The Failed Promise of Housing First

In October, the San Francisco Chronicle shared the story of Austin Draper, a homeless fentanyl addict who has been hospitalized several times for endocarditis, a heart condition that is often caused by intravenous drug use. Only 35 years old, Draper has already undergone open-heart surgery to install a pacemaker. “The cost of his [medical] care likely exceeds $1 million,” the Chronicle reports, “though Austin, who is on Medi-Cal, hasn’t paid anything.”

Draper is a beneficiary of California’s Housing First policy for homelessness. He was placed in permanent-supportive housing, which indefinitely subsidizes his rent and imposes no constraints on his drug use. Although he is no longer living on the streets, his addiction continues to land him in the hospital, always at the taxpayer’s expense.

Ironically, Draper’s tragedy is reminiscent of a New Yorker article titled “Million-Dollar Murray,” written by Malcom Gladwell in 2006 to promote Housing First. Murray Barr was a chronically homeless alcoholic whose addiction repeatedly landed him in the hospital, leaving taxpayers on the hook for more than $1 million in medical bills. “It would probably have been cheaper to give him a full-time nurse and his own apartment,” Gladwell argued.

Gladwell sold the idea that Housing First would not only reduce chronic homelessness, but the cost of placing people in permanent-supportive housing would be offset by savings on medical costs and other services. Twenty years later, Austin Draper’s story suggests that subsidized housing would likely have done nothing to ameliorate Murray Barr’s underlying problems.

An extensive 2018 study, in fact, found that with the exception of HIV/AIDS patients, permanent-supportive housing failed to produce any discernible changes in health outcomes or healthcare costs. Nonetheless, the authors assert that stable housing generally improves health outcomes because it “provides a platform from which other physical, mental, and social concerns can begin to be addressed.”

This idea, known as “Platform Theory,” is common among Housing First apologists, but its logic crumbles in the context of Housing First. A failure to adequately address mental illness and substance abuse is what landed many chronically homeless persons on the streets to begin with, so it hardly stands to reason that housing alone will provide the impetus for them to finally seek the care they need.

As Draper illustrates, permanent-supportive housing residents rarely pursue treatment without direct intervention. He knows that substance abuse is the source of his medical woes, but he continues to refuse recovery services, as is his prerogative under Housing First guidelines. His city’s devotion to platform theory has produced disastrous outcomes, with 30 percent of San Francisco’s overdose deaths occurring in permanent-supportive housing.

Contrary to Gladwell’s expectations, Housing First has failed to improve health outcomes or save taxpayer money. Instead, it has significantly increased public expenditures for the homeless. California’s Legislative Analyst’s Office recently reported that the state has spent more than $37 billion on housing and homelessness programs over the past five years. Of course, people might gladly accept Housing First’s high price tag if it fulfilled its promise of reducing chronic homelessness. Yet in California, the chronically homeless population has ballooned from less than 49,000 in 2020 to more than 66,000 in 2025.

Gladwell’s main point in “Million-Dollar Murray” was that most people who experience homelessness do so only briefly, while the chronically homeless minority consume the lion’s share of resources. Under Housing First, the formula has changed. Today, the bulk of homelessness spending goes to permanent-supportive housing, whose residents are no longer counted as homeless.

San Francisco alone spends three-quarters of a billion dollars per year fighting homelessness, but 60 percent of the budget goes to people like Austin Draper. In other words, the city’s 13,000 permanent housing beds draw resources away from the more than 8,000 people still living on the streets, rendering homelessness more common and more chronic.

If Million-Dollar Murray represented the promises of Housing First, Million-Dollar Draper reflects its failures.