Federal Homelessness Policy Shifts From Housing to Treatment

Federal homelessness policy is being rebuilt around co-occurring disorders. In August 2026, the Department of Health and Human Services, the Office of National Drug Control Policy and the Department of Housing and Urban Development introduced a “Treatment First” model.

This effort puts addiction and mental illness treatment at the center of homelessness programs rather than treating housing as the first step.

For anyone navigating dual diagnosis treatment, this is a signal about where federal dollars and program design are heading. It’s also contested as clinicians who study the question have pushed back on the premise.

Federal Agencies Step In

On August 12, HHS Secretary Robert F. Kennedy, Jr., ONDCP Director Sara Carter, and HUD Secretary Scott Turner released a document titled “Best Practices Toolkit: Addressing Homelessness and Addiction Through Treatment First.” Five days later, on August 17, Kennedy and Turner sent a joint letter to behavioral health and housing partners formalizing the approach.

The toolkit describes a whole community model with staged points of care. Enrollees begin with emergency care during an immediate crisis and move through residential treatment before ending in self-sufficiency. This approach prioritizes substance-free housing and phased housing tied to local resources.

The framing explicitly breaks from Housing First. This older model has guided federal homelessness funding for more than a decade and prioritized stable permanent shelter before addressing other conditions.

“We cannot solve homelessness by funding systems that perpetuate it,” Kennedy asserted. Turner argued that when it comes to the overlapping homelessness and addiction crises, existing housing programs alone aren’t enough.

The Co-Occurring Disorders Numbers

The agencies anchor the shift in prevalence data. According to figures cited by HUD and HHS, roughly 75% of homeless Americans struggle with drug addiction and nearly 80% have a mental health disorder. The toolkit also reports that more than 1.4 million people in 2025 were homeless or living in taxpayer-subsidized housing. Non-elderly homeless people have a mortality rate 3.5x higher than people with homes.

Those two prevalence figures overlap heavily because it’s the practical definition of co-occurring disorders.

Co-occurring disorders play a key role here. Dual diagnoses describe the presence of both a substance use disorder and a mental health condition. The two interact. Untreated depression, schizophrenia can drive substance use and vice versa. 

Integrated treatment addresses both conditions together, with one clinical team rather than sequentially or in parallel. Sequential care describes situations where folks resolve one condition before a program will treat the other. But this model can fail as people fall out of care entirely.

Clinicians Weigh In

The response from researchers has centered on services, not the order they are given.

Vicky Stergiopoulos is a physician and researcher who studies homelessness and mental health. She believed officials should invest in co-occurring conditions, social resources and community integration support while maintaining a housing first approach. She relayed how a treatment first approach won’t perform better unless system capacity grows alongside it.

That critique lands on a familiar problem in behavioral health. Programs equipped to treat both conditions have historically been a minority of the field. Reordering the sequence of services doesn’t create integrated capacity where it doesn’t exist.

Treatment Options for Mental Health and Addiction

Whatever happens at the policy level, the questions a person or family should ask a program stay the same:

• Does the program treat both conditions, or will it refer to mental health programs elsewhere?
• Is a psychiatric prescriber on staff, and can medication be started and adjusted during treatment?
• Which therapies are offered? Behavioral therapy and trauma-focused approaches have evidence behind them for co-occurring presentations.
• What level of care is recommended? Residential and outpatient programs serve different levels of acuity.
• What happens on discharge, and who coordinates it?

Care Available Everywhere

Programs vary widely in how much mental health care they actually deliver. Our browsable directory lists behavioral treatment centers and mental health treatment facilities that treat co-occurring disorders. Search by state to compare programs or call 800-908-4823 (Sponsored) to talk through what level of care fits.

For those in crisis, call or text 988 to reach the Suicide and Crisis Lifeline, available 24/7 at no cost.

Author

Courtney Myers, MS

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Courtney Myers has more than 15 years of experience in online writing and editing. Since graduating from N.C. State University with an MS in Technical Communication, she’s helped clients improve their visibility and reach through expert-level content creation. She specializes in addiction recovery and behavioral healthcare topics.

Editor

Peter Lee, PhD

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Peter W.Y. Lee is a writer and historian of American history during the Cold War. His primary focus is the relationship between youth and popular culture and its impact on U.S. society during the twentieth century. He has published widely on how the public has used popular culture as a mechanism to address political and social shifts throughout time