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California Homelessness: New Policies to Address an Intractable Problem


Published December 20, 2022

Homelessness in California continues to worsen despite more money being spent on the problem each year, because state policies have misdiagnosed the issue. California needs to recognize the role that mental disabilities and substance abuse play in causing homelessness. That means shifting from the “housing first” policy to providing earned housing and treatment.

Additional Resources:

  • Listen to “California Homelessness: New Policies to Address an Intractable Problem,” with Lee Ohanian, Kevin Kiley, and Michael Shellenberger. Available here.
  • Read “Roofs or Ceilings? The Current Housing Problem,” by Milton Friedman and George Stigler via the Foundation for Economic Education (1946). Available here.
  • Watch “A New Way to Help the Homeless,” on PolicyEd. Available here.
View Transcript

Homelessness continues to worsen, despite spending more each year. The reason why homeless policies are much less effective than they could be is because state and local governments have mismeasured and misdiagnosed the problem of homelessness, particularly for those experiencing long-term homelessness. 

The state of California has largely ignored mental health and substance abuse issues in designing homelessness policies, but these issues are central in understanding homelessness. Case in point: A Los Angeles Homeless Services Authority report found that only 29 percent of people living on the street had mental health or substance abuse issues. And yet even a cursory investigation into the homeless on our streets finds very few who don’t have a mental health problem. 

A UCLA study found that 88 percent of the homeless had substance abuse and/or emotional health issues. A Los Angeles Times article identified 67 percent as having these issues. 

Our approach to homelessness needs to change. The first step is recognizing that chronic homelessness is being facilitated by state and local government policies that promote substance abuse rather than being focused on the treatment needed to help individuals put themselves in a position where they can manage to live on their own. 

When the policy toward alleviating homelessness shifts from “housing first” to one of contingency management—that is, provide shelter and treatment first, followed by earned housing—only then will we begin to see progress.