Homelessness Isn’t Just About Rent: Denver’s Spending Tells a Bigger Story

By Shaina Cole | Contributing Writer, Rocky Mountain Voice

Denver once bought a motel to help move people off the street. Two years later, it made headlines for trying to sell that same property for ten dollars. 

Denver’s homelessness debate almost always circles back to housing. Rents are high. Wages trail behind. Even when Denver adds housing, the gap doesn’t seem to close. From there, the “it’s housing” argument almost writes itself.

But recent data suggest the drivers run deeper than housing alone.

A January 2026 analysis from the Common Sense Institute looked at homelessness trends across the country and found that while housing affordability matters, it is not the strongest factor tied to homelessness — especially when it comes to people living on the streets long-term or cycling through chronic homelessness.

Instead, CSI found stronger links between homelessness and drug use, crime, labor participation, government spending, and policing levels.

Denver fits that pattern almost exactly.

Rent Matters — But Other Factors Matter More

The CSI analysis compared homelessness rates with ten different variables, including rent affordability, measured by the number of hours workers must work at average wages to afford average rent. States where workers must spend more hours at average wages to afford average rent do tend to have more homelessness.

CSI found the statistical link between homelessness and rent affordability was moderate. The link between homelessness and illicit drug use was much stronger. Drug prevalence showed a higher correlation with homelessness than rent prices alone.

Labor productivity and overall state spending also tracked more closely with homelessness rates than housing costs.

In simple terms, homelessness tends to be highest in wealthy, high-spending states where drug use is widespread and crime is higher — not just where housing is expensive.

Denver Has Spent Heavily — With Few Entry Requirements

That context matters when looking at Denver.

Earlier CSI reports show just how fast spending grew across the Metro Denver homelessness system.

Over three years ending in 2023, metro-area homelessness spending exceeded $1.9 billion.

In a single year, the Denver region crossed the $500 million mark on homelessness spending.

Once you spread that spending across the homeless population, the numbers grow fast. The per-person cost varies widely. CSI estimates annual spending can range from about $40,000 to more than $100,000, depending on how individuals are counted and which programs are included.

Much of this system operates under a Housing First model. Housing and services are provided without requiring employment, sobriety, or treatment as a condition of entry. The system encourages work and treatment, without making either a condition.

The model starts from the belief that housing is the root issue.

Chronic and Street Homelessness Tell a Different Story

When CSI broke homelessness into categories, the picture shifted.

In states with higher levels of chronic homelessness, policing levels stood out. Those states tended to have fewer police officers per capita, a link that showed up more strongly than rent affordability.

The pattern repeats on the street. For unsheltered homelessness, rates top the charts for crime rates, rent burdens and policing levels. 

Drug prevalence shows the strongest link in cases among severe mental illness or long-term substance abuse.

Colorado and Denver Remain Near the Top

Even with years of heavy spending, Colorado still ranks near the top nationally.

The state ranks ninth in total homelessness, seventh in chronic homelessness, and tenth in unsheltered homelessness, according to CSI’s state rankings. It also ranks seventh for homelessness tied to severe mental illness and substance abuse.

Among the nation’s largest metro areas, Denver ranks fifth in total homeless population and near the top in chronic and substance-related homelessness.

What the Data Suggests

When making conclusions from their data, the CSI is cautious. Causation is not always implied by correlation.

Higher spending might mean higher needs. There are very complicated links between drug use, crime, and homeless persons.

Homelessness is influenced by different factors. A system targeting housing access solutions doesn’t always address factors that keep people on the street long term. 

By mid-2025, the federal government adjusted course, opening HUD funding to programs that expect more than housing alone.

Housing helps stabilize people. It does not fix the mental health, addiction, and work issues that keep homelessness in place long term.

The Broader Picture 

Housing costs matter. No serious analysis disputes that.

But Denver’s experience — rising spending, limited conditions, and persistently high levels of chronic and unsheltered homelessness — mirrors the national data CSI highlights.

Drug prevalence, crime conditions, labor productivity, and enforcement levels all appear alongside homelessness at levels that rival or exceed the influence of rent.

Understanding those relationships doesn’t end the policy debate. It does help explain why, despite hundreds of millions spent locally and billions nationwide, the most visible forms of homelessness remain largely unchanged.