Homelessness in America: What should we do?

November 1, 2019

Homelessness in America: What should we do?


  • Mental illness and substance abuse are leading causes of homelessness in America.
  • Homeless policy must be two-pronged. One, we need local law enforcement regimes that discourage rather than encourage homelessness. Two, we need social welfare policies that get to the core of the problem.

Snapshot of homelessness in America

The number of homeless in the United States is derived from a point-in-time estimate done through Housing and Urban Development’s (HUD) Continuums of Care. On one day, usually in late January, all localities receiving HUD assistance are required to do counts in their locality and report the results.

The totals for 2019 are:

  • 567,715 nationwide
  • 211,293 unsheltered (37 percent)
  • 356,422 sheltered (63 percent)

The average rate of homelessness nationwide was 17 homeless individuals per 10,000 in population.

Four states and the District of Columbia accounted for 45 percent of the total:

  • District of Columbia: 5.8 times the national rate
  • New York: 2.8 times the national rate
  • Hawaii: 2.7 times the national rate
  • Oregon: 2.0 times the national rate
  • California: 1.9 times the national rate.

“Poor people who have family ties, teenage mothers who have support systems, mentally ill individuals who are able to maintain social and family relationships, alcoholics who are still connected to their friends and jobs, even drug addicts who manage to remain part of their community do not become homeless.”

Alice Baum

California accounted for 47 percent of the nation’s total unsheltered homeless.

Who are the homeless?

One of the challenges of producing public policy targeted to homelessness is the absence of any rigorous and consistent work characterizing this population.

The following is provided in the recent report from the Council of Economic Advisers “The State of Homelessness in America”:

  • Mental illness – 20 percent
  • Substance abuse – 16 percent
  • Disability – 44 percent

However, the CEA reports other studies that report the following:

  • Mental Illness – 39 percent
  • Substance abuse (drugs) – 26 percent
  • Alcohol abuse – 38 percent

According to the National Alliance on Mental Illness, an estimated 26 percent of the homeless suffer serious mental illness.

Just looking at mental illness and substance abuse gives a sense of how tenuous our understanding is of who are the homeless.

According to one set of CEA estimates, 36 percent (20 percent + 16 percent) of homeless suffer from mental illness or substance abuse. According to other data reported in the study, mental illness and substance abuse total 65 percent (39 percent + 26 percent). The latter does not include the estimate for alcohol abuse with substance abuse. Nevertheless, there is a difference of 81 percent between the two combined estimates.

It is a challenge to produce public policy to address a targeted population when we cannot, with some precision, define the targeted population.

Economic distress is another reason commonly accepted as an explanation for homelessness. People are in the street because they can’t afford housing is the reasoning.

Various academic studies correlate housing costs and rent increases with homelessness.

But Christopher Rufo of the Discovery Institute writes in the Manhattan Institute’s City Journal, regarding the situation in Seattle:

“According to King County’s point-in-time study, only 6 percent of homeless people surveyed cited ‘could not afford rent increase’ as the precipitating cause of their situation, pointing instead to a wide variety of other problems – domestic violence, incarceration, mental illness, family conflict, medical conditions, break-ups, eviction, addiction, and job loss – as bigger factors.”

Rufo continues:

“Further, while the Zillow study did find correlation between rising rents and homelessness in four major markets – Seattle, Los Angeles, New York, and Washington, D.C. – it also found that homelessness decreased despite rising rents in Houston, Tampa, Chicago, Phoenix, St. Louis, San Diego, Portland, Detroit, Baltimore, Atlanta, Charlotte, and Riverside. Rent increases are a real burden for the working poor, but evidence suggests that higher rents alone don’t push people into the streets.”

Manhattan Institute scholar Heather MacDonald writes in City Journal, in a profile of the homeless situation in San Francisco:

“An inadequate supply of affordable housing is not the first thing that comes to mind when conversing with San Francisco’s street denizens. Their behavioral problems – above all, addiction and mental illness – are too obvious. Forty-two percent of respondents in the city’s 2019 street poll of the homeless reported chronic drug or alcohol use; the percentage is likely higher.”

Although public policy should be such to optimize the supply of housing at the best possible prices, to attribute inadequate supply of housing as the driving cause of homelessness is like attributing inadequate supply of oxygen as the driving cause of asthma. The core of the problem is one side of the consumer and not on the side of supply.

What public policy do we need to deal with homelessness?

1. Policy to date

To date, public policy for homelessness has had the characteristics of other public policy for various social ills – more government and more public expenditures.

HUD spending on homelessness in 2019 will be $2.6 billion, an increase of $1 billion over where it was a decade earlier. The Veterans Administration is the source of another $1.8 billion of funding targeted to homeless veterans.

Urban areas with pronounced homelessness problems have been spending considerable amounts of funds.

Most recently annual expenditures in New York City was $3 billion, Seattle $1 billion, Los Angeles City and county governments $600 million, and San Francisco $360 million.

Yet since 2009, homelessness in San Francisco has increased 18 percent, 35 percent in Seattle, 50 percent in Los Angeles, and 59 percent in New York.

Nationwide over this period, the number of homeless is reported to have dropped by 12 percent with an increase of 66 percent in HUD expenditures.

However, the CEA report questions the reliability of this 12 percent reported decline.

Per the CEA, “…..reduction in homeless counts from 2007 to 2018 …are largely artificial, a result of (1) transitional housing being defined as ‘homeless’ but similarly time-limited rapid-rehousing not being defined as ‘homeless,’ and (2) miscounting of unsheltered homeless people.”

The main thrust of federal homeless funding over the last decade has been permanent supportive housing and rapid rehousing. Transitional housing has been de-emphasized.

According to Homestretch, a non-profit organization whose mission focuses on the homeless, “….over the last few years, HUD homeless services funding for families has shifted almost exclusively to rapid rehousing and permanent supportive housing. In many locations across the nation…..transitional housing has been all but eliminated.”

The operative guideline for permanent supportive housing has been “Housing First.” This policy, as characterized in the CEA report, is “homeless individuals are provided supportive housing with no pre-conditions, and do not face requirements as a condition for retaining housing even after they have been stabilized.”

The criticism of “Housing First” and the emphasis on rapid rehousing and permanent supportive housing is that it ignores the root causes driving homelessness and by supplying unconditional housing just encourages perpetuation of the dysfunctional behavior which led to the problem to begin with.

CEA is critical of the policy from a macroeconomic point of view. That is, it ignores the impact on the overall homeless population. Moving individuals out of shelters or off the streets into government supplied housing increases the supply of homeless opportunities – i.e., shelters and the street – to others looking for these opportunities. That is, it actually increases the supply, and hence use, of homeless options.

Overall, according to CEA, Housing First performs no better than other alternatives and costs more.

According to the only study that has examined the impact of Housing First and permanent supportive housing on the overall homeless population, “10 additional permanent supportive housing beds reduces the homeless population by about 1 person.”

Per Homestretch, the measures of success of rapid rehousing are deeply flawed because they ignore what has happened to families after they exit the program. Studies which examine where families are six months after they have exited show dismal results. In one study, for instance, “only 53 percent of families rapidly rehoused between 2009 and 2012 remained housed after their rental assistance ended.”

2. What should we do?

As Stephen Eide of the Manhattan Institute notes, “Most would agree that any policy response requires both social welfare and law-enforcement dimensions.”

That is, homeless policy must be two-pronged.

One, we need local law enforcement regimes that discourage rather than encourage homelessness.

Two, we need social-welfare policies that get to the core of the problem. What are the social, economic, and psychological dynamics that drive an individual to a homeless existence?

Law Enforcement

Regarding law enforcement, there is much that should be of concern.

Manhattan Institute’s Heather MacDonald’s recent portrait of San Francisco paints a picture of a local regime which empowers rather than discourages homelessness and anti-social behavior.

The new district attorney of San Francisco is an avowed Marxist and has stated “Crimes such as public camping, offering or soliciting sex, public urination, blocking a sidewalk, etc. should not and will not be prosecuted.”

According to Manhattan Institute’s Stephen Eide, “Between 2010 and 2018, annual misdemeanor adult arrests in New York City fell by 49% (250,299 to 128,194). From 2010 to 2017, annual adult misdemeanor arrest fell 21% in Los Angeles (211,639 to 167,261) and 25% in San Francisco (10,460 to 7,831).

Of concern should be a recent decision by the 9th Circuit Court of Appeals, Martin v City of Boise, which struck down the “Camping and Disorderly Conduct Ordinances” of the city of Boise, Idaho, finding them to be “cruel and unusual punishment.”

According to the court, “as long as there is no option of sleeping indoors, the government cannot criminalize indigent, homeless people for sleeping outdoors, on public property, on the false premise they had a choice in the matter.”

Social-Welfare Policy

The individual realities of the half million homeless in America are diverse and complex. A one size fits all government spending program is a disservice both to the homeless and to U.S. taxpayers.

Although we can list characteristics that generally define the homeless – mental illness, addiction, family breakdown, economic distress, etc. – most in the country who have these problems are not homeless in the street. There is an extra reality layered onto these problems that ultimately drives an individual to a homeless existence.

Christopher Rufo quotes Alice Baum and Donald Burnes from their book on homelessness as follows:

“Homelessness is a condition of disengagement from ordinary society – from family, friends, neighborhood, church, and community….Poor people who have family ties, teenage mothers who have support systems, mentally ill individuals who are able to maintain social and family relationships, alcoholics who are still connected to their friends and jobs, even drug addicts who manage to remain part of their community do not become homeless. Homelessness occurs when people no longer have relationships; they have drifted into isolation, often running away from the support networks they could count on in the past.”


  1. The City of Boise has petitioned the U.S. Supreme Court to review the 9th Circuit decision in Martin v City of Boise. Efforts should be made to work on all fronts to encourage that this case should be reviewed and overturned.
  2. Although homelessness will always be driven by local political realities, these localities overwhelmingly receive federal funds. The federal government should implement a zero-tolerance policy regarding public anti-social behavior – sleeping in the street, panhandling, etc. – as a condition for receiving federal funds.
  3. Housing deregulation, as recommended by the CEA, is a positive step in public policy. Deregulation will increase the supply of housing. But we do not see this as a solution for homelessness.
  4. The goal of homeless policy should be to get individuals off the streets and into temporary facilities where individuals are screened, their problems defined, and moved off for further care to the proper next stage – be it drug/alcohol/substance treatment, psychological care, or work counseling.
  5. Eliminate minimum wage laws to open a universe of entry-level work opportunities. Local governments should work with local business to brainstorm these types of opportunities.
  6. Eliminate laws and regulations which hamper the ability of religious institutions to work with the homeless.
  7. Encourage policies at the national and local levels which restore respect for the importance of family and traditional values.

Read more about this.


Homeless policy must be two-pronged. One, we need local law enforcement regimes that discourage rather than encourage homelessness. Two, we need social-welfare policies that get to the core of the problem.

March 2, 2021 By Star Parker
Homelessness in America: What should we do?
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