In this article, I describe efforts to manage the capacity of homeless shelter programs in Philadelphia and assess the impact of those efforts on providers and consumers of homeless services. Most reforms have focused on reducing the capacity of the shelter system by reducing the average length of stay of persons in shelter and by providing housing relocation assistance. However, these reforms have been compromised by an inability to contol the demand for shelter, particularly the rate of new admissions , and by the extent of need for housing assistance among homeless and near-homeless people in Philadelphia. Alternative methods of financing shelters are described, as are attempts to create a system of specialty shelter providers. The contradictions of shelter reform and the need for a more comprehensive homelessness prevention strategy are discussed.