I'm highly unconvinced of the proposition that most homeless are severely mentally ill; the data I've seen doesn't support it. That's some of it, and also addiction. But a lot of them just can't make the rent.
Agree on the underbuilding.
Most homeless people aren't mentally ill. But those "huddling in the rain" mostly are, or are at least addicts.
Non-mentally I'll homeless people are rarely "street people". They live in a car or with friends or in a shelter. Plenty of them have jobs.
There is a difference between "most homeless" (your comment) and "most visibly homeless" (comment you're replying to).
IIRC, most people who obtain "homeless" status only keep it for a short time, and don't live on the streets during that time.
You'll get very different statistics if you count transitions into (or out of) homelessness over some window, vs systematic point-in-time counts of current homeless status, vs point-in-time counts of people camping on the street, vs trying to measure QALYs.
This meta-analysis puts it at 67%: https://jamanetwork.com/journals/jamapsychiatry/fullarticle/...
What data have you seen which doesn't support it?
One of the challenges here as an ex-paramedic in the PNW who has certainly seen their fair share of homeless is that several of the more prominent studies use HUD's definition of "severe mental illness" that is far more conservative than you or I would expect...
"Requiring hospitalization more than once a month, on multiple occasions in a year".
And that number, per HUD, is 22%.
If you want to look at "untreated mental illness" in the homeless, now you're above 50%.
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Good thing that GP didn't say that most homeless are severely mentally ill.
As an anecdote, two people in my family have been or are homeless (don't know their current situation) entirely because they are incapable of continually making basic, smart financial decisions. At the level of "I decided to just not show up to work today" or "I spent my entire week's pay on a new toy". They both received enormous financial and social support from various people in the family, but always eventually just end up spending all their money somehow, or they get fired, or even just quit their job(!). Both eventually ran away from the responsibilities they built up into a different state.
I don't know if we should call this inability to make basic, smart financial decisions a mental illness or not, but it's something. And these 2 people aren't/weren't even what I would consider visibly homeless. At least as long as you didn't see them living in their car behind a convenience store.
Starting with the framing that housing is just too expensive makes the problem simple. You build more housing, or you subsidize housing for these people, or somehow just inject money into services for them so they can get back on their feet. But if that's not the core issue for some or many of these people, how do you actually help these people? How does a society help people who are incapable of handling their own finances? That's where the hard questions begin.