Homelessness in America
On a single night in January 2025, 745,652 people were counted as homeless nationwide. Federal money reaches them primarily through one program: the U.S. Department of Housing and Urban Development’s Continuum of Care (CoC), which distributes more than $3 billion a year through some 400 regional coalitions of nonprofits and local agencies.
This study guide, designed in collaboration with the Cicero Institute, is intended to give junior and mid-level staffers and policymakers a starting point with which to explore how “Housing First” became America’s governing doctrine on homelessness and why it failed to reduce the problem, and solutions for how the United States can restore treatment, accountability, and public order.
What You’ll Learn
Since 2013, billions have been spent under Housing First, which provides permanent subsidized housing without preconditions and makes treatment for addiction or mental illness optional rather than required.
We now have more than a decade of results, and they paint a clear picture: the supply of permanent supportive housing in that time has grown by more than 200 percent, while unsheltered homelessness has risen 28 percent. Housing First has failed.
This guide examines how these policies became entrenched in federal policy, and what should come next. To do so, we draw on essential research from the Cicero Institute, the U.S. Department of Housing and Urban Development (HUD), and the University of Chicago’s Becker Friedman Institute, together with reporting and argument from The New York Times, Bloomberg, City Journal, The Hill, the Washington Examiner, and more.
By the end of this Study Guide, you’ll be able to answer the following:
- What is Housing First and what does the research record actually show about its effects on housing, health, and mortality?
- What do the federal data say about who is homeless and why?
- Who benefits from the status quo, and what oversight failures allowed billions to be spent without measurable results?
- How did the federal homelessness system come to be built the way it is, and who actually administers it?
- Looking forward, what does a treatment-first alternative actually require and what are the strongest objections to it? How will we assess if it is working?
Part I: Introduction
Homelessness has more than one cause, and every national strategy must decide which cause it treats as primary.
Housing First held that permanent housing, offered without preconditions on treatment or sobriety, was the intervention that ended homelessness; HUD encoded that theory into funding formulas, grant scoring, and the technical assistance that shaped what local providers could build.
The brief below is the document that broke the consensus open. Kurtz names four assumptions underneath the policy and argues each one fails — which is the argument staffers will spend the rest of this guide either defending or dismantling.
by Devon Kurtz, Cicero Institute, Oct 2024
Summary The report argues that Housing First, the federal government’s dominant homelessness response since 2013, has failed on its own terms.
- Why? Since then, the United States increased its permanent supportive housing supply, added 144,000 rapid rehousing units and 122,000 other permanent housing units, and eliminated 120,000 transitional housing units.
- What happened? Homelessness rose anyway. Between 2018 and 2023 alone, subsidized permanent housing grew 31% nationally while unsheltered homelessness grew 32% and chronic unsheltered homelessness grew 60%.
Why Read This is the foundational document of the reform movement and the intellectual source of much of what HUD is now doing.
- Kurtz identifies four assumptions underlying Housing First and argues each is flawed. Everything downstream in this guide is either evidence for this brief, evidence against it, or an attempt to implement it.
Study Questions What are the four assumptions Kurtz identifies, and which is most vulnerable to challenge? If housing supply grew and unsheltered homelessness grew alongside it, name three explanations besides policy failure and the data that would rule each in or out.
Part II: The System
Over the last sixty years, the federal homelessness apparatus has ballooned out of two separate decisions: the dismantling of the state psychiatric hospital system beginning in the 1950s, and the construction of a grant-making architecture at HUD beginning in the 1980s and consolidated under Housing First after 2013.
The first decision created a population, and the second simply managed them. Now, the system routes federal dollars through more than 400 regional “Continuums of Care,” unelected nonprofit coalitions that have distributed $36.6 billion since 2005 with little long-term success.
First, listen to the debate below between the two sides in their own words. Then read the historical brief, and answer the study questions.
Debating Trump’s approach to homelessness
by Studio 2, WHYY, November 2025
Summary A moderated NPR discussion between Dennis Culhane, the University of Pennsylvania social policy professor whose research helped build the evidentiary case for Housing First, and Devon Kurtz of the Cicero Institute covers the shift of federal dollars away from permanent housing and toward short-term, compliance-based interventions.
Why Watch Staffers who only read reform-side material will lose arguments they should win. This is the shortest available route to hearing the strongest version of the opposing case, from the academic most responsible for it.
Study Question Where do Culhane and Kurtz agree on the facts and disagree only on interpretation?
Erosion of Mental Illness Treatment
by Devon Kurtz, Cicero Institute, June 2026
Summary Kurtz argues that federal policy steadily stripped states of authority over serious mental illness while promoting community care that never replaced state hospitals.
Key Point Between 1955 and 1981, 432,633 state hospital beds disappeared, while discharged patients made up just 3.6–6.5% of those served by new community mental health centers.
Why Read As beds closed, community care failed to replace them. The seriously mentally ill moved into jails and onto streets. Kurtz also explains the federal legal constraints that limit states today.
Study Questions Was deinstitutionalization a failure of intent, funding, or design? Which federal constraints could Congress reverse?
Part III: The Data
by Jason DeParle, NYT, December 2025
Summary A question-by-question audit of the research record behind the $3.9 billion grant overhaul. Housing First does get people housed, but shows little consistent evidence of improving health or reducing mortality, and treatment-first models remain understudied.
Why Read This piece offers a good background on what the evidence does and doesn’t support on both sides, as well as what questions need further study.
Study Question Which Housing First claims does the evidence support, and which does it not?
by Dept. Housing and Urban Development
Summary In 2024, HUD’s annual count found 745,652 people homeless on a single night in January 2025, a decrease of 25,828 people, or 3%, from the record set in 2024.
- The decline was driven largely by emergency shelter, which fell 4% (16,931 fewer people), and was geographically concentrated: New York and Illinois accounted for decreases of roughly 12,500 and 11,300 people respectively.
Why Read National statistics can mislead. A 3% national decline that is mostly two states, and mostly shelter beds, says very little about street conditions in Phoenix or Los Angeles.
Study Question What can and cannot be inferred from a point-in-time count?
Asylum Seekers and the Rise in Homelessness
by Becker Friedman Institute, U of Chicago
Summary Sheltered homelessness rose 43% between 2022 and 2024. The authors find that asylum seekers account for roughly 60% of that increase.
- In New York City, where sheltered homelessness rose by 77,352, the authors attribute 86.2% of the increase to asylum seekers; in Chicago, 93.8%.
Why Read This report is essential for correctly interpreting recent statistics. The authors state plainly that their result “challenge[s] media and policy narratives that primarily attribute this rise to local economic conditions and housing affordability.”
Study Questions If asylum seekers drove most of the recent rise in sheltered homelessness, what follows for arguments about housing costs? What does the finding say, or not say, about unsheltered homelessness?
Part IV: Diagnosis
by Judge Glock, City Journal, August 2022
Summary Glock documents how federal prioritization rules made drug abuse effectively a prerequisite, not a barrier, for housing assistance.
- The article opens on a homeless man in Austin told his problems were not severe enough to qualify for housing, who observes that he should have become an addict. He is told by a social worker that this is, in fact, how the priority system works.
Why Read This is the clearest single illustration of the system’s perverse incentive structure.
Study Question Distinguish between prioritizing the most vulnerable and rewarding the most dysfunctional. Is there a screening design that does the first without the second?
Sex Offenders and Homelessness
by Devon Kurtz, City Journal, November 2025
Summary Kurtz defends HUD’s decision to reward homelessness programs that engage with sex offender registries, arguing that advocacy organizations dismiss the connection by attributing it to a lack of housing options rather than to the composition of the unsheltered population.
- Kurtz also reports that homeless people are roughly nine times more likely than the general population to be sexually assaulted.
Why Read Short, and the most contested element of the reform agenda. The argument that matters here is the one about commingling vulnerable populations in shared facilities, which is an operational question congregate shelters face regardless of anyone’s politics.
Study Questions How should a shelter system handle registrants without either excluding them into unsheltered homelessness or housing them alongside women and children? What data would HUD need to collect to answer that, and what are the privacy costs?
Common Deficiencies in Homelessness Oversight
by Paul Webster, Cicero Institute, June 2025
Summary Webster synthesizes government performance audits from Arizona, California, the City of Los Angeles, New Orleans, and Washington State, finding the same failures in each.
Why Read The argument that homelessness spending fails is usually made anecdotally. This brief makes it with the government’s own auditors as witnesses, in five jurisdictions of different sizes and political characters.
Study Questions What do these five audits have in common that explains the pattern? Would consolidating grant administration fix the oversight problem, or just relocate it?
Billions in Funding for the ‘Homeless Industrial Complex‘
by Tyler O’Neil, The Daily Signal, October 2025
Summary O’Neil summarizes “Infiltrated: The Ideological Capture of Homelessness Advocacy,” a Capital Research Center report produced with the Discovery Institute.
Why Read This piece explains who profits from the status quo and why reform meets such resistance. It answers the question staffers are asked most often and can rarely answer with numbers.
Study Question Does government funding of advocacy organizations that shape government policy present a conflict of interest, or is it how expertise reaches policymakers?
Part IV: Solutions
Confronting Mental Illness and Substance Abuse
by Cicero Institute, February 2026
Summary The authors argue that “homelessness is not solely a housing problem” but rather “it is fundamentally intertwined with behavioral health.”
- Among more than 274,000 homeless people in 2024, 67% live with mental health disorders and more than 40% with substance use disorders.
Why Read Criticizing Housing First is easy, but specifying what replaces it is the hard part. This is the clearest statement of the treatment-first alternative. The authors propose integrating treatment with housing, reforming civil commitment law, expanding residential treatment capacity, and enforcing public space regulations.
Study Question Which of the four proposals requires federal action and which is available to states now?
Consolidating the Continuum of Care Program at HUD
by Kurtz and Webster, Cicero Inst., June 2025
Summary The authors propose consolidating more than 400 regional Continuums of Care into 50 state-based entities led by elected officials. Their case is that CoCs are unelected nonprofit coalitions administering more than $3 billion a year with incentives do not reduce homelessness.
Why Read This is the administrative blueprint behind the reforms now underway, and the one proposal in this guide that changes who holds power rather than what the money buys. Accountability arguments are only as good as the accountable body they name; here the named body is the states.
Key Point Los Angeles, which receives more federal homelessness funding than any other region and had more than 50,000 people living on its streets in 2024.
Study Questions What is gained and lost by moving authority from regional coalitions to state governments? Which states would handle this well, and what happens in states that would not?
Inpatient Care for the Seriously Mentally Ill
by Devon Kurtz, Cicero Institute, May 2025
Summary Kurtz argues that the Substance Abuse and Mental Health Services Administration restricts federal funding for the one treatment modality the most seriously ill most need.
- There are fewer than 40,000 inpatient psychiatric beds nationwide, more than half of them serving the criminal justice system, against state needs he estimates at three to five times current capacity.
Why Read This is the constraint that determines whether any treatment-first policy is real. A civil commitment reform without beds is a paper reform, and this brief supplies the specific statutory prohibitions that keep the beds from being built.
Study Question Why do federal block grants prohibit inpatient funding, and what was the original rationale?
Conclusion
For a decade, the case against Housing First was a state-level argument. Cicero’s 2024 report opened by conceding that federal policy was unlikely to move and told states to build workarounds: audits, camping bans, transitional housing, outcome-based contracts. The 2026 Continuum of Care NOFO adopted that logic wholesale. What was designed as a workaround is now the federal position.
The shift is narrower than either its champions or its critics describe. HUD did not cut homelessness funding; $4.04 billion is the largest appropriation in the program’s history. It did not abolish permanent supportive housing. It moved 40 percent of the money from automatic renewal to merit scoring.
Every proposal below shares that structure, and offers an accountability mechanism attached to money that was already being spent, which is why they are available to legislatures now rather than after a new appropriation.
- Audit before anything else. Performance audits of publicly funded providers, plus state data collection outside HMIS. Georgia has done it; it is the precondition for every other item here.
- Rebuild transitional housing. America lost roughly 60 percent of its transitional housing units between 2013 and 2023. The 2026 NOFO’s $1.3 billion set-aside is this proposal enacted.
- Pay for outcomes, not units. Outcome-based contracts for transitional housing, rapid re-housing, and prison re-entry, with metrics covering treatment engagement rather than occupancy alone.
- Reform involuntary commitment. Lower thresholds, a broader dangerousness standard, substance use disorder as a qualifying condition, and clarified Olmstead guidance — paired with inpatient capacity, without which none of it functions.
- Ban street camping and build the alternative. Austin’s downtown unsheltered population fell by a third after its 2021 ban was reinstated, but the ban only works alongside sanctioned sites with security and sanitation, as in Portland, Denver, and Seattle. Drug-free service zones extend the same logic to providers.
- Redirect behavioral health dollars. States hold wide latitude over SAMHSA block grants. Florida and Georgia have already moved Housing First funding toward treatment without waiting for Congress.
Kurtz, Devon. “Rejecting Housing First: Why America’s Homelessness Strategy Failed and How to Fix It.” Cicero Institute, October 2024.
“Debating Trump’s Approach to Homelessness.” Studio 2, WHYY, Nov 17, 2025.
Kurtz, Devon. “The Historical Basis for State and Local Discretion Over the Treatment of Serious Mental Illness and the Consequences of its Erosion.” Cicero Institute, June 2026.
Meyer, Bruce D., Angela Wyse, and Douglas Williams. “Asylum Seekers and the Rise in Homelessness.” Working Paper No. 2025-49. Becker Friedman Institute, University of Chicago, 2025.
DeParle, Jason. “Trump Says ‘Housing First’ Failed the Homeless. Here’s What the Evidence Says.” The New York Times, December 25, 2025.
U.S. Department of Housing and Urban Development. 2025 Annual Homelessness Assessment Report (AHAR) to Congress, Part 1: Point-in-Time Estimates of Homelessness. 2026.
Glock, Judge. “Subsidizing Addiction.” City Journal, August 18, 2022.
Kurtz, Devon. “Trump is Right About the Link Between Sex Offenders and Homelessness.” City Journal, November 24, 2025.
McCance-Katz, Elinore, and Devon Kurtz. “With Friends Like Utah’s Disability Law Center, Who Needs Enemies?” Utah News Dispatch, Feb 13, 2026.
O’Neil, Tyler. “New Report Exposes Billions in Funding for the ‘Homeless Industrial Complex.’” The Daily Signal / Fix Homelessness, October 23, 2025.
Webster, Paul. “Common Deficiencies in Homelessness Program Oversight Across Five U.S. Jurisdictions.” Cicero Institute, June 2025.
Kurtz, Devon. “SAMHSA’s Priority Should Be Inpatient Care for the Seriously Mentally Ill.” Cicero Institute, May 7, 2025.
Kurtz, Devon, and Paul Webster. “Consolidating the Continuum of Care Program at the U.S. Department of Housing and Urban Development.” Cicero Institute, June 9, 2025.
Sharp, Chris, Elinore McCance-Katz, Paul Webster, and Ryan Prenosil. “Reducing Homelessness by Confronting Mental Illness and Substance Abuse.” Cicero Institute, February 24, 2026.
Capital Research Center, with the Discovery Institute. Infiltrated: The Ideological Capture of Homelessness Advocacy. 2025.
U.S. Department of Housing and Urban Development. FY2026 Continuum of Care Program Notice of Funding Opportunity.
