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Phoenix & Tucson Poured Hundreds of Millions into Homeless Crisis. Things Only Got Worse

June 6, 2024

With law and order giving way to death and destruction as homeless encampments overrun the streets, Arizona’s two largest cities have allocated hundreds of millions of dollars since 2021 in their failed attempts to solve the crisis, a new Goldwater Institute investigative report reveals. Yet this astounding sum, which includes more than $180 million just in Phoenix alone, has barely moved the needle—all as city officials call for even more money to be spent.

In fact, the number of homeless people rose 92% percent between 2018 and 2023 in Phoenix (with a miniscule drop this year), and has risen 60% since 2018 in Pima County, which includes Tucson. Moreover, in Phoenix, the Office of Homeless Solutions only accounts for a small fraction of the dollars it has allocated—$47.6 million of the city’s spending—and even then, the breakdown is vague and incomplete.

Taxpayers are entitled to a clear and accurate accounting of the vast resources that their governments have dedicated to homelessness, especially as this nationwide epidemic spreads pollution, disease, and violent crime through some of our nation’s largest cities. An understanding of exactly how much money is allocated for this ongoing crisis and where it is being spent is critical in determining what works, what doesn’t and what should come next.

The Goldwater Institute conducted a lengthy investigation to determine how much funding is going toward homelessness services in each of these cities, where it’s coming from, which vendors are receiving contracts for homelessness projects, and how that money is being used. The answers we found are sometimes surprising and do not always present a clear picture.

The report’s major finding are as follows:

Phoenix:

  • Goldwater’s investigative research reveals Phoenix has allocated over $180 million to the homelessness crisis since 2021, far more than the $140 million reported by the Phoenix Office of Homeless Solutions. That figure soars to over $250 million if certain federal, state, and private funds are counted.
  • The Phoenix Office of Homeless Solutions only accounts for $47.6 million in spending — but even that figure is vague, as the expenditures listed include incomplete information.
  • Phoenix has entered into multimillion-dollar contracts with the same small group of vendors, barely making a dent in the homeless population.

The following vendors have the largest cumulative contracts for homelessness, all of which are over $1 million, respectively. The chart below includes Phoenix’s costs for these services, as well as the “total service cost” (i.e. any combination of Phoenix/state/federal/private donations, etc.):

 Tucson:

  • While Pima County can account for just $17.8 million in homelessness spending since 2021, estimates from other sources range from $27 million to $210 million.
  • The lack of clear and transparent accounting makes it difficult to understand how much the county is actually spending on the crisis or analyze whether it’s being used wisely.

It’s clear that blindly throwing taxpayer dollars at the homelessness crisis—while failing to keep track of where it’s going—is not solving the underlying problem.

But it gets worse. Due to government’s refusal to enforce the law, violent crime, public drug use, and vandalism run rampant in lawless homeless encampments. Neighboring residents, business owners, and workers live and work in fear, while also suffering financial burdens of cities’ failure to govern. Consider that it took a court order for Phoenix to finally clean up its homeless “Zone”—one of the nation’s largest homeless encampments—after years of shunting homeless people into the area. Meanwhile, the city continues to fight that decision.

That’s why a first-in-the-nation Goldwater Institute reform, which will be on the 2024 general election ballot in Arizona, compensates the residents, businesses, and property owners whose livelihoods are being destroyed as municipalities refuse to enforce the law. The law allows property owners, who have been forced to shoulder mitigation expenses incurred as a result of a municipality’s purposeful failure to enforce nuisance regulations related to the homeless crisis, to receive a refund for damages up to the amount of their property tax liability.

A seemingly bottomless pit of taxpayer dollars won’t solve the homelessness crisis. Arizona taxpayers, and the homeless themselves—who shouldn’t be forced to live on the streets in areas riddled with violence—deserve better.

Read the report here.

 

 

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