Homelessness, could it happen to you?

By Alexander Fernandez

Reporter

Homelessness is often viewed as a personal failure or a distant crisis. Federal data, however, show it is increasingly tied to systemic breakdowns affecting a growing share of Americans. As housing costs rise faster than wages, and programs meant to move people quickly into stable housing narrow or shift, shelters are changing. Many now function less like short-term safety nets and more like long-term holding spaces, alongside steady annual increases in homelessness.

Federal Point-in-Time (PIT) counts show sheltered and unsheltered homelessness no longer move in tandem. Both have risen in recent years even as shelter systems expanded. Despite decades of investment in emergency beds and temporary housing, homelessness has not declined, and the sheltered population reached historic highs in 2023 and 2024.

In 2007, when national tracking began, roughly 647,000 people were counted as experiencing homelessness nationwide. By 2016, that number had fallen to about 549,000, reflecting a decade of declines. By January 2024, the PIT count recorded 771,480 people experiencing homelessness, surpassing pre-recession levels as shelter stays lengthened and exits slowed. Final PIT data for 2025 have not yet been released.

Housing and Urban Development’s (HUD’s) Annual Homeless Assessment Report shows another shift inside the system. What was once a short-term, roughly month-long stay for many people has stretched longer, with some remaining in shelters for more than a year. As housing costs rose faster than incomes and affordable units became scarcer, shelter stays lengthened and progress out of homelessness slowed.

“It is hard to argue that housing is not a fundamental human need,” said sociologist Matthew Desmond, whose research on eviction and housing affordability has shaped national homelessness policy debates. “Decent, affordable housing should be a basic right for everybody in this country. The reason is simple: without stable shelter, everything else falls apart.”

After 2016, the long-running decline in sheltered and unsheltered homelessness reversed. Affordable rental options shrank, wage growth failed to keep pace with rising rents, and federal housing policy shifted away from Transitional Housing. Under revised Continuum of Care (CoC) funding priorities, many Transitional Housing programs were reduced or converted. Rapid Re-Housing expanded, but in many markets short-term assistance could not keep pace with rent increases and limited availability. Before that point, sheltered and unsheltered homelessness tended to decline together, suggesting shelters more consistently served as short-term pathways to permanent housing.

As the trend reversed, unsheltered homelessness climbed and outpaced shelter capacity. At the same time, sheltered populations reached record levels. The result was a system under strain on both sides: more people outside, and more people staying longer inside.

Federal homelessness funding has also shifted in emphasis. Through CoC Homeless Assistance Grants, Emergency Solutions Grants, Homeless Assistance Grants, and programs such as the HOME Investment Partnerships Program, the federal government has directed billions of dollars to states with large homeless populations. In fiscal 2024 alone, CoC grants awarded more than $3.5 billion nationwide, with the largest allocations going to Calif., N.Y., Texas, Ill., Ohio, Pa., Mass., Wash., Fla. and Mich.

Most federal homelessness dollars flow from HUD to regional CoC coalitions. Those coalitions then distribute grants to local governments and nonprofit providers. The money commonly pays for rent subsidies, permanent supportive housing operations, case management staff, and contracted services. By comparison, only a small share is directed toward emergency shelters, short-term beds, or transitional housing, limiting capacity when inflows rise faster than permanent housing placements.

For fiscal 2025, HUD made nearly $3.9 billion available through the Continuum of Care program, though final awards have not yet been announced after the original funding notice was withdrawn and revised amid legal challenges. Even as overall funding has grown, federal homelessness assistance has continued to prioritize long-term housing models over emergency shelter, a shift that has coincided with longer average shelter stays and persistent unsheltered homelessness.

The growing investment has also intensified scrutiny over how effectively money is tracked and measured. In California, a state audit found officials spent $24 billion on homelessness programs over five years without consistently tracking outcomes. Separate audit reporting found nearly $320 million in homelessness dollars at risk because of weak controls and inconsistent documentation. In Southern California, federal prosecutors launched a homelessness fraud and corruption task force focused on misuse of taxpayer funds, signaling that enforcement agencies now view oversight as part of the national homelessness response.

Federal watchdogs have raised questions about effectiveness rather than basic compliance. Audits by the United States Government Accountability Office and the HUD Office of Inspector General, along with outcome data from HUD’s AHAR, show that while funds are largely spent under federal rules, administrative costs, long-term subsidies, and limited performance oversight can blunt results.

The funding trajectory shows that increased investment has not delivered shorter shelter stays or durable housing stability, revealing uneven implementation and structural constraints that federal spending alone has not fixed. Taken together, the data reveal a system in which record funding, limited oversight, and worsening outcomes now coexist.