In industrialized societies some schools of psychotherapy and social welfare have reinforced the tendency of under-funded government agencies to deinstitutionalize the chronically mentally ill. Increasingly only those who were dangerous to themselves or others could be committed for treatment. Before commitment becomes possible, severely ill individuals have to deteriorate radically. Those incapable of caring for their most minimal needs are adjudged no danger to themselves as long as their families care for them. This gives families the choice of serving as an institution or putting their ill member on the street in the hope that he would then become eligible for treatment. Often there have been major financial incentives for hospitals to discharge such patients. Community centres have proved inadequate to the task of caring for such people. They have tended to gravitate to nursing homes and boarding houses, single-room-occupancy hotels, and increasingly to jails, shelters and streets.
The policy of deinstitutionalizing the mentally ill was originally a reaction against the acknowledged inadequacy of many under-funded and neglected state hospitals for the mentally ill. It became politically incorrect to say that the mentally ill were any more insane than the so-called sane members of the population. It was argued that it was against all principles of civil liberties to incarcerate the ill. There were also strong economic arguments for closing state institutions: it was claimed that the market and private philanthropy would find more cost efficient ways of caring for the mentally ill. The reality was that most patients were released into poor communities already lacking social structures and services, and especially lacking funds to provide them.
London has an estimated thousand-plus homeless people with mental disorders. Most drift between the streets and emergency "direct access" hostels for the homeless. In the USA, the de-institutionalization of the mentally ill and breakdown of public psychiatric services has been the cause of much homelessness. One hospital in Boston found that 27% of all discharged patients became at least intermittently homeless within six months of discharge; a hospital in Ohio reported 36%.