Cost of Homelessness

Posted by Krystel Rae Davis on 2017-07-10

It is cheaper to give homeless people a home than to leave them on the streets.

What does this mean? Chronically homeless people often visit emergency rooms, use mental health and addiction treatment services, and are often arrested, leading to costly jail stays and use of court time. In a 2012 interview, the Secretary of the U.S. Department of Housing and Urban Development stated, “…it costs about $40,000 a year for a homeless person to be on the streets.” However, based on data compiled across 65 cities across the US, the cost to keep the homeless on the streets ranges from $35,000 and $150,000 per person per year (according to Philip Mangano, the former homelessness policy czar under President George W. Bush).

So, what can be done? Permanent supportive housing and Housing First initiatives have been proven to be the most successful approach to get people off the streets.

  • A 2014 study found that inpatient hospitalizations, emergency room fees and criminal justice costs for the homeless in Central Florida to be $31,065 per year. However, the same study found that permanent supportive housing for chronically homeless individuals costs just $10,051 per person per year.
  • In 2006, the state of Rhode Island estimated the cost per person in permanent supportive housing totaled $22,778 per year. This was $8,839 less than the annual cost of chronic homelessness ($31,617 per person)​.
  • A Denver study found that permanent supportive housing saved taxpayers $15,773 for every chronically homeless person housed. Over the course of the 24 month study, total emergency service­ related costs for the 19 individuals studied decreased by almost $600,000​.
  • A 2009 study in Seattle found that the average cost of services for chronically homeless individuals was $4,066 per person per month. When placed in permanent housing with supportive services, the total monthly cost savings of housing these individuals averaged $2,449 per person.