There are as many homeless people in the world’s wealthiest country as the entire population of Boston: according to the latest release of the Annual Homelessness Assessment Report, 650,000 people lack stable housing in the US.
However, the actual numbers could be much higher if, for example, the growing number of students struggling to pay rent who sleep in vans, cars, and shelters were accounted for.
This data is a still-picture estimate of a complex problem that may conceal some of the problem’s ramifications. The annual report on homelessness for 2023 is a “point in time count,” estimating that, on a single night in January 2023, 653,000 people were homeless in the US. The report relies on volunteers manually going through the count and the estimates shared by shelters and other homeless services:
“While imperfect, the report’s point-in-time estimate has provided a picture of the country’s homeless population annually since 2007. The 2023 point-in-time count found the highest number of people experiencing homelessness on a single night in the US since the survey began, with an increase of more than 12% over 2022’s estimate. That equates to an additional 70,650 people experiencing homelessness year over year.”“The 25 US Cities With Largest Homeless Populations,” US News (December 27, 2023)
The stigma of chronic homelessness
The majority of those suffering chronic homelessness in 2023 lacked a van or another place to safely sleep at night, sleeping mainly in tents, streets, or cars, rather than in RVs or temporary housing (like tiny house shelters, for example). Around 40% of people in the estimate were unsheltered, and more than half of them were in major US cities (which also means that half of the unsheltered homeless are currently based outside big cities).
Some of the unhoused living on the street refuse to enter any shelter program, though an unestimated portion of them would enter emergency shelters and transitional housing programs if they were given the opportunity. The step above to abandon the cycle of homelessness, permanent supportive housing, simply doesn’t exist as an option for most people lacking stable housing.
During the last decade, the previous passivity to tackle homelessness morphed into social frustration and pressure on local constituents to concentrate on the phenomenon and finally address it. The number of homeless people grew by 12% in 2023 compared to 2022, a 48% increase from 2015. The crisis existed before, especially in cities where historical permissivity, high cost of living, social tolerance, and mild weather perpetuated smaller pockets of homelessness.
Recently, somebody asked on the news aggregator about technology from Y Combinator, Hacker News, what some “homeless shelter innovations” were. Most of the responses didn’t elaborate on which types of shelter could be innovative but on policies that could be effective (or had been proven effective elsewhere). One of the commenters noted:
“The solution for homelessness isn’t something like a sleeping pod or capsule hotels. The solution for homelessness is 3-fold: secure, stable housing; free mental health care, substance abuse care; reliable and robust public transportation. Without those 3 things minimum, any other solution to the homelessness crisis will not succeed.”
Americans do care about homelessness
When asked about identifying the most important problems the US faces nowadays, Americans list Poverty/Hunger/Homelessness as the fourth most important issue, just after “poor leadership,” “immigration,” and “unifying the country” (Gallup, January 2024).
A Pew Research survey from June 2023 asked people a similar question while assigning them a political leaning. All important issues had a dramatic divide among sympathizers of one or the other party, with the exception of “drug addiction,” the quality of schools, and the ability (or lack thereof) of Democrats and Republicans to work together. The border crisis, for example, has shown that Partisan interest in keeping issues that could erode the current Administration as the elections get closer (something acknowledged even by a WSJ editorial) prevented bipartisan measures to be approved.
Homelessness, drug addiction, unemployment, and mental illness are associated with the narrative of the so-called “deaths of despair,” though this notion has come under scrutiny as some of its apparent findings don’t hold as well as the narrative described: more than middle-age whites dying at a higher rate than other demographics from alcohol, drugs, or suicide, a more careful look at the data shows what looks “more like a medical crisis than a social one:
“And if the lethality of new drugs is even partly to blame, America is in trouble: dealers have started lacing fentanyl with ‘tranq,’ a horse sedative that causes flesh wounds, and nitazenes, a Chinese-made opioid more than 40 times as potent as fentanyl. Such cocktails will kill even more people, even more quickly.”The deaths-of-despair narrative is out of date, The Economist (December 23, 2023)
Are high rents a part of the problem?
How does homelessness relate to the issues associated with destitution and deaths of despair? A study from the Stanford Institute for Economic Policy Research about homelessness in California brings some concrete numbers: in 2020, about 25% of all homeless adults in LA County had severe mental illnesses (psychotic disorder, schizophrenia, bipolar disorder) and 27% experienced long-term drug addiction:
“Moreover, a higher percentage of so-called chronically homeless1 have drug addiction, a severe mental illness, or both.”
Easy access to drugs may explain some of the biggest pockets of urban chronic homelessness in the US:
“While six of every ten individuals experiencing chronic patterns of homelessness in unsheltered locations were in major cities (61%), fewer than one in ten (6%) of individuals experiencing unsheltered chronic homelessness did so in largely urban areas that do not contain one of the 50 largest cities. One in every five individuals experiencing chronic homelessness was in largely suburban CoCs (20%), and more than one in ten were in largely rural CoCs (14%).”The 2023 Annual Homelessness Assessment Report (AHAR) to Congress, Tanya de Sousa, Alyssa Andrichik, Ed Prestera et al. (December 2023), p. 83
Perhaps the most important part of the study is what it leaves out. If breathtakingly high, less than half of the people experiencing homelessness suffer from chronic mental illness and chronic drug addiction, though this group is the most visible in cities and the one causing the biggest disruption in the societal fabric. The lack of affordable housing options in entire metro areas also plays a role in the crisis. According to Forbes, the housing supply had hit an all-time low by the end of last year, with a 14.2% drop in year-over-year housing supply.
As rising rates are preventing first-buyers from accessing housing, investors keep buying houses, often in all-cash operations. As a consequence, rents are near an all-time high in several metro areas. A recent study by the University of San Francisco regarding homelessness points to high rents (and the inability to pay them—or the inability to show solvency in order to rent) as a main contributor to homelessness.
All the things that sometimes go wrong
Drugs and mental illness are far from being the only problem making things worse. Studies don’t tend to indicate who, among homeless adults battling alcohol or drug addiction, were already abusing substances before becoming homeless or the problem really developed to cope with destitution and disenfranchisement. According to Frank Gallo, a member of the Apartment Association of Greater Los Angeles:
“This distinction is tremendously important because either of these addictions would result in insufficient income, health problems, irresponsible or violent behavior, and job losses.”
More than half of the people in California lacking stable and safe housing didn’t end up in a campervan, car, or in a tent on the street due to drugs or a mental crisis; moreover, we talked with people over the years who shared their story with us, sometimes asking us not to record for fear of losing the spot where they had been parking the campervan, truck, or car they called “home.”
At *faircompanies, when covering homelessness for Kirsten’s YouTube channel, we have talked to temporary workers, students unable to pay high rents, divorced middle-aged men unable to pay their rent, let alone spousal support and child support; and a myriad of nuanced cases in which people weren’t able to rent an apartment or room even when they could, due to a criminal record, a bad credit rating (due to credit card debt, unpaid debt to third parties or the IRA, etc.), and similar situations preventing them from getting back on track.
Another category of unhoused people is growing at alarming rates: that of immigrants arriving at the southern border from Central America and South America (from Venezuela in particular), then sent by bus to places such as New York City, where hundreds of people arrive in the city each day.
The other unhoused
Homelessness matters to Americans as it has become more visible and generalized across the country, spreading from the traditional enclaves in coastal progressive cities to cities, suburban and even rural communities across the United States. Despite becoming a priority to voters from across the political spectrum, homelessness still makes the news when the problem is so dire that it requires political action to, for example, relocate people living in oversized tent encampments where drug use and mental illness may be especially dire: Portland, Los Angeles, San Francisco and even Phoenix have closed some of these encampments due to pressure from neighboring communities, businesses, and constituents.
We are familiar with what has been happening in all the mentioned cities. When we visited Phoenix recently, we talked to architects and housing advocates about the homelessness crisis the city had recently experienced; the city’s main homeless encampment, known as “The Zone,” grew so big (15 city blocks from Seventh Avenue to 15th Avenue and Van Buren Street to Grant Street) and dangerous that the city was court-ordered to clear it out. Its more than 1,000 unhoused inhabitants seeking assistance were oriented by the Human Services Campus (HSC), composed of 16 organizations, and those willing to do so were helped with relocation, according to city officials and members of the mentioned HSC.
Despite efforts by cities across the US to provide some sort of food and shelter, as well as health checks and advice on how to seek employment, a more dignified shelter—and, eventually, housing—, homelessness remains a poignant issue in several of the major metropolitan areas beyond the traditional enclaves in coastal cities:
“According to the city, the average wait time for single adults to be reassigned a shelter bed is eight days. Some wait weeks. New York City has taken measures to limit the number of people who end up sleeping on the streets and in trains while they wait for a bed, subcontracting a handful of churches and mosques to provide floor space or a pew to hundreds of people each night.”“Bused From Texas to Manhattan, an Immigrant Struggles to Find Shelter,” ProPublica (February 7, 2024)
Housing First versus treatment first
According to the Joint Economic Committee Social Capital Project, New York (one of the metropolitan areas where it’s more expensive to live) experiences the highest rate of homelessness in the United States (47 people per 10,000, more than twice the national average of 18 people per 10,000). Hawaii (at 46 per 10,000), California (41 per 10,000), and Oregon (35 per 10,000) are also way above the national average.
In States like California, the period between 2005 and 2016 saw a 51% fall in chronic homelessness, though the trend reversed sharply after 2016, which is the year that the program prioritizing housing over treatment for mental illness and drug or alcohol addiction, Housing First, was implemented statewide. Between 2016 and 2022, chronic homelessness increased in California by 93%, and it reached levels “not seen since 2005.”
According to the California Department of Housing and Community Development, under the Housing First approach, “anyone experiencing homelessness should be connected to a permanent home as quickly as possible, and programs should remove barriers to accessing the housing, like requirements for sobriety or absence of criminal history.”
Even if factors like the COVID pandemic and housing costs have affected the rise in homelessness, some advocates advising the US Congress believe that the program Housing First has been detrimental to previous advances and mental illness and addiction need to be treated in parallel with finding dignified, stable housing instead of permanent or semi-permanent shelters to relocate people on the street. Yet the
Whereas the “housing first” policies haven’t worked as expected across the US, the discussion over “housing first” versus “residential treatment” first risks becoming controversial. A 2011 medical study tries to quantify if those placed in transitional housing while being treated for mental illness and addiction achieve higher success outcomes than people immediately placed into independent housing, no questions asked:
“A total of 709 participants (131 and 578 participants in the respective groups) were assessed every 3 months for 2 years on housing outcomes, community adjustment, work and income, mental and physical health, and health service costs. Clients who received immediate, independent housing had more days in their own place, fewer days incarcerated, and reported having more choice over treatment; but no differences on other clinical or community adjustment outcomes. In this observational study, there were no clinical advantages for clients who had residential treatment or transitional housing prior to entry into community housing, but they incurred higher substance abuse service costs. Studies using randomized controlled trials of these conditions are needed to establish causation.”“A multi-site comparison of supported housing for chronically homeless adults: ‘Housing First’ versus ‘residential treatment first,'” Tsai J, Mares AS, Rosenheck RA, Psychol Serv. (August 7, 2011).
Housing First in Helsinki and Vienna
Years after the study and the implementation of Housing First, support for “treatment first” policies is growing in California and across the country, as the links between new synthetic drugs and homelessness are visible for anyone to observe in the open air across major American cities, a sharp contrast with other wealthy countries that have tackled homelessness successfully using very similar policies.
Why cities like Helsinki, in Finland, and Vienna, in Austria, were capable of dramatically reducing the number of people living in the streets using “housing first” policies?
The response may be in how different high trust, low crime societies with a more homogeneous and much smaller population than the US, like the mentioned Finland and Austria, also have a robust social service sector and a more gregarious, less individualistic society as a whole. Universal healthcare and a careful follow-up in rehabilitation programs may account for at least a significant part of the success unseen in California, where the Housing First program hasn’t worked as expected. Social cohesion, higher social trust in institutions, and a more effective medical follow-up may be the difference between the same policy on paper, applied in California versus Finland (which has become a case study) or Austria.
The same stark difference in outcomes can also be observed in the broadest examples of drug decriminalization as a broad policy applied across a given territory. While the policy achieved astounding success in Portugal, the same drug decriminalization measures prioritizing a more humane interaction with those experiencing addiction and prosecuting drug traffickers, in place in Oregon since 2020, have exacerbated drug overdoses and homelessness rates in Portland. The policy has been deemed a failure by Oregonians, frustrated by what they see on the streets.
Decriminalization succeeds with a case-by-case follow-up
What political pundits and commentators in Oregon and the US miss when they compare the outcomes of Portugal versus Oregon, is how different both policies both were once in the works:
“Even as Portugal ended prison time for drug possession, it created a unique system that pushed people to stop using drugs — sometimes with the continued threat of penalties, like the revocation of a person’s professional license. Oregon didn’t plan to enact similarly tough penalties, and advocates for decriminalization did not have a clear explanation for why their law would work as well as Portugal’s.”
In Oregon, drug decriminalization wasn’t accompanied by a follow-up of individual cases; as people who would have faced prison time for drug possession understood that there wasn’t any negative externality in continuing with their habit, few were able to leave the cycle. As a consequence, drug use has overrun public spaces in several Portland areas; overdose deaths are also more common than before 2020:
“A crucial part of Portugal’s change in 2000 was its attempt to nudge people to stop using drugs. The country did not simply decriminalize the substances. It also set up new incentives for seeking help: People caught using drugs can be sent to a special commission that tries to get them into free treatment. If drug users do not cooperate or they show serious problems, the commission can impose penalties, such as barring people from taking some jobs or visiting certain locations. It is a carrot-and-stick approach.”“From Portugal to Portland,” New York Times (January 12, 2024)
Personal accountability and exhaustive follow-up are also at the forefront of Finland’s Housing First policies. Each person accessing the policy becomes legally a tenant with a contract, and the need to pay rent, often applying simultaneously for a housing benefit. The approach, offering rights but demanding responsibilities to every tenant, is paying off, making Finland “the only EU country where homelessness is falling,” explained Jon Henley in The Guardian in mid-2019.
Providing apartments versus shelters
Housing First programs are costlier than temporary shelters, and they may be falling short in addressing underlying problems among a significant percentage of those experiencing homelessness. In California, the Shelter Plus Care program tries to combine access to emergency shelters and the treatment of underlying problems. Despite the existence of such problems, many people avoid emergency shelter programs due to their institutional aspects, as we saw when we visited different facilities in Los Angeles a few years back.
The combination of transitional shelters and treatment for trauma, mental illness, and addiction has proven effective as an alternative to costly housing in States like California, where housing prices and inventory shortages make it especially difficult to offer subsidized rents of apartments made affordable through rental assistance.
Homelessness is also controversial, and its perception (as it also happens with immigration and the border security crisis) is contrasted across party lines, with some wanting to capitalize on the social discontent it generates. But homelessness doesn’t only affect progressive cities and is expanding to suburban areas.
Citizens and policymakers lack the feedback of consistently updated, properly structured information resources regarding homelessness. Shrinking ad revenue and media layoffs reduce public opinion exposure to investigative journalism pieces on homelessness. How many articles have you seen reporting what cities across the US are doing vs. other parts of the world? How many op-ed articles ask why comparably poorer EU places can tackle homelessness more efficiently, at a fraction of the cost and human suffering?
The cities that are curving the epidemic
Which parts of the crisis are economic and structural, which ones were exacerbated due to black swan events like the 2008 financial and housing crisis and the COVID epidemic in 2020-2022, and which others are related to mental health and addiction? What’s the average age of people experiencing the issue? Why rates of older people with no place to go are growing in some metro areas?
According to the mentioned 2023 Annual Homelessness Assessment Report, among the 25 US cities with the largest homeless populations (several of whom are either California or Texas cities, one traditionally Democrat and one traditionally Republican state), 7 of them managed to decrease homelessness overall: San Francisco, CA (-7%); Boston, MA (-15%); Washington, DC (-23%); Philadelphia, PA (-16%); Dallas, TX (-5%); Houston, TX (-18%); and Atlanta (-17%).
To some, the strategy successfully (at least so far) carried by Houston could be a model for other US cities. The Texan city has consistently reduced homelessness over one decade, with a budget that is a fraction of those dedicated by other major cities. Houston relies on an effectively applied Housing First strategy, showing that the model could work effectively in the US.
Is Houston a case study?
If Houston prioritizes housing with no barriers to entry, there are counselors supporting people experiencing trauma, mental distress, or addiction:
“Those services can include assigned case managers, food assistance, mental health counseling, and detox and substance abuse treatments.”
But Houston’s relative success compared to other cities also has to do with its centralized, effective administration of funds: all funding is managed by a board that includes county leaders, government officials, agency leaders, and everyone involved.
An important part of Houston’s success relies on good management, which consists in people being incentivized to eradicate homelessness and not to get more funds to treat homeless people:
“The steering committee uses data to drive its decision-making. When it comes to how to distribute funding, allocate resources and determine what programs to take on, the committee invests ‘wherever the data shows that we get the biggest rate of return,’ Eichenbaum [Marc Eichenbaum, a special assistant to Houston’s mayor for homeless initiatives] said.'”