The United States has a homelessness problem, but we have an even bigger homelessness-policy problem. It is an issue at the federal level—HUD spends nearly $10 billion annually to create bad incentives that reward destitution—and at the state and local level. This week, two widely divergent state approaches to homelessness were on display. In Oregon, state legislators sought to grant the homeless a right to camp on public property and to sue for up to $1,000 if their tents are disturbed. This may strike some as an extreme example, but it’s unfortunately typical for homeless policy, which is largely controlled...