A working paper from a PhD candidate at the UCLA Department of Economics, “Housing the Homeless: The Effect of Housing Assistance on Recidivism to Homelessness, Economic, and Social Outcomes,” finds that housing assistance for homeless individuals reduces the likelihood that they will become homeless again, reduces crime, increases employment, and improves health. A cost-benefit analysis shows that up to 80% of the costs of housing assistance are offset by these potential benefits within the first 18 months.
The author uses three sources to construct a dataset of homeless services provided and economic and social outcomes for individuals experiencing homelessness: 1) administrative records for individual intakes by homeless service providers throughout Los Angeles County from 2016 to 2018; 2) Homeless Management Information System (HMIS) data on all homeless services provided in the Los Angeles Continuum of Care between January 2010 and June 2019; and 3) data from the Enterprises Linkage Project (ELP) on service utilization patterns of people participating in social welfare programs. The ELP data includes records from the Departments of Health Services, Mental Health, Public Health, Public and Social Services, and the Probation and Sheriff Departments. The combination of records allows the author to analyze how many individuals experiencing homelessness received housing assistance and whether those receiving assistance subsequently needed fewer services or had different rates of involvement with the criminal justice system in the 18 months following their intake to the homeless support system. In this study, housing assistance includes emergency shelter, transitional housing, rapid rehousing, permanent supportive housing, and other permanent housing programs. The study uses a quasi-experimental research design to compare outcomes for individuals who received housing assistance with those who did not.
The author restricted analysis to 39,119 cases handled by case workers between 2016 and 2017, where the individuals were between the ages of 25 and 65 and not veterans. Among these cases, approximately 65% received some form of assistance and about 50% received housing assistance. Among those that received housing assistance, 60% received temporary assistance and 40% received some type of permanent housing assistance. The median duration of housing assistance in the sample was 100 days.
The analysis found that housing assistance significantly discourages future returns to the homeless support system. After 18 months, individuals who receive assistance have more than a 20 percentage point reduction in recidivism. Individuals with substantial disabilities or who have been homeless for a long time, who are generally more likely to be prioritized for housing assistance, see a larger reduction in their probability of returning to the homeless support system when they receive assistance. Individuals who receive permanent housing assistance are 31 percentage points less likely to return to the homeless support system within 18 months compared to those who received no housing assistance, while individuals who received temporary housing assistance are only 2.3 percentage points less likely to return to the homeless support system within 18 months.
Housing assistance had several other positive social and economic effects. Individuals receiving assistance were 5.4 percentage points less likely to visit the emergency department in the subsequent 18 months. Housing assistance reduces the probability of receiving mental health services by 4.6 percentage points, and recipients spent 3 fewer days in inpatient care. Individuals who received housing assistance were 7.9 percentage points less likely to be charged with at least one crime, and they were charged with 0.4 fewer crimes during the 18-month period. Using self-reported employment and income data, the author finds a 26 percentage point increase in the probability of reporting non-zero income and a 24 percentage point increase in the probability of reporting employment.
The author provides a cost-benefit analysis of housing assistance. The average cost of temporary housing assistance is $5,095 and the average cost of permanent housing assistance is $12,402. The benefits include reductions in spending for the homeless support system, the public health system, and criminal justice, as well as increases in taxes from increased employment. Overall, the paper finds a substantial portion of housing assistance costs are offset by savings to public agencies in the first 18 months following an intake. The savings are larger in permanent housing programs. This cost-benefit analysis does not consider the acquisition and construction costs for place-based housing assistance programs.
The paper can be found at: https://bit.ly/35gQ2mX