Housing First failure exposed by federal data and Denver’s own numbers

WASHINGTON — The federal government’s signature homelessness strategy has presided over a 40 percent increase in homelessness nationwide and a near-doubling of chronic homelessness since 2016, according to the Department of Housing and Urban Development’s own data, and Denver’s experience illustrates why.

Michele Steeb, CEO of Free Up Foundation and a guest on The Kim Monson Show on February 23, described the Housing First approach as a catastrophic failure. The federal numbers bear her out. HUD’s 2024 Annual Homeless Assessment Report counted 771,480 people experiencing homelessness, up from 549,928 in 2016. Chronic homelessness nearly doubled in that same period, rising from 77,486 to 152,585.

“Homelessness is up almost 35 percent across the country,” Steeb told the show’s guest hosts, Marshall Dawson and Cathy Russell. The actual figure from HUD is closer to 40 percent, and the chronic homelessness increase she placed at “almost 60 percent” is closer to 97 percent. The real numbers are worse than what she described.

How Housing First became the only game in town

Housing First, which provides permanent housing with no preconditions for sobriety or treatment, became the dominant federal approach through a series of policy changes beginning in 2009. The HEARTH Act restructured McKinney-Vento Homeless Assistance funding, and the Obama administration’s 2010 Opening Doors strategic plan declared that federal tools “should be informed by a Housing First approach.”

By 2013, HUD’s Continuum of Care funding competitions awarded bonus points to programs using the Housing First model, creating powerful financial incentives. Programs that required sobriety or treatment participation were at a severe competitive disadvantage. HUD directed approximately 74 percent of competitive grants to permanent supportive housing, according to the Heritage Foundation, while transitional housing beds fell from 211,000 in 2007 to 101,000 by 2018.

The Boston study that haunts the model

Steeb cited a Boston study in which “nearly half of the cohort was dead” and “only 30 percent were left in that housing.” The study she referenced, published in Medical Care in 2021, tracked 73 chronically homeless individuals placed in permanent supportive housing from Boston’s streets between 2005 and 2019.

The findings are stark. Over the 14-year study period, 45 percent of participants died, a mortality rate the study’s authors called “higher than expected,” with a probability of survival below 50 percent at five years. Housing retention stood at just 36 to 42.5 percent at the five-year mark, depending on the statistical method used. The cohort suffered from extreme rates of co-occurring medical, psychiatric, and substance use disorders.

The study’s authors did not conclude that Housing First had failed. They called for “more robust and flexible and long-term medical and social supports.” But the data point Steeb highlighted, that permanent housing without treatment yielded devastating mortality and retention rates, is supported by the study’s own numbers.

Denver’s $274 million lesson

Denver offers a real-time case study. The city spent $274 million on homelessness contracts between 2021 and 2024, according to a Denver Gazette investigation. Mayor Mike Johnston’s All In Mile High initiative spent $155 million between July 2023 and December 2024, $65 million more than originally disclosed, with over $100 million going to hotel purchases and leases.

The city claims success: unsheltered homelessness in Denver fell 45 percent between 2023 and 2025, large encampments dropped 98 percent, and Denver recorded its first winter with zero cold-weather exposure deaths.

But total homelessness in Denver rose 12 percent in the past year alone, from 6,539 to 7,327, and has roughly doubled since 2019, according to the Common Sense Institute. The city moved people from streets into shelters, but only 20 percent of people exiting homeless programming found permanent housing in 2023, the Denver Gazette reported. Statewide, Colorado’s homeless management information system shows approximately 5,000 new people entering the crisis system each month while only about 750 secure permanent housing.

A November 2024 city auditor report found that an estimated $150 million in shelter expenses from January 2022 through March 2024 was not specifically tracked. Over half of reviewed invoices were submitted late, 38 percent lacked proper documentation, and security failures at the former DoubleTree hotel shelter contributed to a double homicide in March 2024.

The accountability alternative

Meghan Shay, Executive Director of Step Denver, appeared on the same broadcast to present a contrasting model. Step Denver, formerly Step 13, operates on four principles: sobriety, work, accountability, and community. The program requires participation, not just housing.

Shay reported that 85 percent of alumni remain sober, 75 percent hold full-time tax-paying jobs, and 90 percent are independently housed at 12-month follow-up. An earlier Philanthropy Roundtable profile of the program reported 65 percent sustained sobriety, 76 percent employment, and 89 percent stable housing. Step Denver takes zero government funding, relying entirely on private donors including the Anschutz Foundation and the Daniels Fund. The 42-year-old program has expanded to Colorado Springs through Step Springs.

These are self-reported outcomes, not results from a randomized controlled trial, and Step Denver serves men who are willing to commit to sobriety, a different population than city programs that accept all comers. But the gap between Step Denver’s 90 percent housing rate and the city’s 20 percent permanent housing rate raises unavoidable questions about what accountability produces that unconditional housing does not.

The policy fight in court

President Trump signed an executive order on July 24, 2025, reversing the Housing First approach. The order directed HUD to require treatment participation as a condition for housing and shifted grant funding toward jurisdictions that enforce camping bans. A subsequent HUD funding notice would have capped permanent housing spending at 30 percent of Continuum of Care funds, down from approximately 90 percent.

A coalition of 20 states and a separate group of cities and nonprofits sued to block the changes. U.S. District Judge Mary McElroy granted a preliminary injunction on December 19, 2025, ordering HUD to reinstate the Biden-era funding rules. “The constant churn and chaos seems to be the point,” McElroy said from the bench. HUD reopened the Biden-era funding notice on January 9, 2026.

The injunction means Housing First remains the effective federal standard, even as the data Steeb cited, and Denver’s own experience, continue to accumulate against it.

“It’s not safe for people that are stewing in disease to be living outside and risking overall public safety, including their own,” Steeb said. “Individual transformation is absolutely 1,000 percent possible” when programs set expectations rather than enabling dysfunction.