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HUD Releases Homelessness Cost Studies

Three Studies Document Cost Savings

The Department of Housing and Urban Development released three studies on Thursday March 25, 2010 – on the cost of ‘first-time’ homelessness; life after transitional housing for homeless families; and strategies for improving access to mainstream benefits programs.

HUD’s cost study – Costs Associated with First-Time Homelessness for Families and Individuals - is “the most comprehensive research on the price tag associated with first-time homelessness and creates a foundation to compare the costs of various homeless interventions.”

Taken together, HUD’s three studies released today should inform policy discussions on what are the most effective strategies for assisting homeless persons and families in the future.

According to Dennis Culhane, a University of Pennsylvania, many communities probably don’t know that they are spending as much “to maintain a cot in a gymnasium with 100 other cots” as it would cost to rent an efficiency apartment. “We are paying for a form of housing that is largely substandard, and we are paying as much, if not more, than standard conventional housing.”

“These studies expand our knowledge of the true costs of homelessness and raises other questions that go far beyond dollars and cents,” said HUD Secretary Shaun Donovan. “Now we need to have a serious discussion over what strategies are not only most cost effective, but how we can help individuals and families from falling into homelessness in the first place.”

According to HUD, this report reveals that most of those individuals and families studied experience homelessness only once or twice and use emergency shelter for a limited period of time at fairly low cost. However, HUD also found that some of these households experience longer periods of homelessness and use more expensive programs. While overnight emergency shelter for individuals have the lowest costs, these shelters offer the fewest services in the least private settings and are often open only during evening hours. By contrast, transitional housing is the most expensive model for individuals, frequently offering more privacy and a comprehensive range of on-site services.

HUD’s cost study found:

  1. Average costs for individuals are much lower than for families, with overnight stays at an emergency shelter for individuals having the lowest daily costs;
  2. For individuals, transitional housing proves more expensive than permanent supportive housing largely because services for transitional housing were usually offered directly by on-site staff than by mainstream service providers;
  3. For families, emergency shelters are usually equally or more expensive than transitional and permanent supportive housing because family shelters often offer 24-hour access and private units;
  4. In the three sample areas studied, first-time homeless individuals were predominantly male averaging between 39-41 years old; and
  5. Female individuals had fewer stays, but used homeless programs 74 percent longer than their male counterparts.

Average Monthly Cost by Homeless Program Type

Individual Sites

Emergency Shelter

Transitional Housing

Permanent Supportive Housing

Des Moines

$581

$1,386

$537

Jacksonville

$799

$870

$882

Houston

$968

$1,654

$966

Family Sites


Houston

$1,391

$3,340

$799

Kalamazoo

$1,614

$813

$881

Upstate S.C.

$2,269

$1,209

$661

Washington

$3,530

$2,170

$1,251


The Life after Transitional Housing for Homeless Families study followed 195 families in 36 transitional housing programs in five communities for three, six and 12 months after leaving the program. The five study communities were Cleveland/Cuyahoga County, Ohio; Detroit, Michigan; Houston and Harris and Benton Counties, Texas; San Diego City and County, California; and Seattle/King County, Washington.

Among the study’s findings:

  1. Participants in smaller transitional housing programs were more likely to have their own place to live after moveout and more likely to live with the same household members at the beginning and end of the follow-up year. Participants in larger programs experience higher levels of educational attainment at moveout.
  2. In some respects, longer stays in transitional housing produced important benefits including higher levels of educational attainment and employment and a greater likelihood of continued employment during the follow-up year. Families spending more months in transitional housing were significantly more likely to have a place of their own for an entire year after leaving the program.
  3.  While transitional housing programs produced increasingly positive outcomes for families with longer stays, HUD found the number of barriers facing families did not impact outcomes. Given the significant costs associated with service-intensive transitional housing programs, HUD’s report brings into question whether this housing model is the most appropriate intervention for those families who do not have significant barriers to housing.

The Strategies for Improving Homeless People’s Access to Mainstream Benefits and Services studied seven communities (Albany/Albany Co., NY; Albuquerque, NM; Metropolitan Denver; Miami-Dade Co., FL; Norfolk, VA; Portland, ME; and Pittsburgh/Allegheny Co., PA) to document how communities mobilized to improve homeless people’s access to mainstream benefits and services in light of HUD’s goal of dedicating a larger portion of HUD homeless assistance funding to housing.

Communities that experienced the greatest success had a strong central organization intent upon improving access of homeless individuals and families to mainstream service. Typically, communities were successful at reducing structural barriers to benefits, such as physical access, complexity and length of application processes, and rules for documenting eligibility. In addition, the study finds evidence that people exiting HUD-funded programs were likely to be connected to mainstream benefits at rates that exceeded national rates for 2007. These communities had the most success enrolling persons and families for food stamps and General Assistance. However, communities struggled with overcoming barriers that were beyond their control, such as eligibility requirements of programs, such as TANF and Medicaid, and capacity barriers, such as an insufficient number of slots available in mainstream treatment programs for substance abuse or mental health services.

by Richard W. Brown

Richard W. Brown, has more than forty-two years experience in both housing development and community organizing. Since 1991 Mr. Brown has been the Chief Executive Officer of Monarch Housing Associates, the 1995 Governor’s Excellence in Housing Award winner in the organization category.. To read more about Richard and all of our staff click here. Click here to send Mr. Brown an email.

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