This article reviews some of the proposed causes of homelessness in America including deinstitutionalization policies, falling wages, cuts in welfare benefits and a shrinking supply of affordable housing. According to the author, most of the nation's homeless fall into one of three distinct groups with vastly different service needs. These groups include persons with mental illnesses, poor families, and single men, many with substance abuse problems and criminal histories. The author also reviews the Stewart B. McKinney Homeless Assistance Act of 1987. The author contends that too great a portion of the federal funds designated for homeless assistance are appropriated for the provision of emergency shelters rather than for permanent housing.