care system for homelessness services in 1994, the Department of Housing and Urban Development explicitly stated that “the goal of the comprehensive homeless service system is to ensure that homeless individuals and families move from homelessness to self-sufficiency, housing, and independent living.”

When Sam Tsemberis, a clinical psychologist, conducted the first Housing First experiment in New York City, he altered the measure of success to “housing stability,” achieved not through self-sufficiency, but through perpetual subsidies. Tsemberis found that 88% of his clients remained stably housed, compared to 47% of patients in treatment-oriented programs. However, Tsemberis worked exclusively with people suffering from severe mental illnesses—those who would have been institutionalized in an earlier era—so it is reasonable that perpetually subsidized housing may have been the best possible outcome for this particular subset of the homeless population.

But should permanent dependency be the goal for all homeless persons? In FY 2022-2023, California spent $116 million on permanent-supportive housing for homeless youth. A policy that functionally treats homeless and at-risk children as lost causes is not only financially unsustainable, it’s downright inhumane.

A significant portion of homeless individuals suffer not from incurable mental illness, but from untreated substance-use disorder, and the overdose mortality rate of PSH residents is disturbingly high. But studies of crack-addicted homeless persons in drug-abstinent housing, work therapy, and day treatment programs found that upon completion, roughly half of the participants remained sober, housed and stably employed. Yes, “housing stability” was lower than Housing First experiments, but independent self-sufficiency is an unquestionably better outcome for those capable of achieving it.

We can accept that there will always be people who require permanent assistance, but state policy should not treat this assumption as universal. Even if we could end homelessness by permanently warehousing people, we should strive to do better.

But after following the Housing First playbook for nearly a decade, the results are clear: the more money we spend on this strategy, the faster the homelessness crisis grows."

Minimum Wage Laws Increase Homelessness, New Study Finds

For many struggling people, a lower-paying job is not “exploitation.” It’s a lifeline.

By Jon Miltimore of FEE. Excerpts:

"Separate research, however, suggests California’s own policies have exacerbated its homelessness epidemic, including a new paper written by University of California economist Seth J. Hill titled “ Minimum Wages and Homelessness ” published last month.

Utilizing data from the Department of Housing and Urban Development and other sources, Hill examined 100 cities from 2006-2019 to determine the relationship between wage floors and homelessness. The findings are bleak.

“Merging administrative data from HUD to state and local minimum wage laws suggests that minimum wages induce increases in homeless counts,” Hill writes. “When cities raise their minimum wage by 10%, relative homeless counts increase by three to four percent.”

Hill’s paper will not be the last word on the relationship between minimum wage laws and homelessness, but it provides yet more evidence of a stubborn reality minimum wage proponents often overlook: Minimum wage laws often harm the very people they are designed to help.

For decades, it was an all but universally accepted economic gospel that increases in the minimum wage came with adverse trade-offs. Many economists often pointed out these adverse consequences, including job losses, often fell on workers with the least skills and those who were the least valued.

“Among the effects of a minimum wage law, when it is effective, is that many unskilled and inexperienced workers are priced out of a job, when employers do not find them worth what the law specifies,” the economist Thomas Sowell once observed.

This is why even left-leaning publications such as the New York Times, until relatively recently, conceded that using minimum wage laws to combat poverty was an “old, honorable — and fundamentally flawed” idea because it would “price working poor people out of the job market.”

That minimum wage hikes increase unemployment was once hardly a debatable subject among economists, and even today a scouring of the literature shows that a “clear preponderance” of the scientific research shows a job-killing impact.

So in light of this evidence and the more recent UCSF findings, Hill’s conclusion should not surprise us.

“To the extent minimum wages cause disemployment of low skill-workers, the lost job can exacerbate existing economic insecurity and lessen ability to pay for housing,” he writes.

This finding is not just tragic but ironic. Politicians and wage-justice fundamentalists, who take pride in the idea they are fighting poverty by advocating for higher minimum wage laws, are not just costing countless lower-skilled workers jobs. They are actually pushing many of them into homelessness.

Again, this should not be a surprise. Decades ago, the economist Murray Rothbard famously observed the absurdity in the idea that banning jobs was a path to prosperity.

“Remember that the minimum wage law provides no jobs,” Rothbard wrote , “it only outlaws them; and outlawed jobs are the inevitable result.”"

“Housing First” Homeless Policy Gets a Critical Look

By Vanessa Brown Calder.

"“Housing First” homeless policy is drawing new critical attention. A NYTimes article reports the predominant homeless policy philosophy is drawing criticism from Republican policymakers, conservative think tanks, as well as groups (like programs that require sobriety) that have been denied funding by the no‐​strings‐​attached permanent housing philosophy.

Meanwhile, a new Politico article details how red and blue state policymakers are desperate to avoid becoming another San Francisco, “with rents and home prices that are unaffordable for many residents and intractable waves of homelessness” and so are proposing or adopting zoning reforms to increase supply and reduce rents.

It is a good thing that Housing First is receiving a closer look by researchers and policymakers, because Housing First has sailed along for the last 20 years or so with minimal scrutiny. As we detail in a recent Housing First study, Housing First locations like California and Utah have been unsuccessful in reducing homeless counts under the policy. On the contrary, chronic homelessness in these states has grown substantially (93 percent and 95 percent) since policy adoption.

Moreover, the most recent reporting indicates that Housing First continues to fail at reducing homelessness in these places. Yesterday, a NYTimes article reported that the homeless population in Los Angeles had grown another 9 percent compared with a year ago, and a new report from Utah’s Department of Workforce Services found that chronic homelessness nearly doubled since 2019.

Comprehensive regulatory reform to increase housing supply is an important part of the answer to homelessness. But although many policymakers are considering pro‐​housing, there is a long way to go. The Washington Post reports that “many ‘progressive cities’ have cracked down on unsheltered homeless adults…without ‘addressing structural issues, like lack of housing.’” Some policymakers, like Colorado Governor Polis, have proposed a variety of excellent regulatory reforms, so far without successful adoption.

Lack of affordable, available housing is an important factor driving homelessness. Though Housing First prioritizes permanent housing subsidies for the homeless, it doesn’t prioritize the policy reforms needed to keep housing accessible and affordable so that people stay in their homes to begin with. From this perspective, “Housing First” is a misnomer and policymakers would do well to rethink it."

California Spent $17 Billion on Homelessness. It’s Not Working.

The Wood Street encampment for years drew people with nowhere to live, until a fire made finding a solution an urgent—and frustrating—task

By Christine Mai-Duc and Jim Carlton of The WSJ.  

The article mentions that California has 115,000 unsheltered homeless people and it spent $17 billion combating homelessness in the past four fiscal years. That is $147,000 per unsheltered homeless person or about $37,000 per year. I don't know how many other homeless people there are but apparently they are not all unsheltered. What the cost per person for all of them is not clear but $37,000 per year does seem high.

Excerpts:

"The number of homeless people in California grew about 50% between 2014 and 2022. The state, which accounts for 12% of the U.S. population, has about half of the nation’s unsheltered homeless, an estimated 115,000 people, according to federal and state data last year. It also has among the highest average rent and median home prices in the U.S."

"California spent a record $17 billion combating homelessness in the past four fiscal years. For the state budget year starting in July, Gov. Gavin Newsom has proposed another $3.7 billion. 

Voters in Los Angeles and San Francisco, which have some of the largest homeless populations in California, were unhappy enough about it to approve taxes costing them billions of dollars to fund anti-homelessness programs and housing in recent years. So far, cost overruns and delays have left little to show for the money.

State and local officials have bickered over responsibility. Mr. Newsom late last year threatened to withhold funding from local governments that he believed weren’t attacking the problem aggressively enough. That included programs to move squatters, willingly or not.

Local leaders said the Newsom administration hasn’t provided enough stable funding for programs to treat and house the homeless."

"authorities are stuck in a cycle of clearing out encampments and scattering people who find another spot to gather."

Evidence Likewise Calls California’s “Housing First” Homelessness Strategy into Question

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

"A recent Cato blog examined the effects of Utah’s “Housing First” policy, which aims to provide the chronically homeless with permanent housing without requiring treatment for mental health issues or substance use disorder. The Biden administration recently unveiled a new federal plan to address homelessness that rests on this philosophy, so the outcomes in Housing First states are worth considering. Unfortunately, in Utah, the original “Housing First” state, data indicates that chronic homelessness and overall homelessness have grown significantly two decades after policy implementation.

California is another state that put Housing First at the center of its homeless policy response, and the state provides another case study. California began its foray into Housing First policy when San Francisco implemented a policy based on Housing First principles called “Care not Cash.” Then‐​County Supervisor Gavin Newsom pushed the policy, which diverted funding away from cash benefits for the homeless and towards building permanent housing and shelters.

Then, in 2016, California adopted Housing First statewide. As a result, California now requires any state‐​funded homeless program to abide by the principles of Housing First, including allowing tenants to stay housed regardless of substance use. Governor Newsom revamped these efforts in 2020 with the introduction of Project Homekey, a program that aims to convert existing buildings into permanent supportive housing.

These efforts have proven expensive, and California has spent $3.7 billion on the Homekey program since announcing it in 2020. Cities are spending millions of their own money as well: San Diego spent over $62 million on permanent supportive housing between 2010 and 2018, significantly more than the $30 million it spent in that same period on homeless shelters.

However, despite the significant funding commitment, California’s chronically homeless and homeless population continues to grow. Chronic homelessness in California fell by 51 percent between 2005 and 2016 (see Figure 1), but the trend reversed after 2016, the year Housing First was implemented statewide. Between 2016 and 2022, chronic homelessness increased by 93 percent, reaching levels not seen since 2005."

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."