Government Policy Makes Homelessness Worse?

Homelessness, like any other social problem, is influenced by incentives. Unfortunately, government policy may actually be making the problem worse, particularly government-subsidized housing for the poor.

Many cities have constructed homeless shelters to provide a place for the homeless to stay out of the cold. By the late 1980s, governments created a network of shelters and soup kitchens to feed and house between 200,000 and 300,000 people per day. Between 1988 and 1996, some 275,000 permanent and transitional housing units intended for homeless persons were added. By 1996, roughly 607,000 beds were available as part of the homeless service system in the United States.

There is little evidence to suggest that government-provided shelter has in any way solved or even reduced the problem of homelessness—to the contrary, as noted, the total number of homeless has risen.