Studies show helping the homeless helps taxpayers

Two recent studies suggest that housing services for the homeless have the possibility to save tax payers money on social services. A local study by the Heartland Alliance Mid-America Institute on Poverty focused on supportive housing for the homeless and especially the mentally ill while a new study in the Journal of the American Medical Association focuses on the benefit of housing homeless people who are alcoholics.

Both studies found that providing housing to these groups reduced the amount they used other social services and reduced the amount of public money they used. The Illinois study found that over two years $854,477 was saved in services to the 117 people put in supportive housing. The average saving was a little below $5,000 per person, or about $2,500 per person, per year.

From the Chicago Tribune article,

In the study, there were 10 people who had lived in nursing homes before they entered supportive housing. Their costs averaged $23,658 per person over two years. After supportive housing, only three people spent any time in nursing homes and stayed for shorter periods, at an average cost per person of $2,171.

The Tribune article describes supportive housing as a combination of affordable housing and case management. Residents had access to “help with money management, medication monitoring, finding jobs, transportation and a variety of other services.”

The study also said that the savings to taxpayers were probably underestimated.

The cost savings from supportive housing is likely to be much higher than reported here. A number of costs were infeasible to include or beyond the scope of this analysis, including the homeless system and related costs, substance use treatment costs, social costs, and many others. Also, cost savings likely  continued in the years following this study time frame.

The Seattle study found that in the year before the study, the 95 participants cost the city approximately $8.2 million in social services. One year into the program, the same group cost the city only $4 million. The Seattle study looked at a wider range of services used by the participants than the Illinois survey including substance abuse programs and shelters.

In the Seattle study, alcoholic homeless people were placed together in a apartment building and were still allowed to drink, but during the study their drinking decreased.

“Certainly, it is much easier (to change) when you are not cold, hungry and scared, and have a few meaningful events in your life,” said Mary Larimer, as quoted in the Seattle Post-Intelligencer. Lairmer is a professor of psychiatry and behavioral sciences at the University of Washington and was the lead author of the study.

The Seattle study was funded by the county at an initial cost of $2 million plus an additional $240,000 per year in operation costs, but the cost of the study still fell under the tax savings in government programs.

You can download the whole Illinois study at the Heartland Alliance website and the Seattle study can be found at the Journal of the American Medical Association website.

These studies both lend support to the argument of Housing First, which says that efforts should be to first place people into housing as opposed to a combination of shelters and transitional programs that end in an apartment.

NPR did a series of reports on the Housing First initiative including on a shelter for homeless alcoholics similar to the one featured in the Seattle study. The story estimated that housing each resident was $10,000 cheaper than the cost to the community would be if they were on the streets.

A 2007 study by the U.S Department of Housing and Urban Development found the Housing First approach to be “a viable response to address the housing needs of chronically homeless individuals with mental illness and often co-occurring substance-related disorders.” Though the study did have some criticisms of the policies of some Housing First providers. You can download the full study from HUD here.

What do you think of these studies? Do you think supportive housing and housing for alcoholics should be increased to decrease the burden on taxpayer-funded social services? Share your thoughts in the comments.

via Chicago Tribune and Seattle Post-Intelligencer