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saving public dollars

The Research: Is Supportive Housing Cost Effective?

Supportive housing stands as a beacon of hope for individuals facing persistent challenges such as serious mental illness, substance use disorders, or chronic medical problems. These vulnerable individuals often find themselves cycling through a revolving door of homeless shelters, emergency health care facilities, and public mental health services, incurring significant costs to taxpayers. At its core, supportive housing seeks to break this cycle by providing affordable homes and the essential services individuals need to regain stability. The result? Remarkable cost savings to our public systems. Let's delve into the numbers.


Supportive Housing Generates Significant Cost Savings to Public Systems

The Corporation for Supportive Housing (CSH)  complied a wealth of cost studies (see here)  conducted in six different states and cities demonstrating  supportive housing leads to a significant reduction in tenants' use of homeless shelters, hospitals, emergency rooms, jails, and prisons. The statistics are nothing short of impressive.

  • Health Care, Shelter, and Corrections Systems See the Biggest Cost Offsets

  • In terms of cost savings, health care systems come out on top. In New York, the reduction in psychiatric hospitalizations resulted in an annual savings of $8,260 per person. Denver and Los Angeles followed suit, with annual reductions in physical health hospitalizations saving $3,423 and $13,392 per person, respectively.

  • Shelter systems also experienced substantial savings due to reduced shelter use, with New York and Denver showing significant annual savings per person.

  • While the savings from reductions in jail and prison use were somewhat smaller, they were still significant. In New York, combined annual savings from jail and prison were $800 per person, $686 in Denver, and $1,320 in Los Angeles. These savings highlight the profound impact that supportive housing has on reducing the burden on correctional systems.

Supportive Housing Is No More (And Sometimes Even Less) Costly

Perhaps the most compelling aspect of supportive housing is that it saves substantial money for various public institutions while often requiring no more or, in some cases, even fewer resources in return for improved outcomes. Here,  in New York, the reduced service usage resulted in an annualized savings of $16,282 per unit, which amounts to 95% of the cost of providing supportive housing. In Portland, the annual savings per person totaled $24,876, while the annual cost of housing and services was only $9,870.


Emerging Evidence: Supportive Housing vs Housing Alone

A groundbreaking study conducted by the Economic Roundtable in Los Angeles compared cost savings generated from supportive housing to housing without services. For the general homeless population, temporary or permanent housing without services reduces public costs by 50%. However, for the chronically homeless, supportive housing reduces public costs by a staggering 79%, underscoring the value of adding services to communities in dire need.

The Bottom Line: Supportive Housing Is Cost Effective!

In our communities, we require solutions that effectively prevent and end homelessness, and supportive housing offers these much-needed outcomes at no more, and sometimes even less, expense to our public systems.

These findings emphasize the importance of investing in supportive housing as a cost-effective and compassionate solution to a longstanding issue, offering a path toward lasting stability and recovery for those who need it most.

the impact of supportive housing on surrounding neighborhoods

In November 2008 NYU's Furman Center released a policy brief summarizing their research on the impact of our model on local communities. “While studies have shown that supportive housing plays a critical role in helping to address the problem of homelessness, before our study, little was known about the impact that supportive housing has on the neighborhood,” said Vicki Been, Elihu Root Professor of Law and Professor of Public Policy and director of the Furman Center. Contrary to fears that supportive housing decreased property values, the research showed the impact was in fact the opposite. Supportive housing has proven to be good neighbors, finding that buildings nearest by experienced strong and steady growth. Read the ​full Furman Center brief and a related NYTimes editorial detailing how supportive housing is not only the most cost effective public policy on chronic homelessness but also an integral component to smart community planning.

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