In this interview, I talk with Robbie Sequeira, a Stateline reporter based in Chicago, about his piece that ran in the Minnesota Reformer on September 17: “Trump admin aims to shift homelessness grants toward addiction treatment, enforcement.” We also spend some time discussing Chicago’s seven-pillar model they use to provide housing and services for the homeless.
Sequeira’s article caught my attention because of the funding mechanism at the center of it. Sequeira writes that “the Trump administration is proposing to provide more money to localities that prioritize treatment-first policies such as sober living, more cooperation with law enforcement and more temporary and transitional housing.” That funding runs through bonuses in the federal Continuum of Care program. The Trump administration, through the Department of Housing and Urban Development (HUD), is challenging states to reverse a decade of Housing First policy in favor of an approach that places greater emphasis on services “concentrating on improving employment income and meeting behavioral healthcare needs.”
Homelessness was a top priority for the mayors of San Francisco, Portland, and Seattle when David Therkelsen and I visited this past summer. As Sequeira reports:
HUD pointed to policies in Anchorage, Alaska; Houston; Portland, Oregon; and San Francisco as evidence that states and cities are already shifting their homelessness responses toward public camping restrictions with emphasis on treatment and recovery as a condition to housing support.
Minnesota is one of 22 states suing HUD to overturn new application requirements meant to push states toward treatment-first policies such as sober living, closer cooperation with law enforcement, and more temporary and transitional housing. The fate of the lawsuit is uncertain: courts have so far blocked HUD's new rules on procedural grounds, but HUD's latest attempt could clear the way for approval. A public comment period is open now through October 13. An individual or organization can submit comments here.
Depending on the outcome of the lawsuit, Minnesota could be forced to decide whether to accept fewer federal dollars and continue its Housing First and harm reduction practices, or begin building out treatment-first and transitional housing policies. Sequeira argues that more states could develop hybrid models instead of letting the two philosophies “go to war with each other.”
Preparing for the Future
Both philosophical camps say they have the data to back up their positions. HUD claims the Housing First model has failed; others cite data showing Housing First has succeeded in reducing the number of unhoused people. There is no single source of contemporary data that stands up to scrutiny. Many of the data sets referenced are five to ten years old and don’t account for the aftermath of COVID-19, rising interest rates, the lack of building in many cities, or the highly addictive nature of modern formulations of fentanyl and methamphetamine. Each municipality has different factors in play, just as every individual has a unique reason for being homeless. “Will a one-size-fits-all approach work for one person, or will it work for a whole group of people?” Sequeira asked in the interview.
What Minnesota can do now is prepare for the future. Either philosophy calls for more behavioral health services, an area where Minnesota lacks a high-functioning system. The state ranks near the bottom nationally for psychiatric beds per capita, with 590 adult beds and fewer than 200 for children and adolescents. Minnesota is simply unprepared for an increase in people with behavioral health needs. If the state wants to shift toward sober living facilities and drug treatment centers, a significant level of investment and oversight will be needed there too.
Building capacity isn’t cheap. Constructing a single psychiatric bed in a medical facility with comprehensive wraparound services costs an initial $1.1 million, with annual operating costs ranging from $150,000 to $350,000 per bed. [1] In 2025, the state legislature invested $55 million from its infrastructure package and another $20 million from human services to add 50 beds at the Anoka-Metro Regional Treatment Center. Sue Abderholden of NAMI Minnesota said, “It won’t solve it, but it’ll make a big dent.” [2]
If Minnesota is serious about addressing the homelessness crisis, it will need more investment paired with significantly more oversight. Minnesota continues to struggle with a significant fraud problem in its social welfare programs. Hennepin County shut down its $2 million Operation Metro Surge business assistance program early after finding that screening out fraudulent applications cost more than the program actually paid out. People won't support a more robust social safety net if fraud keeps turning it into a national embarrassment. If it costs $200,000 a year to operate a psychiatric bed, the state has two options: run the facility with its own employees, or dedicate another $50,000 per bed to oversight that ensures private operators actually deliver the outcomes they're paid for. Drug treatment carries its own price tag: evidence-based substance abuse and healthcare treatment averages $56,630 per resident in Minnesota [3], though costs vary considerably depending on the setting and level of care required.
According to KFF, a leading health policy organization, "From 2019 to 2025, the number of people experiencing homelessness on a single night increased by over 30% to nearly 746,000 people, with nearly four in ten (36%) staying in unsheltered locations." That trajectory demands a real debate about policy and outcomes, not a symbolic one. The approaches cities are taking now aren't working. It's time to ask whether current systems are delivering results for unhoused individuals and their communities, and to act on the answer. Regardless of where a person stands on Housing First versus treatment-first, nothing changes without the infrastructure to back it up.
[1] Brian Johnson, "Anoka Psychiatric Hospital to Add 50-Bed Facility," Finance & Commerce, March 4, 2026, https://finance-commerce.com/2026/03/anoka-psychiatric-hospital-50-bed-expansion/
[2] Allison Kite, "Minnesota Shifts More Prisoners to Psychiatric Beds," Governing, June 17, 2025, https://www.governing.com/policy/minnesota-shifts-more-prisoners-to-psychiatric-beds.
[3] https://rehabnet.com/minnesota/
