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Explainer

A Market for Holding Humans: The Correctional and Detention Bed Trade

Excessive incarceration and immigration detention has resulted in a perverse system where people in custody are shuttled among facilities around the country for money.

Illustration of people in a detention facility
Nick Ogonosky
View the entire How Perverse Financial Incentives Warp the Criminal Justice System series

Economic incentives in the criminal justice system can create perverse outcomes that focus government actions on revenue generation instead of what’s best for society. Almost nowhere is this more apparent than the market for beds in local jails and other detention facilities, a thriving system where human beings are often commodified. 

For decades, sheriffs, corrections agencies, and for-profit firms have sought to alleviate prison and jail overcrowding by offering available beds to other jurisdictions in need of space. And the need is great. Despite the overall decline in imprisonment rates since 2009, many places still have too many people to safely house. The same goes for detentions by U.S. Immigration and Customs Enforcement.

This market can be a much-needed source of revenue for localities. In Louisiana, for example, ICE pays $74 per day — nearly three times what the state prison system reimburses local sheriffs. Midland County, Michigan, where the local budget depends on jail bed rentals, charges $45 per bed per day to other counties and $35 to the state.

What is the market for corrections and detention beds? 

The trade in custodial beds between jurisdictions emerged as a solution to the problem of high jail, prison, and immigrant detention populations. Overflow populations from local jails and state prisons are regularly traded in this complex market, providing additional revenue for local governments and for-profit firms. Louisiana and Kentucky stand out, sending more than 52 and 47 percent of their respective state-sentenced populations to local jails in 2019 and paying hefty fees to cover their room and board.

At one point, a website called JailBedSpace.com covered 48 states, serving more than 150 agencies. The company matched jail administrators with empty beds in facilities in other counties or states. Other so-called “bed brokers” have popped up over the years, all receiving fees for each bed they rent out.

The federal government increases the overall demand for bed space due to the recent growth in federal immigration detention, the dearth of ICE facilities, and the dependence of the U.S. Marshals Service on state and local governments and for-profit firms to hold the nearly 63,000 people in custody by the Marshals Service. This is because the Marshals Service does not own or operate its own detention facilities.

What makes this “market” so attractive to counties across the country?

Local governments and agencies sometimes view the market as a solution to their budget woes. Agencies not only monetize empty beds, but they sometimes build jails that are bigger than they need with the expectation of selling the extra space. A 2020 study indicates that immigration detention contracts are most sought after by counties experiencing worsening local labor market conditions, particularly in rural areas suffering fiscal distress.

One example is Bladen County, North Carolina, ranked the 17th most economically distressed out of the 100 counties in the state. In 2019, two years after building a new, expanded jail, it began holding individuals for the federal government, earning nearly $2 million in the first 18 months. At one point in 2021, federal detainees made up 66 percent of the jail’s population.

And in 2017, La Plata County, Colorado, committed to more than doubling the number of beds it rents to the state Department of Corrections, bringing annual profits from $369,000 to $553,000 as a “temporary patch to boost county income.”

Are all of these government contracts for detention beds fully transparent?

No. ICE and the Marshals Service — responsible between them for detaining more than 86,000 people on an average day — demand plentiful and accessible empty beds. To this end, they often rely on intergovernmental service agreements to procure detention services, which often need not follow the normal competitive procurement process or open-government requirements typical of other types of federal contracts. The reason behind this is purportedly to be able to quickly absorb potential surges in detention populations. ICE can acquire beds in two weeks to two months using intergovernmental service agreements instead of up to a year under normal federal contracting rules.

2021 report by the U.S. Government Accountability Office found that ICE uses these agreements specifically because there are fewer procedural hurdles involved, making it easier to acquire custodial bed space after only limited evaluation of a facility operator’s past performance. But with less oversight, concerns about limited staff, design deficiencies, insufficient medical care, and remote locations can be more easily overlooked.

How does the detention bed market cost taxpayers more?

Federal detention contracts are often inefficient and expensive, as illustrated by guaranteed minimum payment provisions that can result in ICE spending millions on empty beds. And because there is so little federal oversight, ICE is free to engage in creative contracting, using riders — new provisions that can be easily added to contracts — to stretch existing contracts to fit new facilities. In fact, counties don’t even need to incarcerate people themselves to reap this market’s benefits: they can serve as intermediaries between federal agencies and for-profit firms.

In just one example, the small town of Eloy, Arizona, received an annual fee of nearly $440,000 for serving as the intermediary between ICE and detention company CoreCivic when ICE wanted the corporation to establish and run a 2,400-bed immigration detention facility for families. It did not matter that the facility was constructed 900 miles away in Dilley, Texas, where Eloy could not possibly provide meaningful oversight.

ICE already had a 2006 agreement with Eloy for 1,500 adult immigration detainee beds at the CoreCivic-run Eloy Detention Center. Because existing intergovernmental service agreements can be modified with little oversight, ICE simply added a rider in 2014 to cover the new facility.

What is the human cost of this trade in incarcerated people?

The detained people bear the cost as they are shuttled across jurisdictional lines, hundreds or even thousands of miles from their families, friends, and communities. Additional miles and state lines present financial and practical barriers to retaining these important ties. One man incarcerated in Vermont who was moved in the middle of the night to Kentucky without warning said, “This practice of transferring inmates out-of-state is horrendous. You’re taking people who, whatever support network they may have, is gone. . . . you’re alone. You’re isolated.”

Further, the process stretches the lines of accountability and oversight even thinner than they are already. Staying with the last example, in 2018, a $40 million lawsuit was filed against Eloy for the death of a toddler in the Dilley facility. The Eloy City Council subsequently voted unanimously to end the intergovernmental agreement with CoreCivic, at ICE’s request. At the time, the city was “netting about $1.5 million in revenue from the contract.”

What can be done?

For starters, the federal government should institute more robust rules governing intergovernmental service agreements. Congress should pass legislation to ensure that contracts that involve the exercise of coercive force against individuals should never be exempt from the procedural rules that routinely apply to other federal actions. Reforms should eliminate the current unaccountable processes that obscure the real activity being negotiated — decisions not just about money or services but about how many people should be incarcerated, and where.

States can also constrain counties from entering into direct contracts with federal immigration or law enforcement authorities. Through legislation, states — including CaliforniaIllinoisNew Jersey, and Washington — effectively prohibit counties and local law enforcement agencies from entering into, renewing, or extending private immigration detention agreements.

While the overall lack of detention infrastructure to directly support federal agencies such as ICE and the Marshals Service means that some detention bed deficits are inevitable, it is possible to reduce custodial and detention populations to numbers that more closely align with available beds.

To further reduce the number of people who need to be housed behind bars, the federal government should let more people be released without bail pending their case resolution. It should also expand community-based case management alternatives. A 2014 congressional watchdog agency report found that 95 percent of people in “full-service” alternatives to detention programs, which include case management services to help people understand their rights and responsibilities, appear for their final hearings. There are community-based programs that offer full support, like Chicago’s Marie Joseph House, which costs as little as $17 per person per day and boasts a 100 percent compliance rate with court proceedings. These programs help people who would otherwise be incarcerated remain with their families and integrated into their communities through supports like food, shelter, and assistance finding health, legal, educational, language, and vocational services.

The growing trade in detention beds is neither inevitable nor irreversible. Policymakers can simply end contracts, as some have in recent years in response to the growing public outcry against harmful conditions of confinement. They can also consider whether new bed space is truly needed and contemplate steps to safely reduce custody populations. At the state and county level, jurisdictions can draw from a wide set of reforms implemented in recent years to temper excessive incarceration and immigration detention, particularly around the expanding use of diversion and noncustodial detention.