Implementing and Resisting Power-Law Solutions

Key Insight

Philip Mangano, head of the US Interagency Council on Homelessness, advocates an 'abolitionist' approach to homelessness, focusing on ending it rather than merely managing it. In Denver, this strategy was implemented by the Colorado Coalition for the Homeless (CCH), which targeted 106 high-cost, chronically homeless individuals—those with criminal records, substance abuse, or mental illness. The recruitment method was direct: offering a free apartment, such as an efficiency in the former YMCA building, contingent on adherence to program rules. A command center in the YMCA's basement, staffed by ten caseworkers maintaining a 1:10 ratio, provides intensive, daily to bi-daily support and monitoring.

This 'housing first' model proves economically efficient: the annual cost for housing and caring for a chronically homeless person is at most 15000 dollars (10000 dollars for services plus 4500 dollars for rent), roughly one-third of what they would cost on the street. The program aims for clients to stabilize, find jobs, and contribute to their rent, ideally reducing their annual cost to 6000 dollars. However, the approach faces immense challenges with the most difficult cases; for example, a young man with cirrhosis and a blood alcohol level of .49 repeatedly trashed apartments, demonstrating that while the system offers multiple chances, some individuals struggle profoundly with stabilization and adherence to rules.

Power-law solutions frequently clash with conventional moral and political intuitions. Providing non-conditional housing and extensive support to individuals deemed 'undeserving' by some—such as those with persistent substance abuse or criminal records—often provokes public outcry, as seen in Denver where citizens expressed anger at helping 'those bums' while the working poor receive less aid. This highlights a dilemma between efficiency and fairness: while targeted intervention for a few 'hard cases' is more cost-effective and actually solves the problem, it violates the principle of universality and challenges the belief that social benefits require moral justification. This discomfort, even when millions of dollars could be saved or problems resolved, often leads to resistance to such 'small-bore' yet highly effective solutions, preferring the easier, albeit less effective, 'old way' of managing rather than solving problems.