I recently heard that New York City will spend $81,107 a year on each member of its homelessness population in 2025. The city’s total spending on the homeless went from $102 million in 2019 to $368 million in 2025 — an increase of 262%.

That $81,107 is more than a lot of families live on in a year, so it seems that the most effective way to cure the homeless problem is to give the cash directly to the homeless.

A recent report from state Comptroller Tom DiNapoli reported that despite surging expenditures, both the city and New York state struggle in tracking exactly where the money is going and whether it has any impact on the plight of the homeless.

Things are not any better in California, the state with the largest homeless population, where between 2019 and 2024 it spent $24 billion on the homeless with an audit indicating that no one knew if funds were being effectively spent. California Auditor Grant Parks, echoing DiNapoli, said that the audit “concludes that the state must do more to assess the cost-effectiveness of its homelessness programs.”

Apparently the problem arose after the California Interagency Council on Homelessness stopped tracking whether spending on homelessness was effective back in 2021 after adopting the classic Democratic approach of throwing money at a problem, covering your eyes and hoping things work out.

Nationally studies have confirmed that 50% to 75% of homelessness spending goes to payroll. However, according to the National Alliance to End Homelessness it is estimated that front line workers such as shelter staff make only an average $27,830 per year leading to high turnover. It is also estimated that it would take $4.8 billion to raise salaries to afford front line workers a living wage.

Further investigations in New York City found that taxpayer funded non-profit shelter operators paid their executives high salaries with some exceeding $700,000 to $900,000 annually.

Homelessness is causing spending and budgetary issues in other places beside New York City and California and begs this basic question; why do we have a homelessness problem?

The National Alliance to End Homelessness and the National Coalition for the Homeless two organizations that advocate for the homeless cite the following reasons.

First they tell us it is a lack of affordable housing. The primary reason is a market where housing costs have outpaced income, resulting in a severe shortage of units for extremely low-income households. That is a real problem faced by many families and individuals in the last few years, yet most of these families do not become homeless.

Economic Issues like poverty, unemployment, underemployment, and wages not keeping up with the cost of living force many into housing instability. This is also a factor but even when faced with these issues, most do not become homeless.

Domestic violence is also cited as a major cause of homelessness for women and families, with up to 50% of homeless women fleeing abuse. They also cite what they refer to as Systemic Barriers like Systemic racism and marginalization disproportionately affecting Indigenous people, People of Color, and LGBTQ+ populations, leading to high rates of homelessness. They also cite a weakened safety net because of reduced government support for housing, income assistance, with social services failing to support vulnerable persons.

Finally they cite personal crises, physical health issues, severe mental illness, and substance abuse that can lead to job loss and eviction, often without adequate support services. I believe that deinstitutionalization of persons with serious mental illness is a major factor in homelessness.

Deinstitutionalization is the 20th-century policy of shifting mental health care from long-term, state-run institutions to community-based services. The movement was driven by new antipsychotic medications, civil rights concerns over asylum conditions, and cost-cutting. This led to a 97% drop in public hospital mental health beds between 1955 and 2016, resulting in homelessness, incarceration, or inadequate care due to a failure by government at all levels to fully fund community resources. 

As of 2023 approximately 14.6 million adults in the U.S. or about one in 20 experienced a Serious Mental Illness (SMI) in 2023. SMI is defined as a mental health condition that severely interferes with daily life activities, often including schizophrenia, bipolar disorder, or severe depression.  In addition to adults, millions of youth ages 6-17 experience severe emotional or behavioral disorders. Experts estimate that about 50 beds per 100,000 people would meet needs for acute and long-term care, but in some states the number of available beds is as low as five per 100,000 people. Thus, many who need residential treatment cannot obtain it.

The end result of all this is that far too many men, women, and children who need to be institutionalized for treatment are walking the streets and living in deplorable conditions. For many jails have become their mental institution due to “survival” crimes like trespassing, and theft. In 1960 around 55,000 people with serious mental illness were incarcerated but by 2025 2 million persons with SMI are booked into jails annually.

Institutional care for the mentally ill and those with substance abuse problems may help to solve the problem. Nevertheless with communities, states, and the Federal government experiencing runaway spending on the issue of homelessness it is incumbent that they take an honest approach to ensure that monies are spent on approaches that will actually solve or control homelessness.

They can no longer just throw money at the problem.

Thomas Kirkpatrick Sr. is a Silver Creek resident. Send comments to editorial@observertoday.com