Council Approves $2 Million for Homelessness Study

Homeless Austinites line up outside One Texas Center seeking cold weather shelter in 2022 (Photo by John Anderson)

The city is paying $2 million for a study to look at every aspect of its work addressing homelessness – but not everyone is on board. The study will be executed by McKinsey & Company, one of the world’s largest, richest, and most recommended consulting firms.

The city said the McKinsey study, due in April, will evaluate the effectiveness of the strategies that the city of Austin, Travis County, Central Health, Integral Care, and UT’s Dell Medical School – together referred to as Healthier Austin Partners – are using to help those experiencing homelessness. According to City Council, the report will closely define the work that each organization carries out on the issue, including efforts to divert people from jail and shelters; to provide physical, behavioral, and mental health services; to provide wraparound services and case management; and more.

A city spokesperson told the Chronicle that the leaders of Healthier Austin Partners agreed during a meeting with Mayor Kirk Watson to authorize the study. “This review is necessary because a systems-level approach is necessary to help individuals exit homelessness,” the spokesperson said. “A systems-level approach involves a coordinated and integrated response involving various stakeholders to address homelessness comprehensively.”

Per the terms of the released agreement, the city expects to be reimbursed by Travis County, Central Health, and Integral Care for half the cost of the report, with the county and Central Health kicking in $400,000 each and Integral Care $200,000. But community members raised doubt about those expectations at last Thursday’s Council meeting.

“This week, the [Travis] County Commissioners Court politely declined the city’s offer to fund a portion of the proposed McKinsey study,” Equity Action’s Kathy Mitchell told Council members. “I would expect, as it continues to grapple with its own budget issues, that Integral Care may also so decline. Without the cooperation and support of our regional partners, it seems impossible that any of the objectives laid before you for this contract can actually be met.”

One public speaker at the Council meeting, John Ireland, criticized the study as a waste of money, calling McKinsey “the most expensive consulting firm in the world,” which we couldn’t confirm, though a 2020 ProPublica investigation described hiring McKinsey as “a famously expensive proposition, even when compared with its leading competitors.” Ireland pointed out that similar homelessness studies McKinsey completed for other cities are available for free, saying, “They’re all the same 30,000-foot views of what’s going on in the city, and they all make the same recommendations.”

The Austin Justice Coalition’s Chris Harris took issue with the study too, calling it a “do-nothing $2 million contract” that was the result of a “laughably corrupt procurement process,” in a Jan. 19 tweet. Meanwhile, the neighborhood association Friends of Hyde Park reacted to the McKinsey news and the hiring of former APD Chief Art Acevedo by tweeting, “The city of Austin has just become a giant slush fund for McKinsey and [interim City Manager Jesús] Garza’s friends.”

Watson, in his most recent “Watson Wire” newsletter, wrote that the city, county, and area health providers need to get on the same page. “We want to examine how we all collaborate and coordinate our efforts to provide comprehensive services to those living homeless,” the mayor said. “I believe this work will give us recommendations for improvements in strategy design and implementation to better align our work.”

Mitchell noted that she generally supports studies, like those from Kroll Associates on police misconduct. But she said the message that McKinsey will deliver is implicit in Council’s recommendations and criticized the use of synonyms and repetition in the documents supporting the study: “The term ‘align’ or ‘alignment’ appears five times in the objectives and scope. Add to that the terms ‘coordination,’ ‘collaboration,’ and ‘synergy’ and you pretty much understand the entire document.”