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Being Homeless is Expensive

Want to save money — lots of money — on homeless people? Give them free housing!

The United Way of Los Angeles studied four people who had been living on the streets, then they put them into free apartments and got them access to free support services. Interestingly, it cost the government less money than it did when they were homeless. How could that be?

Living on the street can be rough. If you get sick, you go to the emergency room. During the time they were on the streets, the four people together used the emergency room 19 times. There were also the costs of shelters, which require people to run them. In addition, homeless people tend to get arrested, and the cost for police and jails is substantial.

In total, when the four were living on the streets, it cost the government $187,288. Afterwards, the same four people, including their free housing costs and all the free services, cost the government $107,032. The biggest savings was in medical costs, which went from $26,060 to $830, and in criminal justice costs, which went from $23,361 to zero.

That’s a savings of over $20,000 per person! Los Angeles is estimated to have 100,000 homeless people, so that could mean a savings of $2 billion in just one city.

Of course, our government is cutting services for the poor, and the mortage crisis is increasing the number of homeless people. We’re spending increasing amounts on medical costs and jails. No wonder our governments (especially state governments) are going broke. And the Republicans are calling for even more cuts to services for the poor, which will likely make the situation even worse.

Unintended consequences can be a bitch.



  1. Arthanyel wrote:

    Love it. A great example of how creative thinking and a focus on the practical results can lead to dramatically improved solutions.

    And FYI for any conservative readers, if you wonder why medical costs rise faster than inflation, and your company’s medical premiums keep going up, this is one of the key reasons. Someone has to pay for all that emergency room care (at 2X to 7X on average vs. going to a regular doctor) and that someone is us.

    Saturday, July 9, 2011 at 7:21 pm | Permalink
  2. ebdoug wrote:

    Arthanyel: Exactly. You have it right on about health care costs. Running to the doctor all the time.

    If a cat shows up here, I say “OK, another responsibility for me.” There are people who just can’t take care of themselves. What is wrong with us giving them a room from the elements somewhere? Must be empty motels, empty school, etc. When Reagan cut back funding to mental institutes, those institutionalized people were just turned loose. And they walk the streets.
    When my mother entered a nursing home, I was very impressed with how fast she became institutionalized.

    Sunday, July 10, 2011 at 5:31 am | Permalink
  3. BTN wrote:

    People on the streets can generally be put into two categories: (1) useless or (2) unlucky. How many of us have seen a “veteran” begging for money, but not given because we don’t know if (1) they really are a veteran or (2) whether they’ll spend it on booze or drugs. On the other hand, I know that some people were just out there because they lost their job and can’t find another one in this economic “recovery.”

    I am in favor of sorting out the rif-raf from potentially productive members of society and throwing them a bone, even a big one such as free housing – provided they take of the house and contribute to society in some kind of way, even if that means picking up the trash, reading to illiterates, or other tasks normally done by volunteers.

    Sunday, July 10, 2011 at 11:27 pm | Permalink
  4. starluna wrote:

    There have been experiments here in MA around “housing first.” So far, the results have been that a statistically significant proportion of people who obtain stable housing are more likely to be successful in obtaining employment, addressing substance abuse problems, addressing mental health issues (separate from drug abuse), and generally getting their act together.

    Monday, July 11, 2011 at 7:02 am | Permalink