Recent Cato research finds that “Housing First” policies have been unable to reduce or mitigate a rise in the chronically homeless population in Utah and California. Home prices have risen dramatically in both states, and providing permanent housing to the homeless population has proven increasingly difficult. Given Utah and California’s disappointing results, Houston, Texas, poses somewhat of a mystery: it appears to have substantially and successfully reduced homeless numbers since adopting the philosophy in 2011.

Houston is part of a Continuum of Care (CoC) known as The Way Home, a regional entity that receives federal funds and administers a homelessness response. The Coalition for the Homeless, a non-profit organization that helps coordinate the efforts of public and private stakeholders, leads the region’s efforts. Houston adopted a Housing First approach to homelessness in 2011 with a successful pilot initiative focused on housing homeless veterans. It subsequently expanded the program to focus on the broader chronically homeless population.

In 2020, regional partners invested additional money to fund Housing First projects with the Community-wide COVID-19 Housing Program (CCHP). Phase One included a 2‑year, $65 million budget with the objective of housing 5,000 individuals.[i] Phase Two, announced in January of 2022, put $100 million towards the goal of housing 7,000 more individuals.[ii]

In contrast to California and Utah, Houston data shows chronic and overall homelessness declined following policy implementation. Chronic homelessness fell substantially in the years before Housing First was implemented, but the downward trajectory continued after the introduction of Housing First, in contrast to California and Utah. Chronic homelessness declined by 68 percent since policy implementation in 2011 (Figure 1), and although numbers began to rise again after 2017, Houston had reversed the trend by 2022.

Houston data shows a similar trend among overall homelessness. Overall homeless counts fell before policy adoption but increased sharply between 2010 and 2011. However, overall homeless numbers fell again after the implementation of Housing First: between 2011 and 2022, overall homelessness in Houston fell by 63 percent. Remarkably, this is despite the Houston area adding additional counties to its CoC in 2014 and 2017. [iii]

Houston’s outcomes are markedly and directionally different from those in California and Utah. So, what explains Houston’s seeming success? One possibility is that Houston has better coordinated efforts over a considerably smaller geography.

Comparing Houston’s response with California’s, a report by California YIMBY noted, “Houston’s approach to reducing homelessness relies on extensive coordination between various actors, overseen by one presiding body, the Coalition for the Homeless of Houston/​Harris County. In contrast, California’s homeless services system is highly fragmented.” This is somewhat understandable given that Houston’s homeless approach is implemented over a single CoC, where the state of California has 44 distinct CoCs, all with local governments, counties, law enforcement agencies, and state departments of their own.

In addition to differences in coordination, other researchers have suggested that Houston’s “compassionate enforcement” policies that prohibit public camping, and politicians that discourage panhandling, have helped improve homelessness in Houston. Of course, clearing encampments only reduces the homeless population if individuals have somewhere else to stay. In 2019, Houston spent about $3.4 million clearing encampments, but the city ensured that affected residents had access to either permanent supportive housing or a housing voucher.

Likely more significant than either coordination or compassionate enforcement efforts are Houston’s underlying housing fundamentals. Average home values in Houston ($255,921) are a fraction of those in San Francisco ($1,287,792), the state of California ($716,909), or Utah ($500,077).

Improved housing affordability helps to reduce homelessness in at least two ways. First, in the context of Housing First, affordable housing makes it easier to buy or build permanent supportive housing units. This makes a Housing First approach more sustainable in Houston than in other places. For example, due to the availability of low-cost housing, Houston spends between $17,000 and $19,000 to house an individual for a year, while San Francisco must spend between $40,000 and $47,000 to do the same.

Likewise, Houston was able to move 1,080 people into permanent supportive housing, provide short-term rental assistance for 3,180 people, and stabilize 2,780 people on the verge of homelessness with the $65 million spent on homelessness during Phase One. In contrast, Los Angeles reportedly spent almost $13 million buying motels to house individuals experiencing homelessness, an investment that resulted in just 39 units.

The second way affordable housing reduces homelessness is by making it possible for people on the margin of the housing market to stay housed to begin with. In line with this, studies have long found a positive relationship between housing prices and rates of homelessness. For example, the book How to House the Homeless found that rent costs explained about 40 percent of the variation in homelessness rates. In a recent book, authors Gregg Colburn and Clayton Page Aldern found that the supply of affordable housing was a more accurate predictor of homelessness rates than mental illness, substance abuse, or poverty measures.

Given the relationship between housing affordability and homelessness, it is not surprising that some research has also found an association between housing regulation and homelessness. Comparing the Wharton Residential Land Use Index with changes in homelessness at the metro level, an article found that areas with greater housing regulation have experienced more growth in homelessness. A 2019 CEA paper titled The State of Homelessness in America found that “if the 11 metropolitan areas with significantly supply-constrained housing markets were deregulated, overall homelessness would fall… by 31 percent in these 11 metropolitan areas, which currently make up 42 percent of the United States homeless population.” Notably, Houston is the only major city that lacks a traditional zoning code, and low regulation is likely a significant factor driving its success.

While homelessness is a complex issue, and housing affordability is not the only contributor, it is clear that high home prices play an important role. Fortunately, there are many ways to improve housing affordability, including reducing regulatory barriers. If cities and states want to reduce homelessness, they should consider Houston’s example and pair efforts to address homelessness with reforms to increase housing supply and reduce housing costs.

[i] Note that not all funds from phase one were used for Housing First initiatives: a portion went to rapid rehousing and homelessness prevention.

[ii] More than a third of this budget ($35 million) came from federal funds provided under the American Rescue Plan.

[iii] Fort Bend County and Montgomery County, respectively.

The debate around raising a minimum wage typically centers on how it impacts both pay and employment. The higher hourly pay for beneficiaries is measured against any reduction seen in employment due to the higher labor costs for businesses (termed “disemployment”). In theory, policymakers then evaluate if the trade-off is worth it.

The overwhelming majority of academic studies still find that raising minimum wages costs jobs, particularly for young, black, and low-skilled workers. But in recent decades a large minority of studies have found no significant job loss effects, suggesting there may be little downside to minimum wage hikes. The question then becomes: why?

Advocates of higher minimum wages suggest that firms must have significant “monopsony power” in labor markets. In this world, a higher minimum wage could theoretically raise employment and pay concurrently. The evidence, they say, proves the theory.

But there are other more plausible explanations. One is that these research papers are often too narrow in scope. When Seattle increased its minimum wage aggressively at the start of the last decade, for example, some research found no employment loss in the restaurant sector. But the standard trade-off nevertheless still held when looking at low-wage work across all industries.

Another explanation is that these papers’ designs don’t capture well the impacts in real labor markets. A recent study by Priyaranjan Jha, David Neumark, and Antonio Rodriguez-Lopez attempted to repeat previous work on the restaurant sector that had found no relationship between the minimum wage and employment when comparing counties that share a state border. Instead, they now looked at the impact of higher minimum wages by examining multi-state commuting zones – a more accurate reflection of an economic area. This methodology found “a robust negative relationship between minimum wages and employment,” as standard theory would suggest.

Another potential explanation is that profit-seeking employers adjust in other ways to mitigate their higher labor costs when the minimum wage is raised. Numerous papers have shown how minimum wage increases lead firms to harness other “margins of adjustment” including: greater use of noncompetes, a reduction in workers’ hours, altering schedules, imposing more rigorous work targets, or trimming other forms of employee remuneration and benefits.

A new pre-print study by Mark Meiselbach and Jean Marie Abraham provides an example. Using the Medical Expenditure Panel Survey and looking at changes to state and federal minimum wage laws between 2002 and 2020, the pair examine the relationship between changes to minimum wage laws within a state and the provision of employer health insurance.

Their results are summarized below (my emphasis)

We examine the impact of state minimum wage increases on employer health benefit offerings using the 2002–2020 Medical Expenditure Panel Survey – Insurance/​Employer Component data. Our primary regression specifications are difference-in-differences models that estimate the relationship between within-state changes in employer-sponsored insurance and minimum wage laws over time. We find that a $1 increase in minimum wages is associated with a 0.90 percentage point (p.p.) decrease in the percentage of employers offering health insurance, largely driven by small employers and employers with more low-wage employees. A $1 increase is also associated with a 1.80 p.p. increase in the prevalence of plans with a deductible and three percent increase in average deductibles. We do not find consistent evidence that other benefit characteristics are affected. We find no consequent change in uninsurance, likely explained by an increase in Medicaid enrollment.

In other words: higher minimum wages reduce the likelihood that companies with fewer than 50 employees, or those with lots of low wage workers, will offer health insurance. For those that do, higher minimum wages tend to lead to a small offsetting increase in average deductibles. Both of which bring new costs to workers, even if they don’t show up as reduced employment.

On Valentine’s Day, millions of Americans express their affection with gifts. In 2021, Americans spent almost $22 billion on Valentine’s Day and this year, spending is expected to reach almost $26 billion. While inflation is affecting particular products like sugar and sweets, longstanding trade policy increases the prices of the most common Valentine’s Day gifts.

Here’s how the U.S. government makes typical Valentine’s Day gifts more expensive:

• Sweets are an easy gift idea. However, the U.S. government cartelizes sugar by implementing supply restrictions, including tariff-rate quotas, to purposefully raise the price of sugar. In fact, the U.S. sugar price is almost two times higher than the world price of sugar. Given sugar’s ubiquity, food products like that heart-shaped box of chocolates, are more expensive because of the U.S. sugar program. A recent study estimates that the direct cost of this program ranges between $44 and $50 a year for a family of four.
• Looking to buy a necklace? A gold necklace is subject to a 5 percent tariff, compared to a 13.5 percent tariff for a lower-end silver necklace valued at $1.50 or less. In fact, tariffs are systematically higher on lower-end types of goods compared to their higher-end counterparts. This means that on Valentine’s Day, those earning lower incomes who want to save money when gifting someone a special necklace are disproportionately taxed.
• Candles are a popular gift but candles imported from China are subject to “trade remedy” duties of over 108 percent. Companies in import-competing industries request these duties for protection from imports and Congress’s numerous amendments to trade remedy laws have made it increasingly easier for U.S. producers to win cases against foreign businesses. The result is higher consumer prices for Americans. The most egregious amendments provide broader discretion to the Department of Commerce when considering business data in a given case. For a more in-depth analysis of the problems with the numerous amendments made to anti-dumping/countervailing duty (AD/​CVD) laws; see here, here, here, here, here, and here.
• For those wanting something more… intimate, consider what Ed Gresser at the Progressive Policy Institute recently documented—tariffs on women’s undergarments are higher than on men’s. In fact, women’s clothes and footwear are generally subject to higher tariffs than men’s versions of the same items. Moreover, as with necklaces, underwear made from lower-quality materials are subject to higher tariffs than their higher-quality counterparts.

Fortunately, flowers highlight the benefits of free trade. Roses, the most popular flower purchased on Valentine’s Day, can now be easily and cheaply purchased. Until the 1980s, most roses sold in the United States were grown in California and a dozen roses cost around $150. Today, you can buy a dozen roses for $8.99. Thanks to trade liberalization, primarily through bilateral trade agreements, including the U.S.-Colombia free trade agreement, most roses are now imported. In 2022, the U.S. imported almost $810 million worth of roses; approximately 57 percent came from Colombia and 40 percent from Ecuador.

While it’s not as romantic of a story for candy, jewelry, candles, and underwear, flowers have a happy ending. Perhaps Cupid’s bow will hit Congress to woo voters with free-market principles and lower trade barriers.

Last July, we published a blog post discussing the failure of most California local governments to meet the deadline to submit their housing elements for approval to the California Department of Housing and Community Development (HCD).

At the time, we criticized the California legislature for extending the timeline for submission of housing elements and rezoning. Housing elements were originally due to HCD by February 2022, but cities who had failed to meet this deadline were given until October 2022 to comply through the passage of SB 197. These cities were then allowed three years to adopt their approved housing elements and complete the rezoning process (which was originally required to be completed by October 2022). If local governments fail to complete their housing elements and rezoning processes by these new deadlines, they will be ineligible to receive affordable housing grants from the state. But given that this is a routine process and cities have been required to submit their housing elements for approval and rezone accordingly every eight years since the 1970s, the local governments’ argument that the original timeline was impractical does not have standing.

Despite our justifiable skepticism, we may have underestimated the California legislature’s willingness to stand up to the NIMBY lobby. While the legislature remains reluctant to cut off housing funds to non-compliant localities, state officials have instead utilized an obscure provision of the Housing Accountability Act known as the Builder’s Remedy to bypass the local governments who have deliberately chosen to not zone for adequate amounts of housing. The Builder’s Remedy discontinues the zoning abilities of localities who fail to get their housing elements approved by HCD by the applicable deadline. Developers in these cities are then permitted to propose residential projects at any height and any density as long as at least 20 percent of the units are restricted for individuals at or below 80 percent of the Area Median Income. As a result, the Builder’s Remedy allows for greater amounts and types of housing to be built in communities that are typically opposed to projects outside of single-family homes.

HCD is tracking the status of each localities’ housing element. Currently, 46 percent of jurisdictions (for a total of 249 out of 539) have housing elements that are out of compliance. All these jurisdictions are now subject to the Builder’s Remedy.

While there has been discussion of local governments challenging the Builder’s Remedy in court, there are no active cases at this point. In the meantime, it looks like more housing will be built throughout California, which is good news for the state’s embattled homebuyers and renters.

The Colorado legislature is seeking ways to address Coloradans’ lack of access to mental health services amidst a national mental health shortage. On February 9, the Colorado House of Representatives voted 56–6 to pass HB1071. The bill creates a new category of mental health specialists called Prescribing Psychologists, or RxPs.

States require clinical psychologists to have a doctoral degree (either Ph.D. or PsyD), which takes roughly 5 to 6 years to obtain after getting an undergraduate degree. Most states then require that they do at least one year of postgraduate clinical training and pass a standardized test.

In Colorado, as in most states, clinical psychologists must refer patients who need medication to licensed prescribers—usually psychiatrists. But nowadays, roughly 50% of psychiatrists don’t take insurance, and it can be difficult and costly for patients to see psychiatrists. And many small or rural communities don’t have psychiatrists. Psychologists can also refer their patients to primary care practitioners or even general surgeons like myself (even though it’s been years since I had any training or experience with psych meds) if a psychiatrist is unavailable.

More than 30 years ago, the Department of Defense (DOD) trained clinical psychologists to prescribe psych meds to increase the workforce of prescribing psychotherapists. The American College of Neuropsychopharmacology reviewed the program for the DOD and concluded:

“It seems clear that a 2‑year program—one year didactic, one-year clinical practicum that includes at least a 6‑month inpatient rotation—can transform licensed clinical psychologists into prescribing psychologists who can function effectively and safely…and expand the delivery of mental health treatment to a variety of patients in a cost-effective way.”

A Government Accounting Office review of the program concurred.

Today, RxPs practice in several federal agencies, New Mexico, Louisiana, Idaho, Illinois, Iowa, and the territory of Guam. Most jurisdictions require RxPs to obtain a master’s degree in clinical psychopharmacology, pass the national standardized Psychopharmacology Examination for Psychologists (PEP), and do 1 to 2 years of supervised clinical rotations before granting a license. In some cases, RxPs must contract to collaborate with a licensed prescribing health care practitioner for 1 or 2 years before their license is unrestricted.

You can read more about this in a Cato policy brief I wrote last October. On Wednesday, February 1, I testified before the Colorado House Public & Behavioral Health & Human Services Committee on HB1071. You can hear that testimony here. The Committee passed the bill by a 10–1 vote, with one abstaining.

Similar RxP legislation is pending in other states, including Arizona, Hawaii, and Washington.

Colorado lawmakers can help increase access to medically assisted mental health services by licensing prescribing psychologists without expending taxpayer dollars.

Pennsylvania recently followed Colorado, Maryland, and Utah in dropping college graduation requirements for many state jobs. This change will ease the task of filling positions in a competitive job market and may increase the diversity of the public sector workforce. But it could also steepen the enrollment decline now afflicting many state colleges and universities.

In his first executive order, Pennsylvania Governor Josh Shapiro opened up 65,000 state government positions to applicants without college degrees. In the order, Governor Shapiro stated “modernizing the Commonwealth’s hiring model to a model focused on skill, competency, and practical experience, rather than just educational background, will offer new opportunities for all Pennsylvanians to succeed professionally.”

Aside from state governments, many private employers are welcoming more non-degree holders. Among the companies leading the transition to “skills-based employment” are AT&T, Microsoft, and US Bank. The movement away from college degree requirements is being necessitated by labor shortages that developed in the late 2010s and have returned more recently as the economy quickly rebounded from the COVID-19 recession. It is also being pushed forward by non-profit advocacy groups such as Opportunity@Work, whose mission is “to rewire the US labor market so that all individuals Skilled Through Alternative Routes (STARs) can work, learn, and earn to their full potential.”

Last year, the Center for American Progress (CAP) published a study exploring the benefits of skills-based hiring for state and local government. CAP researchers argued that broadening opportunities for STARs would not only enable public sector employers to fill openings more quickly, but would also improve workforce diversity, noting that “a plurality of historically excluded workers—Black workers, Hispanic workers, rural workers, and veterans—are STARs.”

While removing college degree requirements is good for a diverse workforce, it may have adverse implications for higher educational institutions, which are already facing demographic headwinds. A dearth of students and the resulting lack of tuition revenue has already forced some private colleges to shut down, and public institutions are not immune from the shortage of students.

Nationwide, enrollment at public colleges has been declining over the past five years. According to data from National Student Clearinghouse Research Center, four-year public colleges enrolled 6% fewer undergraduates in fall 2022 than they did in fall 2017.

Enrollment trends vary widely across states. Arizona and Utah have seen significant increases, while Illinois, Minnesota and Ohio have experienced especially sharp declines. In Pennsylvania, state college enrollment has been falling for a decade and is now 22% below 2013 levels.

If prospective students realize that they no longer need a college degree to get a good job, they will be less likely to invest four years in higher education and take on student loans to finance it. Historically, young people have been advised to get a college degree to increase their lifetime earnings. For example, a Georgetown University analysis found that high school graduates had median lifetime earnings of $1.6 million while college students had a median of $2.8 million. But the authors went on to observe that 16% of high school students earned more than the college student median. Non-degreed professionals have traditionally been able to find high paying jobs as pipefitters, electricians, mechanics, welders, and plumbers.

With public and private employers dropping degree requirements, many more high school graduates will be able to match the lifetime income available to their college educated peers. The result is likely to be continued pressure on enrollment and tuition revenue.

Meanwhile, public higher education is becoming more expensive. According to the National Center for Education Statistics (NCES), constant dollar expenditures per full-time-equivalent student rose from $31,792 in 2009-10 to $40,989 in 2019–20, reflecting a 28.9% increase over ten years over and above the change in the Consumer Price Index.

To make ends meet, public colleges must seek additional state support, raise tuition, find alternative revenue sources and/​or make cuts. These last two options warrant more attention than they often receive. Many institutions have added administrators in recent decades and, with reduced enrollment, these non-teaching positions can be reduced without impacting the student experience.

State higher education systems can also save money by consolidating schools. Students at underutilized campuses could be transferred to another institution within the state system, freeing up their campuses for sale and conversion to other uses such as senior housing. Proceeds from the sale of no-longer-required facilities can be used to shore up the state system’s financial reserves.

With respect to new revenue sources, more public colleges may be able to replicate the successes the University of California and Arizona State University have had in attracting international students, who often pay full tuition.

College will remain a good choice for millions of young people in the decades ahead, but it is not for everyone. Public and private efforts to create more career pathways for STARS mean that a greater proportion of high school graduates will be able to join the workforce immediately rather than getting a higher education that may not interest them and will be no longer necessary for them to succeed. For state policymakers, the best response is to right-size their public colleges rather than fight the inevitable.

According to an investigation by Gabriel Kaminsky in the Washington Examiner, the U.S. State Department since 2018 has made substantial grants to a London-based outfit called Global Disinformation Index (GDI), which feeds a blacklist to advertisers to keep ads off websites like that of Reason magazine (at which I’m a contributing editor).

Other publications on the blacklist as purported disinformation purveyors include the New York Post and the Washington Examiner. The London-based group describes its mission as “Disrupting the business model of disinformation.” You can download one of its relevant reports here.

The group has received upwards of $300,000 from two State Department-backed entities, the National Endowment for Democracy and the Department’s own Global Engagement Center since 2018, according to the Examiner (a publication itself a target of the list).

Kaminsky writes that “GDI compiles a ‘dynamic exclusion list’ that it feeds to corporate entities.…The list.…has ‘had a significant impact on the advertising revenue that has gone to those sites,’ said GDI’s CEO Clare Melford on a March 2022 podcast.”

GDI has also listed the “ten sites with the lowest level of disinformation risk.” On that list: National Public Radio, ProPublica, Buzzfeed News, and HuffPost.

Last month, citing GDI’s work, attorney Hans Bader noted that the “concept of hate speech has expanded among progressives to include commonplace conservative views about racial or sexual subjects.” The Examiner’s Conn Carroll notes an instance in which GDI branded as disinformation and “discrimination” an opinion column he wrote in which he had summarized the (socially conservative) findings and views of Brad Wilcox of the University of Virginia, a visiting scholar at the American Enterprise Institute.

Microsoft, which owns a large advertising service, “has launched a review of its relationship with GDI and has suspended usage of the group’s services,” following the revelations, the Examiner reports.

I myself am fine with advertisers’ using lists to distance from content they find controversial or downbeat (no placements next to stories about car crashes or wars — or, if they see fit, no placement next to writings like mine). I’m equally fine with the rest of us using our speech to blast list-compilers’ choices as dumb and biased.

What I do know is that government and its functionaries must not get involved in pressuring or “helping” advertisers on these matters. In practice that can mean stepping selectively on the oxygen hose of ad revenues that supplies an adversary press.

Note that the danger can come from more than one direction. At the Congressional hearings that are coming, companies must also be free from fear of official retaliation should they choose *not* to advertise. Either way, state action that promotes blacklisting needs to end — now.

Related: I just published an opinion piece with the syndicated InsideSources service on how proposals to curtail so-called disinformation about elections “can curtail legitimate speech and give the government power it’s likely to misuse.” And as longtime Cato readers know, it’s nothing new for government officials in this country to use their clout against the business interests of opposition publications and broadcasters.