Beyond Housing First

Why California Needs a New Model for Addressing its Drug and Mental Health Crisis

Unfortunately, tent encampments are common in downtown Los Angeles these days

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If there is one thing Californians agree on, it is that we have to do something about the inhumane drug addiction and mental health crisis proliferating across our cities and towns. The situation is dire for those most in need of help, and the status quo costs the state and local governments billions while having little to show for it. Furthermore, the crisis undermines public safety by straining local fire departments, law enforcement agencies and other emergency response resources.

Although widespread acknowledgment exists that the current approach needs to be improved, there is no consensus on the best path forward. For example, one popular strategy among homeless advocates, “Housing First,” is based on the idea that everyone living on the streets is entitled to permanent housing, even before addressing any outstanding mental health or addiction issues. While this sounds nice in theory, in practice, “Housing First” is a classic example of putting the cart before the horse concerning treatment, recovery and, ultimately, housing stabilization.

This is not to suggest that housing isn’t a critical piece of the puzzle in solving California’s homeless crisis – it is. Let me be clear in stating that I strongly support policies that encourage housing development of all types – including rent-stabilized and permanent supportive housing. Lowering the cost of housing is also a critical factor in ensuring folks don’t end up homeless in the first place.

But the problem with “Housing First” is that it prioritizes permanent housing without considering the steps one needs to take before safely and responsibly living in a stable housing situation. In other words, “Housing First,” by deprioritizing drug treatment and transitional shelter, lets perfect be the enemy of good.

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Inhumane Living Conditions

If one needs evidence that housing alone is insufficient in addressing drug addiction and mental health, one needs to look no further than this alarming deep dive by the Los Angeles Times into the collapse of the Skid Row Housing Trust.

Once a darling of local LA media and homeless advocates, the Skid Row Housing Trust was a non-profit housing provider that owned and operated over two dozen residential buildings in Downtown Los Angeles. But, according to the LA Times piece, a series of managerial failings and poor financial decisions led the Trust’s Board of Directors to vote to break up the organization last October.

Underlying the mismanagement of the Skid Row Housing Trust’s residential portfolio was a situation in which basic building maintenance became next to impossible due to ongoing damage and destruction by some residents. According to the LA Times piece:

“Added to that structural challenge is a policy shift of the past decade giving priority for housing to people who have been homeless the longest, have mental and physical health conditions and often substance use disorder. Wear and tear on apartments suffers accordingly, building operators say, potentially creating a downward spiral in which damaged units cannot be reoccupied, cutting into the building’s rental revenue.”

In San Francisco, non-profit housing providers face similar challenges. As Randy Shaw, Director of the Tenderloin Housing Clinic, explained in a 2022 San Francisco Chronicle article:

“We throw all these people into our hotels who have no demonstrated ability to live independently, who have severe problems and need to be elsewhere.”

In the same Chronicle piece, UCSF researcher and supportive housing expert Margot Kushel adds:

“We’re shooting ourselves in the foot - we can’t house people who are incredibly high-risk and not give them the services they need. It will not work.”

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San Francisco’s Tenderloin neighborhood, where the city’s non-profit homeless service providers and single-room occupancy (SRO) buildings are concentrated. Photo credit: Gabe Pierce

Housing Without Guardrails

During the COVID-19 pandemic, San Francisco used federal funding to house over 3,700 high-risk residents in 25 hotels. While the primary reason for this program was the closure of homeless shelters to prevent the spread of the COVID virus, it was also a de-facto trial run for the “Housing First” no-questions-asked approach to housing the city’s homeless population.

As expected, the results of the shelter-in-place program were less than ideal. Although the program ended in late 2022, the City of San Francisco is now on the hook for $26 million in property damage and faces multiple lawsuits from hotel owners. Nevertheless, city officials defend the program as successful in preventing the spread of COVID among the city’s most vulnerable populations - but the program highlights the need for behavioral standards and guardrails for anyone granted a publicly-subsidized housing unit.

“Housing First” and homeless advocates may argue that requiring standards of behavior is asking too much of folks in the depths of severe drug addiction or mental health crises. And it may very well be the case that individuals in these circumstances don’t have much agency over their compulsions and addictions. But moving someone from a tent on the street into a hotel room doesn’t address the root cause of addiction or mental illness.

In many cases, this makes it harder for homeless folks to put their lives together and continue on the straight and narrow. It also makes it impossible for housing service providers to maintain their buildings under constant assault. Without guardrails, this vicious cycle will continue indefinitely into the future.

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A Vicious Cycle of Perverse Incentives

Over the years, it has become clear that one of the most significant barriers to solving California’s homeless crisis is not the amount of money the state spends but how and where it allocates its resources. For example, in San Francisco and Los Angeles, homeless service providers, drug treatment facilities and low-income transitional housing options are primarily concentrated in specific areas of the city (Skid Row in Los Angeles and the Tenderloin/SoMa in San Francisco). There are several reasons for this, including a history of disinvestment in central city areas after WWII and run-of-the-mill NIMBYism preventing services from being spread out and distributed.

What makes matters worse is that illicit open-air drug markets operate with impunity in these areas. Without the political will to shut down these markets, those struggling with hard drugs living in these neighborhoods will succumb to a lifetime of addiction and eventual overdose, regardless if they live on the street or in a single-room occupancy (SRO) unit. The drug markets also attract new clientele from other cities and states, creating an even higher demand for housing and services.

This has created perverse incentives not only for the homeless folks living in these areas but for the service providers as well. Because non-profit organizations administer homelessness and drug treatment services, there is little accountability or oversight into their spending of public dollars. As a result, promoting policies like “Housing First” allows them to appear virtuous while demanding increasingly more money for solutions that go nowhere.

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It’s Time to Consider Alternatives

While it is clear that the current approach is failing, there are few viable alternatives to the status quo. When properly managed, permanent supportive housing is probably one of the best options for those needing ongoing mental health care, but it is prohibitively expensive (especially in urban markets where land and development are costly). And when permanent supportive housing is located adjacent to open-air drug markets, it makes it nearly impossible for those in recovery not to be tempted to fall back into their former habits.

One option is for the state to reassert control over California’s mental health infrastructure instead of delegating everything to local cities and counties. This might include developing supportive housing communities in areas far away from the Tenderloin or Skid Row, where folks can live closer to nature and avoid the risk of relapse. These would be places built to allow folks to live with dignity through ongoing programs like gardening, art classes and other activities.

Unfortunately, even suggesting something like this conjures the specter of yesteryear's inhumane “mental asylums” immortalized in films like “One Flew Over the Cuckoo’s Nest.” Nevertheless, we must accept that this is ancient history and move forward with a new model.

The first step is reforming the 1967 Lanterman-Petris-Short (LPS) Act, which set the stage for deinstitutionalization but left (and still leaves) California’s most vulnerable fending for themselves. Reforming the LPS Act would also help strengthen the state’s conservatorship laws- something both San Francisco Mayor London Breed and San Jose Mayor Matt Mahan recently expressed support for.

The next step is reallocating the resources from downtown non-profit services into these new permanent supportive housing communities outside of city centers. Instead of the “Housing First” approach (which lacks accountability by design), the supportive housing community approach would have ground rules and guidelines for behavior (both for residents and staff). In addition, the money saved by defunding fundamentally broken service providers like the Skid Row Housing Trust could be used to hire and train additional mental health professionals and addiction counselors.

To be sure, none of these suggestions is a silver bullet. The overlapping crises of homelessness, mental health and drug addiction are entrenched across the state. But unless we pivot and try new approaches, it is guaranteed that we will continue on the same path toward even worse outcomes for our fellow Californians who need our help more than ever.