In January 2025, the Department of Housing and Urban Development’s Point-in-Time count recorded approximately 745,650 people experiencing homelessness on a single night, representing a 3% decline from 2024’s record and the first year-over-year drop since 2016. Harvard University’s Joint Center for Housing Studies reported that veteran homelessness has decreased to its lowest recorded level, down 56% over 15 years. However, these figures mask a more concerning trend: chronic homelessness, defined by HUD as yearlong or repeated homelessness combined with a disabling condition, reached nearly 170,000 individuals, almost double the level of 2016. Unsheltered homelessness stood at 266,320.
The conventional explanation for homelessness is that housing costs are too high. Researchers Gregg Colburn and Clayton Page Aldern argue in their book, "Homelessness Is a Housing Problem," that factors such as mental illness, drug use, poverty, and local assistance do not account for the significant differences in per-capita homelessness across American cities. Instead, they found that housing prices and vacancy rates are the primary determinants.
While this explanation clarifies why some cities experience higher rates of homelessness, it does not address why some individuals escape homelessness quickly while others remain trapped in cycles of shelter use or long-term homelessness.
Brendan O’Flaherty’s economic research suggests that as rents increase and vacancies decrease, landlords become more selective, often excluding individuals with poor credit, eviction histories, or visible mental health issues. This indicates that housing prices set the threshold for homelessness, while individual circumstances determine who falls into it.
A recent analysis by the Bipartisan Policy Center highlighted that approximately 80% of shelter users experience a brief episode of homelessness, typically due to housing costs or sudden financial shocks. In contrast, the chronically homeless population, while smaller, is more visible and requires more intensive services.
Families and veterans tend to respond well to rental assistance and rapid rehousing initiatives, as evidenced by the significant decrease in veteran homelessness. However, the chronically homeless often face additional challenges, including severe mental illness and addiction, which persist even after obtaining housing.
The Department of Health and Human Services and HUD announced a shift toward a “Treatment First” approach, prioritizing treatment and recovery over housing as the initial intervention. This raises questions about whether housing alone is sufficient for those with the greatest needs.
Evidence from a 2025 analysis of San Francisco’s supportive housing system indicated that among 58 high-service users, 16 individuals died after being placed in housing, and service spending increased significantly. This suggests that while housing can address the issue of homelessness, it may not resolve underlying problems such as addiction or mental health issues.
The debate surrounding homelessness often becomes ideological, with housing advocates emphasizing the role of economic factors and conservatives highlighting the importance of addressing addiction and mental health. Both perspectives can coexist, as America appears to face at least two distinct homelessness issues: one primarily driven by economic displacement and the other by chronic incapacity related to severe addiction and mental illness.
As Congress considers federal homelessness funding, it is crucial to differentiate between those who primarily need affordable housing and those whose chronic homelessness necessitates treatment and supervision. Addressing these distinctions may lead to more effective solutions for both populations.
The 2025 data indicates progress in addressing economic displacement, with overall homelessness declining and veteran homelessness continuing to decrease. However, chronic homelessness remains a growing concern, suggesting that the two issues are evolving in different directions.
Ultimately, understanding the nuances of homelessness is essential for developing effective policies. Recognizing that different populations require different interventions will be key to addressing the persistent challenges of homelessness in America.