Putting the homeless in supportive housing, where they not only get a safe place to sleep but services that help them deal with any health or other issues, costs a lot up front. But San Francisco has found that once those in housing eventually get stabilized, it ends up costing less than it did to have them living on the streets or in shelters.
The city began taking a “housing first” approach to homelessness in 2004, aiming to get the homeless into housing before trying to tackle any other issues. As part of that, it sought to get people into supportive housing units that are coupled with supports and services.
In a new report analyzing the effort, it’s clear that the initial cost of housing this population and addressing their medical, mental, and other challenges is high. The service and housing costs for 1,818 homeless people jumped to $61.7 million in the fiscal year spanning 2010 and 2011, when they entered supportive housing, from $19.4 million in the 2007–2008 period, before they had gotten into the program.
But that price tag dropped to $36.4 million by fiscal year 2014–2015. What’s more, that last figure is 9 percent less than what the city spent in 2009–2010 on homeless services alone, the last year before the city spent money on the supportive housing program. That means it ended up paying less on supportive housing and services once the homeless were fully transitioned into the program than it did before they were in housing, with the costs dropping every year they spent housed.
The nature of city spending changed as well. Costs shifted from putting the homeless in jail and giving them services to taking care of their medical needs. The city didn’t spend anything on primary medical care for this population in 2007–2008, while incarceration costs ate up 15 percent of all spending on these homeless people.
The biggest spikes in expenditures between then and 2010–2011 were in emergency and primary medical care, which went up 199 percent, as well as a 365 percent increase in homeless services and an 85 percent increase in behavioral health costs. The report attributes that to the fact that entry into supportive housing is usually precipitated by a crisis in a homeless person’s life, either medical or related to being jailed. So as they enter the program, many are in “rapidly deteriorating conditions,” necessitating a big upfront investment in emergency room or primary care.
But everything began to drop after that, falling an overall 56 percent between 2010–2011 and 2014–2015. That was helped along by a 64 percent decrease in how much the city was spending on jailing the homeless, as well as an 89 percent drop in services, a 58 percent drop in medical care, and 43 percent reduction in behavioral health care.
And even though costs rose, more people were served and housed than in 2007–2008. “Most of the 1,818 adults who entered supportive housing…benefitted from being housed,” the report notes. “The City also benefitted from reductions in costs between the time when adults began to enter supportive housing…and FY 2014–2015.” The costs also appear to be mainly driven by a small group of people, going to “a few individuals having very high costs for inpatient stays,” the report says. About 160 people, or 9 percent of the total, consumed 42 percent of all spending on services. Yet this group saw even greater drops in spending after they were in supportive housing. The city spent $5.8 million on their supportive housing costs between 2010–2011, when they entered, and 2014–2015, compared to a savings of $21.3 million in services over that time period. “The reductions in service costs for these adults after housing placement more tan offset the costs of supportive housing,” the report notes.
The report also notes that costs are higher in the cohort that entered supportive housing during these years because they are more likely to be older. The average age of the people who entered supportive housing was 52 for Department of Public Health programs and 47 for Human Services Agency programs. People over age 50 made up 45 percent of those places in supportive housing, compared to 29 percent of the overall homeless population. The costs will continue to climb across the country as the homeless population ages and needs more medical care.
San Francisco’s experience mirrors that of other places that have discovered it costs less to house the homeless than it does to address their plight with emergency medical care and jail. Colorado spends millions enforcing its numerous anti-homelessness ordinances, money that would bring huge savings if spent on housing the homeless instead. Florida was found to spend an average of $31,065 for each chronically homeless person it left on the streets, versus a cost of just $10,051 to bring them inside. One supportive housing complex in North Carolina was found to save $1.8 million in health care and incarceration costs.