Homelessness, Housing First and Supportive Housing

The United States responds to homelessness through a network of local planning bodies, funded largely by the U.S. Department of Housing and Urban Development (HUD), that run emergency shelters, transitional programs and, increasingly, permanent housing. For most of the past two decades, federal policy encouraged Housing First: get people into a stable home quickly, without preconditions, and offer support from there. The two main tools are permanent supportive housing, a long-term home with services for people with disabilities, and rapid re-housing, short-term rent help in an ordinary apartment.

On a single night in January 2025, communities counted 745,652 people experiencing homelessness, according to HUD’s 2025 Annual Homelessness Assessment Report (AHAR), dated May 2026. That was 3% below the record set in 2024. Federal policy, meanwhile, is in flux. Since 2025 the administration has tried to move money away from Housing First and toward transitional housing and treatment requirements, and those changes are still being litigated.

How the Federal Government Defines Homelessness

The McKinney-Vento Act sets the main federal definition. Under 42 U.S.C. § 11302, a person or family is homeless if they fall into one of several categories, including:

• Literally homeless — lacking a fixed, regular and adequate nighttime residence, such as sleeping in a car, park, abandoned building or bus station, or staying in a shelter or transitional housing.
• Imminently losing housing — for example, facing an eviction order to leave within 14 days, with nowhere else to go and no resources to find housing.
• Certain unstably housed families and youth — those with long periods of instability and frequent moves, as defined under other federal statutes.
• Fleeing violence — people escaping domestic violence, dating violence, sexual assault or stalking who lack other safe housing.

Other agencies use broader definitions. The U.S. Department of Education, for instance, counts children and youth who are sharing other people’s housing because of loss of housing or economic hardship. That is one reason homelessness figures from different sources rarely match.

What the Latest Count Shows

In the last 10 days of January, local communities conduct a point-in-time count: an attempt to tally everyone staying in emergency shelters, transitional housing and unsheltered locations on one night. HUD requires the count only every other year, but most communities do it annually. HUD compiles the results in Part 1 of the AHAR.

Source: HUD, 2025 AHAR Part 1. The 2024 total is derived from the report’s 2025 total and its reported decline of 25,828.

Key findings from the 2025 report:

• About 56% of people were in emergency shelters, 8% in transitional housing, and 36% (266,320 people) in unsheltered places.
• The overall decline was driven largely by fewer people in emergency shelters. New York and Illinois had the largest decreases, after posting the largest increases in 2024, which both states had attributed at least in part to immigration.
• Homeless individuals and individuals with chronic patterns of homelessness both reached record highs. HUD defines chronic homelessness as having a disability and being homeless for at least a year, or four or more times in three years totaling at least 12 months.
• Veteran homelessness has fallen 56% since 2009, when HUD began reporting it.

Limits of the count. HUD itself cautions that the unsheltered number could be larger than reported, and that weather, local policies and changing methods affect it. The count excludes people who are doubled up or couch-surfing. It also excludes people already living in permanent supportive housing or rapid re-housing, since they are no longer counted as homeless.

The Continuum of Care System

Congress passed the Stewart B. McKinney Homeless Assistance Act in 1987 in response to the homelessness crisis of the 1980s. The HEARTH Act of 2009 reorganized HUD’s homelessness grants into two main programs: the formula-based Emergency Solutions Grants, which fund shelters, prevention and rapid re-housing, and the competitive Continuum of Care (CoC) program.

A Continuum of Care is a local or regional planning body that may cover a city, a county, a metropolitan area or an entire state. It brings together local governments, nonprofit providers, advocates and people who have experienced homelessness to submit one combined funding application to HUD each year, ranking local projects. Continuums also run the point-in-time count, a data system that tracks who is served, and a coordinated entry system: a standardized process for assessing people and referring them to housing and services.

Congress provided $4.417 billion for HUD’s McKinney-Vento homeless assistance programs in FY 2026, according to the National Low Income Housing Coalition (NLIHC).

The Main Types of Programs

HUD’s annual housing inventory count tallies the beds each community dedicates to people who are homeless or formerly homeless. In January 2025 there were about 1.2 million year-round beds nationally.

The mix has changed dramatically. In 2007, transitional housing made up 35% of beds; by 2025 it was 7%. Permanent supportive housing beds more than doubled over the same period, rising 116%. The shift tracks the rise of Housing First: HUD has generally not funded new transitional housing projects since FY 2012, according to the Congressional Research Service.

Housing First: The Idea

Housing First reverses the older “housing readiness” approach, in which people had to show a period of stability, sobriety or commitment to treatment before they were offered permanent housing.

The model is usually traced to Pathways to Housing in New York City, established in 1992. A 2007 HUD-commissioned study described how it gave people with psychiatric or substance use disorders direct access to their own apartments, without requiring treatment or sobriety first. The study found that Housing First programs vary but share a few core features:

• Few barriers to entry. Sobriety, treatment and service participation are not conditions of getting housed.
• Voluntary services. Case management, health care and addiction treatment are offered and encouraged but not required.
• Ordinary tenancy. Residents hold a lease, or a sublease from the program, with standard lease rules. A relapse or a decision to decline services does not by itself cost someone their housing.

Housing First is a philosophy, not a single program. It is applied in both permanent supportive housing and rapid re-housing.

What the Evidence Shows

The research record is strong on some questions and thin on others.

Housing stability. A 2018 National Academies of Sciences, Engineering, and Medicine review concluded that, based on studies lasting one to two years, permanent supportive housing keeps most people experiencing chronic homelessness stably housed.

Health and cost. The same review found no substantial published evidence that supportive housing improves health outcomes or reduces health care costs, with some evidence of benefits for people with HIV/AIDS. Many before-and-after studies showed large cost reductions, but the few careful randomized trials did not. The committee said policymakers should not expect net savings, while stressing that housing is a platform for addressing other needs.

Families. HUD’s Family Options Study randomly assigned 2,282 homeless families in shelters across 12 communities to one of four options: a long-term housing subsidy (usually a voucher), rapid re-housing, project-based transitional housing, or usual care. At 20 and 37 months, families offered a long-term subsidy showed the clearest gains: fewer family separations, less psychological distress and intimate partner violence, more food security, and fewer school moves for children.

The debate. Critics point out that homelessness has risen even as permanent supportive housing expanded: HUD’s count of individuals with chronic patterns of homelessness rose 81% between 2013 and 2025, while permanent supportive housing beds grew 44%. They argue Housing First does too little about addiction and serious mental illness and favors costly permanent units over shelter and treatment capacity. Supporters respond that the model was never meant to solve a regional housing shortage on its own. In their view, rising rents push more people into homelessness than supportive housing can absorb. The National Academies review noted that whether supportive housing reduces chronic homelessness over longer periods will not be known until longer-term studies are done.

Supportive Housing and Rapid Re-Housing in Practice

Permanent Supportive Housing

Under HUD’s CoC rules, permanent supportive housing is permanent housing with services that help homeless people with a disability live independently. Residents hold a renewable lease and there is no time limit on their stay. Programs either own or lease buildings, sometimes converted motels or single-room occupancy hotels, or rent scattered apartments using tenant-based rental assistance. Developers commonly combine capital from the Low-Income Housing Tax Credit with rental subsidies such as project-based vouchers and separate funding for services. For veterans, the HUD-VASH program pairs housing vouchers with Veterans Affairs case management.

Rapid Re-Housing

Rapid re-housing helps a household find an apartment, pays move-in costs and some rent, and provides case management. Under HUD rules, rental help is short-term (up to 3 months) or medium-term (3 to 24 months), capped at 24 months, and participants must meet with a case manager at least monthly. The household is the tenant and can stay once help ends. Because the help is temporary, it does not close the gap between low wages and local rents, a gap that is widest for extremely low-income households. In the Family Options Study, families offered rapid re-housing fared about the same as those given usual care.

The 2024–2026 Policy Shift

Federal policy has changed sharply in the past two years:

• June 28, 2024 — In City of Grants Pass v. Johnson, the Supreme Court held that enforcing public-camping laws against homeless people does not violate the Eighth Amendment, reversing a Ninth Circuit ruling that had barred such enforcement when a city had too few shelter beds.
• July 24, 2025 — Executive Order 14321 directed HUD and the Department of Health and Human Services to end support for Housing First policies that, in its words, “fail to promote treatment, recovery, and self-sufficiency.” It also told HUD to require more participants with substance use disorders or serious mental illness to use treatment as a condition of assistance.
• November 13, 2025 — HUD’s FY 2025 CoC funding notice would have let communities use no more than 30% of their annual renewal amount to renew permanent housing projects. A coalition of states, and separately a group of local governments and nonprofits, sued in federal court in Rhode Island. HUD withdrew the notice in December and issued a revised one, but a preliminary injunction required it to process renewals under the prior rules.
• February 3, 2026 — Congress’s FY 2026 appropriations law (Public Law 119-75) required HUD to renew expiring CoC grants for 12 months.
• June 29, 2026 — The district court ruled that both FY 2025 notices violated the Administrative Procedure Act, according to the Congressional Research Service.
• June–September 2026 — HUD’s FY 2026 notice, released June 1, set aside $1.3 billion for new projects, with priority for transitional housing and services-only projects. A federal judge found it unlawful on August 7 and ordered HUD to rescind it. On September 16, an appeals court let HUD proceed temporarily while it hears the appeal, and HUD reinstated the notice with a September 30 application deadline.

HUD frames these changes as restoring accountability and self-sufficiency. Opponents, including many local governments and providers, argue they would defund existing permanent housing and push formerly homeless tenants back onto the street. As of late September 2026, the appeal was pending and the outcome was unsettled. For how homelessness programs fit into the wider system of housing help, see The Housing Continuum Explained.

The Bottom Line

Homelessness in America is measured by an imperfect one-night count, managed by local Continuums of Care, and funded mostly through HUD. Housing First and permanent supportive housing have a solid record of keeping people housed, but weaker evidence on health and cost, and they cannot by themselves offset high rents and a shortage of homes. With the 2025 count still near record levels and federal policy contested in court, how the country balances permanent housing, shelter and treatment is one of the most consequential open questions in housing policy.