Helping the homeless: lessons from welfare reform

Welfare reduction has been perhaps America’s single most successful domestic public policy. Ten years after the welfare reform bill of 1996, 60 percent of the national caseload was reduced. The reason: “work first” programs and work requirements to maintain benefits.

Previously, welfare rolls had been increasing, decade after decade, but this policy change reversed the trend and reduced by millions those dependent on public assistance. 

Despite the caution of many concerned, compassionate observers, including then-Sen. Daniel Patrick Moynihan (D-N.Y.), women and children were not found starving in the streets. Education and training, supported by liberals, had failed as a first strike in welfare reduction but, with the radical policy changes of 1996, publicly-supported people went to work in droves. 

Today, despite increasing public expenditures to reduce homelessness, the numbers keep rising. Between 2017 and 2018, homelessness increased nationally by 0.3 percent or 1,834 people. But 67 percent of people experiencing homelessness can be found in the ten states with the largest number of homeless people, according to the National Alliance to End Homelessness (NATEH).

In Los Angeles and San Francisco, where homelessness is up 12 percent and 16 percent, respectively, increased spending seems to have had an inverse effect upon the number of homeless. 

Over the past five years, the Seattle metropolitan area has seen an explosion of homelessness, crime and addiction. In its 2017 point-in-time count of the homeless, as reported in City Journal, the Seattle-King County social-services agency All Home found 11,643 people sleeping in tents, cars and emergency shelters. Property crime there has risen to a rate two-and-a-half times higher than Los Angeles’s, and four times higher than New York City’s. At the same time, according to the Puget Sound Business Journal, the Seattle metro area spends more than $1 billion fighting homelessness every year. That’s nearly $100,000 for every homeless man, woman and child in King County.

Well-intentioned benevolence appears to have boomeranged.

What has gone wrong? Reliance on social services has not worked. Only the providers of these services vigorously support them, despite evidence of their impotence. What has worked so far is a “housing first” version of “work first” programming. Although meagerly funded, efforts to move the homeless into permanent housing – skipping transitional opportunities – has shown real success. 

Research conducted in Denver, Boston, Seattle and in Utah shows significant reductions in homelessness—up to 72 percent in some cases. In New York City, every person housed in the program saves taxpayers $10,000 per year. Yet, continued reliance on social services, transitional housing and shelters comprise the lion’s share of public dollars spent.

It is startling that in housing, as in welfare, putting work- and housing-first priorities in place have succeeded as other programs have not. But while some efforts to put “work first” into the solutions have been made, just as with “housing first,” the funding for both has been minimal. And there has been no effort to combine the two.

In order to analyze whether work would work, here are some statistics on who the homeless are:

—75 percent or so of the nation’s homeless do not suffer from serious mental illness, leaving a quarter of the population perhaps in need of mental health services. The remainder might well be able to go to work.

—38 percent are dependent on alcohol, with 26 percent dependent on drugs. 

—About 50,000 former convicts enter shelters after release each year.

—12 percent of the homeless are military veterans.

To many people, this would seem a stubborn population to coax into work. But experience tells us something different. There is hope of employment for people with addiction problems, homeless veterans, ex-offenders and those with mental illness. Where work has been the tool, normal life has followed.

For instance, a study by the Manhattan Institute found a significant reduction in recidivism of formerly incarcerated persons when placed in a job. Work socializes; it provides a ladder for self-reliance, acceptable behavior in society and the means to support oneself. Health benefits and better family life result from employment as well.

Regrettably, as with welfare before reform, social services have failed and perhaps fueled today’s increases in homelessness. 

Now is the moment to reverse course by linking the two firsts — work and housing — as the solution. We must provide permanent housing and require work for the able-bodied.

The false assumption that personal barriers prevent success in society has fueled spending on social services for the homeless. But it’s been shown over and over that if people can work, they will. When barriers emerge, they can be mitigated once the person is employed. And this can happen while the security of a home is provided.

Funds should now be diverted from shelters and other temporary housing, as well as from social service departments, to finance this. The merging as a strategy of “housing first” and “work first” programs has the great potential to significantly reduce homelessness. No other solution has been able to make a dent in the problem. 

What do we have to lose?

Peter Cove is the founder of America Works, the nation’s first for-profit company helping welfare recipients to find paid work, and the author of “Poor No More.” He worked in municipal anti-poverty programs in New York City and Boston in the 1960s and ’70s, and he led efforts to replace government funding of poverty programs with multimillion-dollar private-sector investments.