Who’s Profiting off of the Criminalization of Homelessness?

From the Trump administration to Democrats in California, responses to the homeless crisis in the US continue to ignore the main drivers of the problem and aim to make the unhoused magically disappear. Like so many of the faux social policies in the US, this one increasingly looks designed for big private players to profit off the disappearing. .

Let’s first look at the main tenets of the US response at both the state and federal level before examining how such ruthless policy offers opportunities for economic elite to cash in on the added layers of cruelty.

Trump’s July executive order frames the country’s homelessness crisis as the sole product of mental illness and drug addiction and helps make it easier to arrest and involuntarily commit the homeless. This is a continuation of a years-long effort by American elites to redirect attention away from the root causes of homelessness. According to a study from UCSF’s Benioff Homelessness and Housing Initiative last year (one of the deepest dives into California’s crisis in decades), the number one problem that is fueling the homelessness crisis is the increasing precariousness of the working poor.

Trump’s order largely copies plans that California Democrat Governor Gavin Newsom has rolled out in a Democrat super majority state in recent years. (There’s always plenty of bipartisanship when it comes to wars or kicking the poor). Unsurprisingly, California’s efforts have done nothing to bring down the number of people sleeping on the streets. Neither has the criminalization wave across the country—although it could potentially be contributing to the rebound in the US’ exceptional prison population:

At the same time, homelessness numbers continue to skyrocket, increasing 18 percent, to 771,480 people during the 2024 “point in time” census, which is widely believed to be a massive undercount.

A primary reason why criminalization efforts don’t bring down the number of homeless is that even if the state is arresting and committing people, that does nothing about economic conditions driving people onto the streets. So one person arrested might be replaced by three more who just succumbed to American rapaciousness, such as poverty wages that can’t keep up with astronomical rents (thanks corporate landlord collusion and homebuilder cartels constraining supply!), the explosion of vacation rentals, a healthcare system in which we pay for insurance that denies us care and bankrupts the unlucky, social security payments that don’t keep up with rising rents, and virtually no social safety net.

We can see that many of these conditions help corporations profit off of housed Americans, but the cashing in doesn’t stop once individuals are squeezed out of their home. Once Americans are evicted, there are vultures there every step of the way—from extended stay hotels and rehab facilities to mental health providers and prisons. Private equity plays a role in nearly all of them, such as owning the apartments doing the evicting and then the extended stay hotels which those who are evicted often turn to as an expensive last resort shelter. Here they are sucked dry of their remaining dollars before being thrown onto the streets. Private equity is then involved in potential “solutions” to this homelessness, such as mental health treatment and prison healthcare—its dream setup of virtually no oversight, a captive audience, and steady revenue stream.

Into this system enters Trump 2.0, a par excellence partner-in-crime administration to the private equity vampires. Policies enacted by Trump thus far promise to increase the number of homeless, as well as up ineffective but profitable state intervention while simultaneously doing away with the entire concept of “housing first”—the ONE effective strategy working at the national and local level to get people into stable homes.

Is the government getting it so wrong by accident? Or is it getting very right for its benefactors?

The Criminalization of Homelessness. Cui Bono? 

There isn’t any data (that I can find) on the number of homeless arrested since the Supreme Court City of Grant Pass v. Johnson decision, which upheld a ban that criminalizes sleeping in public places.

The result has often been law enforcement simply tearing down homeless encampments, trashing individual’s belongings, and telling them to move along. Where exactly they are supposed to go remains a mystery.

But by adding to the reasons someone experiencing homelessness can be arrested, it does help intensify the homelessness-incarceration complex. Here’s what we already know, courtesy of the University of Cincinnati Law Review:

People experiencing homelessness are 11 times more likely to be arrested than those who are housed…These individuals face increased barriers with respect to court appearances, inability to pay bail, citations, and fines, elevating their risk of conviction.[28] The system is set up to criminalize a person’s status of homelessness rather than helping to address the root causes…

Criminal justice involvement in this issue perpetuates a negative cycle of homelessness and jail, further complicating an individual’s chance of breaking that cycle.[29] Once released from jail, individuals experiencing homelessness prior to jail often return to the streets, only this time facing increased difficulty in finding stable housing.[30] The presence of a criminal record greatly complicates an individual’s chance of securing gainful employment, as many employers may outright disqualify applicants or discourage application by requiring disclosure of criminal history.[31] Additionally, homeless individuals lack access to reliable transportation, suitable clothing, and identification documents to secure employment, making it increasingly difficult to successfully navigate the labor market and break the vicious cycle.

Failure to appear in court or pay low-level citations for quality-of-life offenses associated with homelessness, such as camping outside, public urination, or loitering, can often “indirectly result in arrest and jail time.”

So naturally the prison industry is one of the biggest beneficiaries of the eviction-to-prison pipeline. And in the US, that can sprinkle benefits around to the overlords.

Worth Rises’ The Prison Industry: Corporate Database exposes over 4,000 corporations and investors that profit off mass incarceration. Peruse the list and you’ll notice plenty of familiar names—from big Trump backers like private prison operators, as well as corporations that use forced prison labor.

Healthcare to prisoners is also a major opportunity. With the Los Angeles County jail system the largest “mental health care provider” in the country, those who profit off the police state are more than happy to market themselves as mental health providers, as the Prison Policy Initiative explains:

Jails and prisons are often described as de facto mental health and substance abuse treatment providers, and corrections officials increasingly frame their missions around offering healthcare.  But the reality is quite the opposite: people with serious health needs are warehoused with severely inadequate healthcare and limited treatment options. Instead, jails and prisons rely heavily on punishment, while the most effective and evidence-based forms of healthcare are often the least available.

Private equity plays a major role in the private prison healthcare industry, which was estimated to be a $9.3bn business in 2022.

The Guardian recently looked into two of the largest behemoths in the prison health industry – Wellpath and Corizon – which are both backed by private equity investors. What they found wasn’t pretty but expected when you combine private equity with captive customers. It’s like healthcare horror stories from across the country, but on steroids inside prison walls, including:

• Staff shortages.
• Delays in care.
• Severe negligence.
• Preventable deaths.

One 57-year-old woman with a perforated stomach, for example, was given tylenol and left alone in a cell where she died. Colleen Grogan, a professor at University of Chicago’s school of social work, tells the Guardian that the reason for Wellpath and Corizon’s continued existence, despite facing scrutiny, is simple: “These private equity firms have a ton of political power, and prisoners are the most vulnerable. The political power dynamics are about the worst they can be.”

That political power has also bought them extra room to profit off of abuse:

And private equity firms have another layer of protection from liability, according to [Brendan Ballou, former special counsel to the Department of Justice’s anti-trust division and author of the book, Plunder: Private Equity’s Plan to Pillage America]. Past court rulings make it difficult to hold private contractors liable for wrongdoing in prisons, and “corporate veil piercing law”, which protects private equity firms from being held responsible for the actions of their investments, makes it very difficult for victims to go after the firms behind the prison health companies that allegedly hurt them. So private equity firms know that even if their prison health investments face a lot of liability, they can remain relatively untouched.

Rehab and Mental Health Service Profiteers

Rehab and mental health treatment might sound like a sound strategy to help individuals who are homeless. After all, drug use and mental health problems are common—although, again, it’s important to stress that those are not believed to be the drivers behind homelessness. In many cases these issues arose or were worsened after becoming homeless. It’s not hard to understand why. Even the threat of losing one’s shelter—let alone it actually happening—can be an enormously stressful experience.

The UCSF study found that many succumb to drugs as a way to numb the pain of being chewed up and discarded by American society. It is also well-established that poverty and homelessness can lead to or worsen physical and mental health. For example, a recent study published in the Journal of Psychiatric and Mental Health Nursing finds that food insecurity is linked to mental illness. And studies have shown PTSD is common after losing one’s home.

Still, rehab and mental health treatment couldn’t possibly hurt, right? But when you start to remember what a pile of steaming fraud and abuse the American healthcare system is, it starts to look less like an avenue of assistance and more of a way to cash in on despair.

Here’s the Wall Street Journal a few weeks back on drug rehab centers that lure in patients to bilk their insurance before leaving them on the street:

Fraud has become a multimillion-dollar problem in America’s booming rehab industry, according to state officials, lawsuits filed by insurers and former clients, and federal indictments and convictions.

The rehabs are often in locations that people might be tempted to travel to, such as beachside cities in Florida. It’s become especially prevalent in California, where operators have discovered a steady stream of revenue by luring people with addiction from across the country and billing their private insurance. Lawsuits and federal cases allege that rehabs can charge insurance hundreds of thousands of dollars for a few months’ stay, but offer little in the way of treatment. 

Oftentimes, illicit drugs are common at the run-down facilities patients are shuttled between. Recruiters help patients purchase plans under the Affordable Care Act that include federal subsidies and oftentimes no out-of-pocket costs for individuals below a certain income level.

What happens when the insurance money runs out? Patients who are sometimes now far from home are dumped on the streets without even a referral, potentially with a worse drug habit than when they began “rehab,” where they join the swelling ranks of the homeless.

“They’re just churned like cattle until they’re dead or homeless on the streets,” Dan Kreitman, who ran the special investigations unit at insurer Centene, told the WSJ.

Other profiteers have sunk their teeth into mental health, which might use a different strategy than rehab center recruiters, the results are the same: making it even more difficult for those who need help.

The Trump administration and states turn to forced institutionalization happens to coincide with private equity spreading its tentacle through the mental health care industry, largely driven by Affordable Care Act provisions requiring coverage of such care for as long as patients need it. From a recent ProPublica investigation:

More than 40% of inpatient mental health beds were operated by for-profit entities as of 2021, according to unpublished data from Morgan Shields, an assistant professor at Washington University in St. Louis who studies quality in behavioral health care. That’s up from about 13% in 2010.

And with that trend comes the usual degradation of services. ProPublica found that more than 90 psychiatric hospitals violated the Emergency Medical Treatment and Labor Act in the past 15 years. Roughly 80% of them are owned by for-profit corporations, and only a few have faced even meaningless fines. In most cases the U.S. Centers for Medicare and Medicaid Services and the inspector general of the Department of Health and Human Services simply ignore the law breaking.

Chief among the violations are efforts to increase profits by denying care to patients without insurance or with lower-paying forms of insurance and turning away more complicated patients who might require more staffing and other costs.

Outside of these schemes, wait times to access services can be excruciatingly long. From the Vera Institute:

In the United States, people must wait an average of 48 days to access mental health or substance use services, and many struggle to afford needed services that are inaccessible without insurance.

This is the poison pill in Trump, as well as Democrat plans to “treat” the homeless. They want to blame mental health and addiction, but don’t want to spend the massive amounts of money that would be required to effectively provide services. They’re effectively bypassing the simpler, cheaper, and more humane solutions of affordable housing and accessible voluntary care to the most expensive and most invasive—without providing the funding for it.

In Oregon, for example, it costs about $321,000 to commit one person at the state hospital for six months. You can do the math from there.

And even if the US had the capacity to forcibly treat people as Trump’s plan prescribes, studies show that coerced treatment is not effective —and as evidenced by Newsom’s “CARE Courts” in California, judges are reluctant to force people into a broken state conservatorship system and shoddy facilities.

The fact that these forced treatment policies are designed to fail make them appear as a smokescreen for the real plan. The one area that does keep receiving plenty of funding, though, is prisons—thanks to the bipartisan tough-on-crime consensus. And so what ends up happening is that everything gets funneled into the criminal justice system. Again from the Vera Institute:

While waiting lists for community-based psychiatric and mental health services grow longer, jails and prisons fill up with people experiencing treatable mental health conditions. Nonviolent behaviors associated with mental illness that could be avoided with adequate support—like loitering, disorderly conduct, and trespassing—are criminalized, resulting in the incarceration of people who need treatment, not punishment.

It’s an unmitigated disaster on all fronts. Let’s review:

• Attention is being intentionally diverted away from the real drivers of homelessness.

• This ensures more will lose housing and end up on the streets.

• That experience can lead to or worsen addiction or mental health problems.

• Legitimate treatment is hard to access.

• Scams are common, making homeless individuals less likely to accept treatment.

• Coerced treatment is ineffective, and the funding isn’t there to even do it.

• And in the end, the eviction to prison pipeline keeps churning faster.

It’s failure every step of the way and ones that are being doubled down on. Barring some sort of international intervention, it’s hard to see it getting any better. This is bipartisan policy.

Democrats already have their Silicon Valley-pleasing “Abundance” teed up for 2026 and 2028. This neoliberal philosophical retread promises to cut red tape and give more power to Wall Street and Silicon Valley, which already dominate what passes as social planning in the US.

And if that power continues to accumulate in these eugenicist centers, there are plenty of even more dystopian possibilities, as detailed here:

🚨 Trump just signed an executive order allowing forced institutionalization for people with mental illness.

And at the same time? His admin is rolling out a nationwide health surveillance system with Google, Apple, Amazon, and CVS.

Your mental health, meds, vitals…all… pic.twitter.com/9DGbame4Qn

— Jesus Freakin Congress (@TheJFreakinC) August 1, 2025

As of now, the Trump administration is doing everything it can to accelerate the problem. Here are a few examples:

• It is cutting mental health programs.
• It is decimating services for people with developmental disabilities.
• It just ended federal support for disabled Americans facing homelessness.

Does it get any clearer than trying to increase the number disabled who are unhoused while simultaneously criminalizing homelessness?

Wait, there’s more. Mass firings have begun at the Department of Housing and Urban Development (HUD). The ultimate goal there is believed to be the stripping of some four million people of federal housing assistance. Here’s ProPublica on the yet-to-be-published rules:

The rules would pave the way for a host of restrictions long sought by conservatives, including time limits on living in public housing, work requirements for many people receiving federal housing assistance and the stripping of aid from entire families if one member of the household is in the country illegally.

Should the rules take effect, it would mean roughly half of the eight million-plus individuals receiving federal housing support could lose it. Who are they? According to HUD, the majority are elderly, disabled or children. The average family that lives in public housing or receives housing vouchers already has a family member that works, but they make less than $20,000 annually.

Many of those who might lose assistance would likely become homeless as a result.

And HUD’s own analysis shows that many public housing units may initially be left vacant as a result of the proposed rules.

Perhaps investors can snap them up at bargain prices.

“That is an increase from 27% in the first quarter, and the highest percentage in the last five years, according to a report from CJ Patrick Co., using numbers from BatchData.”https://t.co/O8kNOsq6ma

— More Perfect Union (@MorePerfectUS) October 8, 2025

To end with a hint of optimism, at least we know what works, at least it’s clear what is causing the rise in homelessness—even if elected officials pretend otherwise. And we also know what works to get people back into housing—even if elected officials are killing these programs.

Housing First has proven effective. HUD and the US Department of Veterans Affairs were finding major success getting veterans into permanent housing with this approach.

And if the eviction to prison pipeline is shut down, real progress could be made in ending the national disgrace of hundreds of thousands of Americans sleeping on the streets. Unfortunately there is almost zero discussion of this by either of the two parties we’re gifted with in the “greatest democracy in the history of the world.”

To fill that void some Americans are just maybe starting to organize to do something about it themselves. We’ll look at those efforts next week.