HUD Releases Groundbreaking Study on Costs of First-Time Homelessness

WASHINGTON – When an individual or a family becomes homeless for the first time, the cost of providing them housing and services can vary widely, from $581 a month for an individual’s stay in an emergency shelter in Des Moines, Iowa to as much as $3,530 for a family’s monthly stay in emergency shelter in Washington, D.C. The U.S. Department of Housing and Urban Development today released three studies on the cost of ‘first-time’ homelessness; life after transitional housing for homeless families; and strategies for improving access to mainstream benefits programs.

HUD’s cost study is the most comprehensive research on the price tag associated with first-time homelessness and creates a foundation to compare the costs of various homeless interventions. Taken together, HUD’s three studies released today will inform policy discussions on what are the most effective strategies for assisting homeless persons and families in the future.

"These studies expand our knowledge of the true costs of homelessness and raises other questions that go far beyond dollars and cents," said HUD Secretary Shaun Donovan. "Now we need to have a serious discussion over what strategies are not only most cost effective, but how we can help individuals and families from falling into homelessness in the first place."

HUD’s study, Costs Associated with First-Time Homelessness for Families and Individuals, examines how much it costs to house and serve nearly 9,000 individuals and families in six areas of the country. The report studies the cost of first-time homelessness among individuals in Des Moines, Iowa; Houston, Texas; and Jacksonville, Florida. In addition, the Department looked at the cost of first-time family homelessness in Washington, DC; Houston, Texas; Kalamazoo, Michigan; and a large area of upstate South Carolina.

HUD is currently investing $1.5 billion in funding through the Recovery Act’s Homeless Prevention and Rapid Re-Housing Program (HPRP), to prevent individuals and families from becoming homeless and help those who are experiencing homelessness to be quickly re-housed and stabilized.

This report reveals that most of those individuals and families studied experience homelessness only once or twice and use emergency shelter for a limited period of time at fairly low cost. However, HUD also found that some of these households experience longer periods of homelessness and use more expensive programs. While overnight emergency shelter for individuals have the lowest costs, these shelters offer the fewest services in the least private settings and are often open only during evening hours. By contrast, transitional housing is the most expensive model for individuals, frequently offering more privacy and a comprehensive range of on-site services.

HUD’s cost study found:

  • Average costs for individuals are much lower than for families, with overnight stays at an emergency shelter for individuals having the lowest daily costs;
  • For individuals, transitional housing proves more expensive than permanent supportive housing largely because services for transitional housing were usually offered directly by on-site staff than by mainstream service providers;
  • For families, emergency shelters are usually equally or more expensive than transitional and permanent supportive housing because family shelters often offer 24-hour access and private units;
  • In the three sample areas studied, first-time homeless individuals were predominantly male averaging between 39-41 years old; and
  • Female individuals had fewer stays, but used homeless programs 74 percent longer than their male counterparts.

HUD also released two additional homeless studies today:

Life after Transitional Housing for Homeless Families

This study follows 195 families in 36 transitional housing programs in five communities for three, six and 12 months after leaving the program. Given the significant investment HUD makes in transitional housing programs, and in light of the program’s costs mentioned above, it is important to understand the effectiveness of these programs. The five study communities were Cleveland/Cuyahoga County, Ohio; Detroit, Michigan; Houston and Harris and Benton Counties, Texas; San Diego City and County, California; and Seattle/King County, Washington. Among the study’s findings:

  • Participants in smaller transitional housing programs were more likely to have their own place to live after moveout and more likely to live with the same household members at the beginning and end of the follow-up year. Participants in larger programs experience higher levels of educational attainment at moveout.

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