Imagine calling the fire department as your home burns, only to discover the firefighters have been pouring gasoline on the flames. Worse, they demand ever-larger budgets, congratulate themselves for responding
to more fires and insist that questioning their effectiveness threatens public safety.
Welcome to America's "Homeless Industrial Complex." Recent revelations from Seattle and New York show just how disturbing it has become.
In Seattle, an independent financial review uncovered a staggering $16.7 million shortfall at the King County Regional Homelessness Authority, following years of financial mismanagement. The agency spent money it never earned, accumulated debt and incurred millions in interest expenses.
Meanwhile, its CEO and her deputy earn more than $600,000 combined annually. Now Seattle and King County taxpayers are being asked to foot the bill.
Across the country, an Oct. 31 New York Post investigation revealed that state Attorney General Letitia James' office has taken no enforcement action against three major homeless shelter operators despite serious findings against them by government watchdogs. Meanwhile, executives, lobbyists and associates connected to those operators contributed more than $56,000 to her political campaigns.
Among the reported findings: One operator overbilled taxpayers more than $566,000; another faced scrutiny over insider transactions and executive compensation; and a third became the subject of litigation seeking recovery of $2.3 million in allegedly excessive executive salaries.
Campaign contributions alone do not establish improper influence, but the oversight failures and unanswered enforcement questions demand scrutiny.
So do California's repeated audits exposing inadequate oversight and accountability for approximately $24 billion in homelessness spending over five years, even as the crisis worsened.
This homeless treatment system perpetuates itself
These failures expose the incentives of an increasingly lucrative enterprise built around homelessness.
Billions flow through a network of government bureaucracies, taxpayer-funded nonprofits, consultants and housing developers. Contracts multiply. Administrative empires and executive salaries expand. Yet what matters most – lives being restored – seems like a forgotten part of the equation.
The Homeless Industrial Complex has masterminded a system where failure fuels more funding rather than fundamental reform.
For government agencies, more homelessness can mean bigger budgets and greater authority. For nonprofits, renewed grants and expanding operations. For developers, lucrative taxpayer-funded projects.
The result? A bureaucracy that grows and prospers by managing a crisis it has failed to solve.
Worse, we have embraced a policy framework that underestimates the very people it claims to serve.
Treating homelessness is more than providing housing
For more than two decades, federal homelessness policy has prioritized Housing First – a program emphasizing permanent subsidized housing without requiring sobriety, treatment or employment. There were promises that it would end homelessness.
Instead, the Department of Housing and Urban Development (HUD) reported in May that there were "266,320 people living on the street on a single night in January 2025 – a 27% increase since 2013 and a 3% decrease since 2024."
A roof alone cannot overcome addiction or treat serious mental illness, conditions affecting a substantial share of the homeless population. Nor does housing placement, by itself, restore families or cultivate independence. And we cannot build permanent housing quickly or affordably enough to meet the growing demand.
The Trump administration is moving toward a fundamentally different approach: restoring temporary, transitional and communal housing as essential components of our homelessness response. These solutions may be deployed far more quickly and at a fraction of the cost, while integrating treatment, structure, accountability and opportunities for employment and personal growth.
Rather than simply placing people in housing, the goal is to equip them to recover, rebuild their lives and achieve lasting independence.
I’ve witnessed thousands of lives transformed through such a system.
For 13 years, I led a comprehensive program serving women and children experiencing homelessness. Many arrived devastated by addiction, abuse, trauma and years of instability. Within a transitional, communal housing environment, we combined treatment, structure, education, employment opportunities and accountability.
Women reclaimed their lives and began building futures they once thought impossible. They achieved sobriety, reunited with their children, found employment and moved into housing they could afford. Some became homeowners.
Their transformation came not from lowering expectations, but from believing in their potential, setting high expectations and equipping them to fulfill both.
That is the difference between managing homelessness and reversing it, and it exposes a deep flaw in today's system.
The Homeless Industrial Complex operates by the law of the jungle – protect your territory, secure your funding, expand your influence and survive, regardless of results.
But the people this system exists to serve deserve something much better.
We all possess intrinsic worth, extraordinary resilience and a capacity for purpose. We are not merely bodies to shelter, statistics to manage or permanent dependents of government programs.
Recovery is possible. Restoration is possible. Independence is possible. But only when we make these outcomes the goals of our homelessness response and hold those leading it accountable for achieving them.
That means independent financial oversight, transparent spending and funding tied to measurable, long-term improvements in recovery, health, employment, family stability and self-sufficiency.
America needs no more arsonists posing as firefighters. It needs genuine firefighters committed to putting out the fire.
Michele Steeb is founder of the Free Up Foundation and author of "Answers Behind the RED DOOR: Battling the Homeless Epidemic," which draws on her 13 years leading a large and comprehensive program for homeless women and children in Northern California. A nationally recognized homelessness policy expert, she is also a senior fellow with the Discovery Institute’s Fix Homelessness Initiative. Follow her at @SteebMichele and @DiscoveryCWP.
This article originally appeared on USA TODAY: America keeps funding homelessness instead of ending it | Opinion
