New Model Legislation: Overhauling Federal Homelessness Funding

NEW YORK, NY – Homelessness in the U.S. has reached a record high, even as “Housing First” policies—long touted as the solution—have failed to deliver on their promise. Meanwhile, homelessness-related public disorder remains a major concern for Americans, shaping recent electoral and ballot initiative outcomes in California this past November and sparking the creation of a “quality of life” division within the New York City police department.

The federal government’s largest single source of homelessness funding is the Continuum of Care program, which allocates federal funds to local groups tasked with fighting homelessness. Over the years, the program began to prioritize Housing First strategies. Despite its popularity with activists, this approach has proven ineffective, failing not only to end homelessness but even to reduce it.

In new model legislation, Manhattan Institute senior fellows Stephen Eide and Judge Glock propose reforming the Continuum of Care program. Their proposal would shift funding to a block-grant system, giving state governments greater control while removing rigid Housing First mandates. States could still allocate federal funds to Housing First initiatives if they choose, but they would no longer be required to do so. Since state governments already oversee most health and human services, this reform would better integrate homelessness policy with broader social service efforts—providing greater flexibility to address the crisis, which involves not just housing but also mental illness, addiction, and unemployment.

Click here to read the full model legislation.