The Long Term Homelessness Problem
The cost to the state of establishing permanently homeless people in homes may be less than the cost of leaving them on the streets. Most recently, a pilot program in Los Angeles has reported tentative success.
Most people who are homeless are without a home for a relatively short time, but there is a small core of people who have become permanently homeless. A number of US cities have found that the cost to the state of establishing them in homes may be less than the cost of leaving them on the streets. Most recently, a pilot program in Los Angeles has reported tentative success.
Steve Lopez reports from Los Angeles on a pilot program to get homeless people off the streets:
If you pay taxes, Eddie Givens was costing you a fortune.
For the better part of 30 years, his life was a disaster. He was arrested dozens of times and cycled in and out of jails and hospitals, all of it on the public dime.
In his own words, Givens was a "blackout drunk" who passed out on the streets of downtown Los Angeles night after night. Each morning, he'd reach for the "vodka, scotch, whatever," and start all over again.
Project 50 is a pilot program, begun in 2007, that took Eddie and 48 other people like him, provided them with basic accommodation (own room, shared kitchen and bathroom) and a range of social, preventive medical and support services. A year after they were first housed, two have dropped out, four are in prison but the other 43 are still indoors.
Backers of the project estimate that net cost to date, not counting startup, has been $540,000 but that in the year before the program began, cost to the county for hospitalisation and imprisonment was $756,000. The figures are rubbery but the principle is clear: homeless people cost taxpayers money. The question is not whether to spend money on them or not. The question is how to spend it most effectively.
Los Angeles is not the first to realise this. In February 2006, Malcolm Gladwell wrote in The New Yorker about "million dollar Murray", a man who, in 30 years living on the streets of Reno, was estimated to have cost the state of Nevada a million dollars in incarceration and emergency medical services.
As Gladwell points out, most homeless people – perhaps eighty percent – are only briefly homeless and the long-term chronically homeless are maybe only ten percent of the total. They can be either helped or ignored and the cost of ignoring them may be more than that of helping.
Programs to get them off the street, such as the one that Gladwell describes in Denver, Colorado, involve substantially more than just supplying a place to live:
Five days a week, between eight-thirty and ten in the morning, the caseworkers meet and painstakingly review the status of everyone in the program. On the wall around the conference table are several large white boards, with lists of doctor's appointments and court dates and medication schedules. "We need a staffing ratio of one to ten to make it work," [Colorado Coalition for the Homeless director of substance treatment, Rachel] Post said. "You go out there and you find people and assess how 're doing in their residence. Sometimes we're in contact with someone every day. Ideally, we want to be in contact every couple of days. We've got about fifteen people we're really worried about now."
The cost of services comes to about ten thousand dollars per homeless client per year. An efficiency apartment in Denver averages $376 a month, or just over forty-five hundred a year, which means that you can house and care for a chronically homeless person for at most fifteen thousand dollars, or about a third of what he or she would cost on the street.
A similar program claims to have removed 87 percent of homeless people from New York's Times Square between 2005 and 2007.
The economics of these initiatives don't transfer directly to the Australian context. Health care in the US is typically more expensive. Even so, our governments tend to be cautious about increased funding for social services, without reckoning the cost of not providing the services. The answer is not to just throw money at welfare but to research and understand the problem before trying to solve it. The catch of course is that the cost of doing something is very visible. The cost of doing nothing is lost amongst myriad government and non-government agency accounts.
MikeM
February 28, 2009 at 6:18 am
Melbourne Common Ground project gets green light
Earlier this month approval was given to start construction of the Elizabeth Street Common Ground facility, which will provide 160 aparments for the disadvantaged, especially longterm homeless people. Funding has been provided by the Victorian government, Federal Government and from a number of other sources. The building will be constructed by Grocon, which has agreed to do so at cost and waive its normal profit margin.
The facility will be managed by Home Ground Services, an independent, not-for-profit, secular enterprise.
The project is modelled on the New York Common Ground initiative, which has successfully housed long-term homeless people who used to cluster around Times Square.
Key to success will be Home Ground's role in providing not just apartments but also the supporting services:
MikeM is surprised that the Victorian initiative is not more widely known.