Proven Reforms Help Beat Homelessness Even in Tough Times

Jan. 2 (Bloomberg) -- Remarkable developments are embedded within an otherwise humdrum announcement last month by the Department of Housing and Urban Development, which said that the number of homeless people in the U.S. declined slightly in 2012, according to a count on a single night last January.

The slight dip, a drop of 0.4 percent to 633,782, continues a trend of improvement now lasting five years. In that time, the U.S. has reduced homelessness by 5.7 percent even as the poverty rate grew by 20 percent.

The decline shows that the country has learned something about how to address homelessness. The solution, it seems, lies not in publicly sheltering the homeless for sustained periods but in ensuring that they quickly secure their own places to live.

This approach was first applied to the chronically homeless, who made up 16 percent of all cases in 2012. These individuals almost always have disabilities such as mental or physical health problems or addictions. As a result, they fare poorly in conventional homeless programs, which may require compliance with the rules of an emergency shelter -- such as sobriety -- before allowing them entrance to a transitional shelter. Further compliance, including treatment for substance abuse, for instance, may be required before they can qualify for permanent housing support.

The alternative strategy places the chronically homeless directly into permanent housing while also connecting them to services to address their other challenges. Most will need this support, at government expense, for life. Yet such comprehensive assistance is probably cheaper than leaving the chronically homeless on the streets, because they often end up in hospitals, detox centers or jails, all on the taxpayer’s dime. Those services cost the public $2,897 per individual per month, according to one study in Los Angeles County, versus $605 for supportive housing.

In localities with less generous public services, the differential is generally smaller. Still, it’s clear that the strategy works. Having increased the number of permanent supportive housing units by 86,000, or 46 percent, since 2007, the U.S. has reduced chronic homelessness over that period by 19.3 percent.

New approaches are also being applied to the situationally homeless -- families and individuals who’ve slipped into homelessness because of misfortune such as a job loss, personal turmoil or a costly illness. Traditionally, they have gone from an emergency shelter to a transitional one, where they might spend months working to save the money for moving expenses, a deposit and the first-month’s rent on an apartment. Under a new program, authorities instead grant that money upfront, getting the household out of shelter quickly or sometimes even preventing a lapse into homelessness.

Once assisted, people tended to stay housed. Numerous studies showed that only about 3 percent of households served were homeless again within 12 months. Plus, costs per household were much less. A report on efforts in seven states concluded that rapidly rehousing a family costs $5,775 on average, compared with $18,776 for an average stay in transitional housing. Officials expected the national program would serve 750,000 individuals; it served 1.3 million.

HUD devoted $1.5 billion in stimulus money over three years to the program. (The agency annually spends about $2 billion on homelessness assistance.) Trouble is, the stimulus money ran out in September. A new HUD program is expected to spend about $126 million a year on rapid rehousing and prevention. A similar program for veterans and their families is adding $200 million to its budget. That leaves overall spending at about 65 percent of the previous level.

Just as it’s clear that rapid rehousing works well for the situationally homeless, it’s also clear that long stays in expensive transitional shelters do not. Accordingly, HUD should allocate more to rapid rehousing and less to shelters. Local governments, which have considerable leeway over housing spending, needn’t wait for the department to reallocate; they can redirect general HUD funds they receive.

Experience over the past five years demonstrates that homelessness is not an insurmountable challenge. With the right measures, significant progress is possible.

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