Washington’s Homelessness Spending Fails to Deliver Results
New report highlights federal funding inefficiencies in addressing homelessness.
2 min read
Washington’s approach to addressing homelessness is under scrutiny for prioritizing spending over results, according to a new report by the Cicero Institute. The report argues that current federal funding models incentivize activity rather than measurable progress, leading to a growing homelessness crisis despite increased spending.
Spending Growth Outpaces Progress
The report analyzes data from 1,458 nonprofit providers receiving HUD Continuum of Care funding, revealing that their total revenue increased by 123.9% between 2013 and 2024, while inflation rose by 34.7%. Meanwhile, the national one-night count of homeless individuals rose by 30.7% over the same period. Federal funding for HUD Continuum of Care awards also increased by 67.3% between fiscal years 2018 and 2024.
The National Alliance to End Homelessness has called for an additional $9.6 billion in federal appropriations, including $4.8 billion for salary increases at homeless-service organizations. However, the report questions whether more money on the same terms will lead to better outcomes.
Reforming Incentives is Key
Under the traditional Continuum of Care model, grants primarily fund activities such as maintaining beds, operating housing units, and delivering services. Renewal funding depends more on carrying out funded activities and meeting compliance requirements than on measurable outcomes. This system, as described by the Cicero report, is essentially a fee-for-service model, where providers are paid to maintain services rather than to reduce the number of people in need.
The report supports HUD’s shift toward a more competitive, outcome-oriented Continuum of Care program in fiscal year 2026. The FY2026 Notice of Funding Opportunity (NOFO) makes 40% of renewal funding competitive and sets aside $1.3 billion for transitional housing and supportive services. It emphasizes reductions in unsheltered homelessness, treatment, employment income, and exits to housing without ongoing subsidies. However, the competition is currently under a First Circuit stay pending appeal after a district court ruling vacated the NOFO.
Economic Growth as a Solution
While reforms in government programs are essential, the report emphasizes that sustained economic growth and rising prosperity are the most enduring solutions to homelessness. Economic growth supports job creation and higher incomes, which in turn expand the tax base and resources available for public services.
James Carter, a commissioner on The Growth Commission, highlights the importance of economic opportunity and accountability in public spending. He argues that federal grants should reward genuine progress, while economic policy should expand the prosperity that makes lasting solutions possible.
Source: Daily Wire
