The Failure of Federal Homeless Policy: An American Betrayal

If the Department of Government Efficiency, led by Elon Musk, is searching for new targets in the battle against wasteful spending and corruption, they need not look any further than the federal government’s extensive array of unsuccessful homeless programs. These programs are filled with inefficiencies and are pouring billions of dollars into a crisis that continues to worsen.
The newly appointed HUD Secretary Scott Turner acted swiftly in identifying $260 million in savings at HUD, marking a crucial first step in the effort to streamline an agency that has long been plagued by inefficiencies. However, this is merely scratching the surface.
It is essential for the Department of Government Efficiency to delve deeper, uncovering the extensive waste present in the federal homelessness sector and redirecting billions of dollars towards policies that can actually produce tangible outcomes.
For over a decade, the nation has been bound to a singular federally mandated approach to homelessness, known as “Housing First.” This model, endorsed by former President Barack Obama, offers housing without any prerequisites such as sobriety, participation in treatment, or employment search. This approach was promoted as the solution to eradicate homelessness within a decade.
Unfortunately, instead of resolving the issue, homelessness has skyrocketed to unprecedented levels. Deaths from overdoses have soared, and public disorder has reached a breaking point.
By instituting Housing First as the universal policy in 2013, government funding was withdrawn from programs that required sobriety, work involvement, or mental health treatment, as well as from shelters and transitional housing. This was done to increase the number of private housing unit subsidies or vouchers for the homeless.
The repercussions of this disastrous system should not be surprising. By dismantling the country’s homeless system, obliterating accountability, and then expressing shock over the surge in homelessness, we have created a catastrophe.
In the name of “compassion,” we have fostered dependence, informing those grappling with addiction and mental health issues, who account for nearly 80 percent of the homeless population, that they are not required to seek treatment, work, or regain independence. As the crisis deepened, we continued to support the very policies responsible for its creation.
The financial impact of this failed system is staggering, but its true costs extend beyond the billions spent. The U.S. channels over $50 billion annually into homelessness programs, with local governments spending over $700,000 per unit on permanent housing, surpassing the cost of single-family homes. Additionally, encampments are proliferating, businesses are closing, and taxpayers are facing an expanding financial burden for a system that fails to provide lasting solutions.
Furthermore, lives are being lost due to this approach. Drug overdoses have become the primary cause of death among the homeless, with rates increasing annually. Despite this, Housing First avoids recognizing addiction treatment as a necessity, permitting substance abuse and neglecting to address the root causes of homelessness.
The impact on communities has been devastating, with public safety and quality of life deteriorating due to the proliferation of encampments. Law enforcement and emergency services are overwhelmed by crises, while once-thriving cities witness businesses leaving due to rising crime rates and public disorder.
For example, San Francisco under the leadership of then-Mayor Gavin Newsom embraced “no-requirements housing” for the homeless and addicted. After two decades and billions of dollars spent, the city has housed 13,000 addicts, while 7,000 still remain on the streets. Businesses are fleeing due to excessive crime and disorder.
It is imperative that we do not endure another decade or two of such costly failures. The federal government must advocate for a “Human First” approach that reinstates dignity, demands accountability, and assists individuals in rebuilding their lives instead of trapping them in cycles of despair. Shifting to this model will result in significant taxpayer savings and yield tangible, long-lasting outcomes.
Michele Steeb is the founder of the Free Up Foundation and the author of “Answers Behind the RED DOOR: Battling the Homeless Epidemic,” drawing on her 13-year tenure as CEO of northern California’s largest program for homeless women and children.