Introduction

This report examines two aspects of homelessness policy: how homelessness is defined and categorized, and how federal funding is currently structured.

Homelessness is often treated as a single problem, but it often arises due to very different causes, from a recently laid-off worker sleeping in a car to a chronically homeless, individual struggling with addiction or mental illness and is living on the street. Different stakeholders often emphasize different aspects of homelessness. Some focus on temporary housing caused by hosting costs and wages, while others prioritize visible street homelessness associated with addiction, mental illness, and crime. These differing perspectives can lead to disagreements about appropriate policy responses. 

This CSI analysis examines correlations between homelessness rates and multiple factors. Housing affordability correlates with homelessness rates, as do labor productivity, state spending, drug use, crime and mental illness. In several cases, these latter factors show stronger statistical correlations than housing affordability. 

These correlations do not establish causation, as multiple confounding factors may influence these relationships. For example, states with higher costs of living may also have higher wages, different drug enforcement, or other regional characteristics that affect homelessness rates independently. However, these findings do suggest that homelessness correlates with a broader range of factors than housing costs alone. 

Until recently, the U.S. Department of Housing and Urban Development (HUD) primarily funded “Housing First” programs, which provide housing without requiring sobriety, employment, or treatment. Alternative “Work First” or “Intervention First” models, which require employment, sobriety, and treatment alongside or before housing placement, currently face barriers. An executive order signed in July 2025, however, shifted funding priorities to non-housing first treatment models. 

The data in this report shows associations between homelessness and multiple factors beyond housing affordability. These findings examine whether new funding priorities are being directed to the most effective ends.

Key Findings

• Data suggests homelessness is higher in wealthy, expensive states with high state spending, wider-spread drug use, higher crime, and lower policing levels. This outcome is especially true of the categories associated with visible street homelessness.
  • Total homelessness rates are most strongly correlated with labor productivity, illicit substance use rates, and total state spending per person.
  • Chronic homelessness rates are most strongly correlated with illicit substance use rates, statewide combined crime rates, and police per population.
  • Unsheltered homelessness rates are most strongly correlated with police per population, hours needed to pay rent, and combined crime rates.
  • Severely mentally ill homelessness rates are most strongly correlated with illicit substance abuse rates, hours to pay rent, state spending per person, and labor productivity.
  • Homelessness with chronic substance abuse rates are most strongly correlated with illicit substance abuse rates, hours to pay rent, and state spending per person.
• Colorado ranks ninth for its rate of total homelessness, seventh for chronic homelessness, 10th for unsheltered homelessness, seventh for severely mentally ill homelessness, and seventh for homeless with chronic substance abuse issues.
• Among the 50 largest metro areas, metropolitan Denver ranks fifth for total number of homeless people, sixth for number of chronically homeless people, 11th for total number of unsheltered homeless people, fourth for the number of severely mentally ill homeless people, and fourth for the number of homeless people with a chronic substance abuse issue.
• Top states for:
  • Homelessness per 10,000: Hawaii, New York, Oregon, Vermont, California, Massachusetts, Washington, Alaska, Colorado, Nevada
  • Chronically homeless per 10,000: Oregon, California, Washington, Vermont, Hawaii, Nevada, Alaska, New Mexico, Rhode Island, Colorado
  • Unsheltered homeless per 10,000: Oregon, California, Hawaii, Washington, Nevada, New Mexico, Arizona, Colorado, Florida, Idaho
  •  Severely mentally ill homeless per 10,000: Vermont, California, Washington, Oregon, Hawaii, Rhode Island, Colorado, New Hampshire, New Mexico, Alaska
  • Homeless with chronic substance abuse per 10,000: Washington, California, Oregon, Hawaii, Alaska, Vermont, New Mexico, Colorado, Rhode Island, New Hampshire
• Top metro areas for:
• Homelessness per 10,000: New York City, Los Angeles, Chicago, Seattle, Denver
• Chronically homeless per 10,000:  Los Angeles, Seattle/King County, New York City, San Jose/Santa Clarita, San Diego, Denver
• Unsheltered homeless per 10,000: Los Angeles, Seattle/King County, San Jose/Santa Clarita, San Diego, New York City, San Francisco, Las Vegas, Phoenix, Portland
• Severely mentally ill homeless per 10,000: Los Angeles, New York City, Seattle/King County, Denver, San Jose/Santa Clarita
• Homeless with chronic substance abuse per 10,000: Los Angeles, Seattle/King County, New York City, Denver, San Francisco

Homelessness Trends By U.S. State

There were 762,240 homeless individuals counted in U.S. states in 2024, not including territories and federal districts. This number is more than the population of Denver, but slightly less than that of Seattle. 

Of this total, 270,450, or 35%, were unsheltered, slightly more than the population of St. Petersburg, Florida. Nearly 22% were chronically homeless, just over 18% were severely mentally ill, and nearly 15% had an issue with chronic substance abuse. 

The nation’s homeless individuals are primarily concentrated in a handful of states. California’s total homeless population stood at 187,084 in 2024, or 25% of the nation’s. New York has the second highest with 158,019, or 21%. Three-quarters of the nation’s homeless are in just eleven states: California, New York, Washington, Florida, Massachusetts, Texas, Illinois, Oregon, Colorado, Arizona, Pennsylvania, and New Jersey. 

Similarly, the number of unsheltered homeless in the United States are heavily concentrated in a few states. California alone accounts for nearly half. The Golden State counted 123,974 homeless individuals in 2024, which is 46% of the nation’s total. Nearly 80% of the unsheltered homeless in the United States reside in California, Florida, Washington, Oregon, Texas, Arizona, Georgia, New York, Nevada, and Colorado.

Figure 1

This heavy concentration in a handful of U.S. states is true for most homelessness subcategories, including chronically homeless, severely mentally ill homeless, homeless with chronic substance abuse issues, homeless with HIV/AIDS, and victims of domestic violence.

Colorado ranks highly in each category. It ranks ninth for total homelessness, seventh for chronic homelessness, 10th for unsheltered homelessness, seventh for severely mentally ill homelessness, and seventh for homeless with chronic substance abuse issues.

Many of the states with the highest homeless counts are also states with high populations. To get a true measurement of homelessness occurrence, CSI analyzed the number of homeless individuals per capita. Colorado ranks highly in this regard: ninth for total homelessness rate, seventh for chronic homelessness rate, 10th for unsheltered homelessness rate, seventh for severely mentally ill homelessness rate, and seventh for its rate of homeless individuals with chronic substance abuse issues.

Rankings of the 10 highest homelessness rates from highest to 10th-highest are: 

• Homelessness per 1,000: Hawaii, New York, Oregon, Vermont, California, Massachusetts, Washington, Alaska, Colorado, Nevada
•  Chronically homeless per 10,000: Oregon, California, Washington, Vermont, Hawaii, Nevada, Alaska, New Mexico, Rhode Island, Colorado
• Unsheltered homeless per 10,000: Oregon, California, Hawaii, Washington, Nevada, New Mexico, Arizona, Colorado, Florida, Idaho
• Severely mentally ill homeless per 10,000: Vermont, California, Washington, Oregon, Hawaii, Rhode Island, Colorado, New Hampshire, New Mexico, Alaska
• Homeless with chronic substance abuse per 10,000: Washington, California, Oregon, Hawaii, Alaska, Vermont, New Mexico, Colorado, Rhode Island, New Hampshire

The Appendix has the full ranking of states.

Figure 2

U.S. Homelessness Trends By Metro Area/City

Along with U.S. states, CSI analyzed the changes in homelessness subcategories across the 50 largest areas specified by HUD. These areas are referred to as Continuum of Care areas, or CoCs. A CoC is a local planning body that coordinates and funds homelessness assistance programs for a specific geographic area. CoCs are not directly comparable to cities, counties, or U.S. Census Bureau Metropolitan Statistical Areas, but often encompass one or more of them. Seattle’s CoC, for example, includes both the City of Seattle and King County, Washington. CSI used U.S. Census Bureau data and other data to estimate the population size of each CoC.

As the graph on the next page shows, New York City CoC has the largest total number of homeless individuals among the 50 largest CoC areas, with 140,134 overall. The Los Angeles City and County CoC is next with 71,201 homeless individuals. It is followed by the Chicago CoC (18,836), the Seattle/King County CoC (16,868), and the Metropolitan Denver CoC (14,281). The San Diego City and County; San Jose, Santa Clara City and County; Phoenix-Mesa/Maricopa County; San Francisco; and Las Vegas/Clark County CoCs round out the top 10 Continuum of Care areas for total homeless population. (See Appendix for the full list.)

Figure 3

Correlations Between Homelessness and Various Factors

CSI’s correlation analysis measures the strength of various correlations and states’ rates of homelessness. Each analysis returns a correlation coefficient which measures this strength, ranging from 0 to ±1. Correlation alone does not establish causation but simply indicates the strength of relationship between one set of variables and another.

Data suggests homelessness is higher in wealthy places with abundant state resources, wider-spread drug use, and lower policing levels. This scenario is especially true of the categories associated with visible street homelessness.

Housing First funding is often justified by demonstrating the connection between housing prices and rents and homelessness rates. Homelessness, the argument claims, is primarily a function of housing prices outstripping the ability of low-income workers to pay rent or mortgage. 

Often, however, this argument does not explore connections between homelessness rates and other factors — some of which are as strongly correlated with homelessness as housing affordability. CSI ran a series of correlation tests to explore these connections, comparing the 2024 rates of homelessness in each state to 10 state-level variables from the same year. The data was taken from U.S. federal sources and analyzed by CSI economists. We examined: 

• Statewide rate of illicit substance use in the past year
•  Statewide National Incident-Based Reporting System combined violent and property crime rate
• State-level number of hours needed at the average wage to pay the average rent 
• Total state government spending per capita
• Statewide labor productivity rates
• Statewide combined 2015-24 grant distributions from HUD
• Statewide rates of serious mental illness in the past year
• Statewide disposable income
• Statewide poverty rate
• Statewide police per population

The correlation coefficient between state-level homelessness rates and rent affordability is 0.35. As shown in graph on the next page, states with higher homelessness rates tend to have less affordable rent prices.

Figure 4

Other correlations, however, are stronger. The graph on the right displays state homelessness rates and state rates of illicit substance use. There the correlation coefficient is 0.57, which is stronger than the relationship between homelessness and rent affordability. 

Figure 5

The correlation coefficients between total homelessness rates are shown on the next page. The strongest are between homelessness and labor productivity, illicit substance use rates, and total state spending per person. 

Figure 6

CSI also ran correlation analyses for the same 10 variables against the rates of chronic homelessness, unsheltered homelessness, homelessness with serious mental illness, and homelessness with chronic substance abuse.

The correlations between chronic homelessness rates and all 10 variables are shown in the graph on the next page. Illicit substance use and the statewide combined crime rate have stronger correlations with homelessness rates than does rent affordability. The number of police per capita also has a stronger relationship to homelessness. In that case, it is an inverse relationship, meaning states with higher rates of homelessness tend to have lower rates of police per capita. These findings suggest homelessness is associated with multiple characteristics rather than a single cause.

Figure 7

The correlations between unsheltered homelessness and all 10 variables are shown on the next page. The strongest are an inverse correlation between unsheltered homelessness rates and police per capita and direct correlations with hours needed to pay rent and combined crime rates. 

Figure 8

The correlations between homeless with severe mental illness and all 10 variables are shown on the next page. The strongest correlations are with illicit substance abuse rates, hours to pay rent, state spending per person, and labor productivity.

Figure 9

The correlations between homelessness with chronic substance abuse and all 10 variables are shown on the next page. The strongest correlation is with illicit substance abuse rates, followed by rent affordability and state spending per person.

Figure 10

Policy Implications for Consideration

This analysis has several important limitations; correlation does not establish causation. The relationships identified may reflect inseparable causes, reverse causation, or complex regional patterns rather than direct causal effects. For example, states with high homelessness and high state spending may both be responding to underlying economic conditions rather than spending causing homelessness. Conversely, greater statewide wealth and greater state spending levels may indicate greater access to resources for the homeless, which in turn attracts more homeless individuals to those areas or prolongs their situation.

The correlations identified in this analysis between homelessness and factors including illicit substance use, crime rates, labor productivity, and state spending—in addition to housing affordability—suggest a wider range of funding priorities may be appropriate. These priorities emphasize personal responsibility, sobriety, employment, and treatment as pathways to self-sufficiency. This shift would allow for more tailored, flexible local responses to diverse homelessness subtypes, such as chronic, unsheltered, or those involving mental illness and substance abuse.

This recommendation can be broken down into phases: policy reform, funding allocation, metric redefinition, and implementation oversight. This system would prioritize evidence-based approaches while addressing the limitations of the current “Housing First” dominance.

Policy Reform: Reinforce Amended HUD Guidelines that Include Work First Eligibility

The White House has expanded, through executive order, the funding priorities for HUD grants to include alternatives to housing first funding. Legislators could consider legislation or agency regulations that would encode this newly expanded funding in statute. If future administrations alter this newly expanded funding, future programs may not have the time or momentum to demonstrate effectiveness. 

Diversify Funding Streams: HUD could expand its partnerships with other federal agencies, such as the Department of Labor, which oversees job placement integration and the Substance Abuse and Mental Health Services Administration, which oversees treatment for those challenges. This move could redirect a portion of HUD’s Homeless Assistance Grants to hybrid models, ensuring “Work First” programs are not excluded due to rigid sobriety or employment requirements.

Redefine Metrics of Success: Shift to Self-Sufficiency Indicators

The Colorado Department of Housing Stability could redefine performance metrics in its funding evaluations to include long-term self-sufficiency markers, such as sustained employment (e.g., six-12 months post-program), income stability above poverty thresholds, and reduced reliance on public assistance. It also should away from short-term outputs like “number of people housed” or “meals served” to outcomes like “percentage transitioning from unhoused to self-sufficient.”

Bottom Line 

This analysis finds that while housing affordability correlates with homelessness rates, other factors show equal or stronger correlations, including illicit substance use rates, labor productivity, and state spending levels. Factors such as statewide illicit substance abuse rates, labor productivity, state spending levels, and crime are more strongly correlated with homelessness, particularly with regard to the categories of homelessness associated with visible street homelessness.

Though housing prices and area pay scales do contribute to homelessness, understanding the wider array of factors at play paints a fuller picture of possible causes of homelessness.  Drug prevalence, crime rates, labor productivity, and state spending levels all show statistical associations with homelessness rates in this analysis. As such, federal homelessness abatement funding should be available for a broad swath of programs, not just “Housing First” programs.

Appendix

U.S. State Rankings For Total Homelessness Subcategory Populations

U.S. States Rankings for Homeless Subcategory Populations Per 100,000