Huge savings from supportive housing for chronic homeless

Grits was interested to see a report out of California about a supportive housing program created for the 30 most expensive, chronic homeless people in San Diego, which reportedly has about 9,800 homeless folks citywide. What struck me is how a) a small number of homeless people account for a disproportionate share of cost to the taxpayers, and b) targeting services to a relatively small number of people resulted in significant savings. Reported the local NBC affiliate:

The initiative housed 30 homeless people in San Diego who were estimated to be costing taxpayers over $11 million in public resources, according to data from the project.

The participants on average absorbed nearly $318,000 before entering the program, estimated in emergency room visits, ambulance transports, in-patient medical stays, arrests and jail days. Those who enrolled were often disabled and continuously homeless for over a year.

After almost a year of being in the program, analysts estimated that the cost of supporting the average participant was about $97,400.

Overall, the project resulted in a nearly 70 percent reduction in costs to taxpayers, the analysts said.

Not every homeless person needs long-term supportive housing. Most homelessness is temporary and transitional, so for them, short-term supports are adequate. But for a small number of chronic homeless - particularly frequent flyers in local jails who may be arrested dozens of times on petty charges - the cost-benefit analysis of business as usual often reaches absurdist proportions.

The problem with such programs is that the costs of homelessness are spread out among many entities - the city, county, state, Medicaid, local hospitals, etc. - and not all those will pay into supportive housing. So the societal cost is tremendous but there is a free-rider problem among institutions that would see costs reduced. On paper, taxpayers overall benefit tremendously. But in practice, when one arm of government pays the freight, the savings are so spread out that that entity may not see a reduction in their own bottom line.

That's why I think it's smart to target a handful of the most expensive, chronic homeless folks for a pilot, identifying people for whom the economics of supportive housing come out positive even for the government entity ponying up the bucks. This is not a problem which may be resolved with a snap of a finger. I'd like to see more Texas cities and counties take on this topic in the same way San Diego did: Start small, demonstrate the concept, and build on success. (Fort Worth has begun to embrace supportive housing, but in Texas they're an outlier.) Often government does nothing on homelessness - or relegates the issue to law enforcement - because doing everything needed would be so expensive that policymakers become paralyzed. In that context, chipping away at the issue around the edges is preferable to throwing up one's hands and simply declaring nothing can be done, or worse, criminalizing homelessness instead of focusing on reducing it.