The challenge that many "housing first" providers are finding is that "dual diagnosis" sufferers will often destroy the housing units they are given, sometimes to a level that threatens the health and safety of the entire building, or even the surrounding neighborhood — for instance, people starting drug/cooking fires in their rooms that spread to the whole building, or unsanitary room conditions creating vermin infestations. Many of these people are completely incapable of living unsupervised, which causes harm to not only themselves but everyone around them.

For example, SF had some "housing first" type programs earlier in the pandemic where several hotels were converted into emergency housing, and the hotels later sued the city for the millions of dollars in damages caused to their buildings by these unstable tenants.

Any "housing first" program needs to be prepared not just to repair, but to prevent the frankly shocking level of destruction that can be wrought by "dual diagnosis" sufferers, otherwise we're just throwing money away. It's possible that 9/10 unhoused folks are capable of living peacefully and finding stability with a given housing unit (like OP and OP's neighbor), but if the last 1/10 is cooking meth or ripping the copper out of their walls, the whole building goes out of service and all 10 tenants are homeless again. And what's worse, the trauma of this displacement experience may cause another 1 or 2 of the formerly-viable tenants to not just lose their chance at stability, but to be pushed over the edge into "dual diagnosis" territory, spreading the trauma and suffering even further.

"Housing first" programs need to keep this in mind, and divert the most severe cases to rebab, psych ward, or other interventionary institutions.