President Trump’s plan to relocate the homeless population of Washington, D.C., to surrounding areas is making waves. Homelessness in the U.S. is a humanitarian challenge, but it’s also an economic one. And Trump’s move underscores a much-shared feeling that efforts to solve homelessness are not fruitful.

Cities are burning through billions on law enforcement, ER visits, and makeshift shelters. That money doesn’t just vanish; it shows up later as higher taxes, shaky budgets, and even families packing up to move somewhere else. Trump’s plan to combat this underscores a growing federal role in what has historically been a local responsibility.

One potential, promising solution to homelessness is evidence-based solutions, like the Housing First model, which cities across the U.S. are using. The models prioritize getting people into permanent housing quickly, then layering in supportive services such as job training, mental health care, and addiction treatment.

So far, this approach has seemed to reduce chronic homelessness and lower public costs, mainly by decreasing reliance on emergency shelters, policing, and hospital services. It stabilizes individuals, but as a bonus, it also creates a foundation for broader economic recovery in affected communities.

Why Solutions to Homelessness Matter

Economic Drag on Cities and Businesses

The financial toll of homelessness is steep. Emergency services and public safety costs weigh on municipal budgets, often leading to higher taxes. In major cities, retail, real estate, and tourism suffer as foot traffic drops and storefronts close. Homelessness doesn’t just scare tourists. It scares off capital.

President Trump’s response to the D.C. homelessness crisis is to inject energy to form concrete solutions and not ignore a problem that cannot be ignored any longer. We bet that evidence-based solutions will be accepted as the method to move forward.

Private Enterprise at a Crossroads

Where the government sees a crisis, entrepreneurs see a market. Affordable-housing developers, modular construction firms, and social service providers can benefit from increased public and private spending.

Emerging Models Offer Scalable Solutions

Evidence-based approaches like the Housing First model integrate permanent housing with supportive services. They work because you cannot file your job application while you are sleeping under a bridge.

Cities that have implemented Housing First strategies have seen measurable declines in chronic homelessness and more stable local economies over time.

The Play on Homelessness Solutions

While homelessness erodes municipal budgets and weakens business climates, it also forces cities and policymakers into urgent spending cycles. The crisis-driven money will come, so invest in where it lands. Investors positioned in the sectors tied to housing and community infrastructure will find the upside from this trend. Click our recommendations below to see why these are the winners you should bet on.

Invitation Homes (INVH)

American Homes 4 Rent (AMH)

iShares Residential and Multisector Real Estate ETF (REZ)

Bottom Line

Homelessness is an expensive urban crisis, but it also unlocks significant investment opportunities in affordable housing and healthcare since cities are throwing money at solving this crisis. Following innovative economic models and policy trends can position investors to thrive as cities transition from crisis management to sustainable solutions.

Read today's edition.

November 28, 2025