Homelessness is a major issue in American cities. We receive many subrogation inquiries about whether public entities can be pursued when an incident begins in a homeless encampment on government property and then causes damage to an insured’s property.
Before 2024, municipalities’ hands were tied by the Ninth Circuit’s holding in Martin v. City of Boise, 920 F.3d 584 (9th Cir. 2018). The court held that it was cruel and unusual punishment for a city to enforce anti-camping ordinances if it did not have enough public housing beds to accommodate its homeless population. The Ninth Circuit interpreted such enforcement as the criminalization of homelessness. This made it difficult for governmental entities to regulate homelessness in public spaces, which in turn gave them strong defenses against subrogation claims related to losses arising from homeless encampments on government property.
In 2024, in the case of Grants Pass v. Johnson (603 U.S. 520), the U.S. Supreme Court overturned Martin and held that the Eighth Amendment does not prevent cities from enforcing generally applicable laws against camping or sleeping in public spaces—even if individuals lack shelter. This ruling gave governmental entities additional tools to prevent camping and sleeping in public spaces. After Grants Pass, governmental entities can no longer argue that their hands are tied by the Eighth Amendment.
There are already examples of voters responding with measures that hold cities accountable for failing to regulate homelessness in public spaces. For instance, Arizona voters passed Proposition 312 in November 2024. Proposition 312 allows a property owner to apply once per year for reimbursement of documented, reasonable expenses incurred in mitigating the effects of a city, town, or county policy (or practice) that fails to enforce existing laws prohibiting illegal camping, obstructing a public thoroughfare, loitering, panhandling, public urination or defecation, public consumption of alcohol, illegal drug possession or use, or the maintenance of other public nuisances.
It will be interesting to see whether the Supreme Court’s ruling—together with ballot measures like Arizona’s Proposition 312—opens the door for subrogation recovery arising from property damage caused by incidents in unregulated homeless encampments on government property.