The cost of homelessness and the net benefit of homelessness programs: a national study

Kaylene Zaretzky, Paul Flatau

Research output: Book/ReportBookpeer-review


Objectives and method: Specialist Homelessness Services (SHS) aim to assist people who are homeless, or at risk of homelessness, to access and maintain stable and secure accommodation. Integral in achieving these outcomes, they aim also to assist clients to become self-reliant and independent, improve health and well-being outcomes and to re-establish positive social connections and employment participation. Indicators of the extent to which these objectives are achieved include housing status, income and workforce status. Since commencement of the National Affordable Housing Agreement and the National Partnership Agreement on Homelessness increased emphasis has been placed on establishing the extent to which these objectives are met. This study examines this issue; and the cost and associated benefits to government of providing these services. It reports on outcomes for clients of specified homelessness prevention and assistance programs who accessed support between October 2010 and May 2011. Programs examined in the study operate in inner city and metropolitan and major regional centres in New South Wales (NSW), Victoria (Vic), South Australia (SA) and Western Australia (WA) over the period 2010 to 2012. They include: Supported accommodation programs for single men ('single men'). Supported accommodation programs for single women, including women escaping domestic/family violence ('single women'). Tenancy support programs for persons at risk of losing an existing tenancy. Street-to-home programs. Section 2.2 provides an explanation of the above programs and supports. This study examines both the benefits that accrue to the individual from improved outcomes, and the benefits that accrue to government when a period of homelessness support results in reduced use of non-homelessness services (e.g. health, justice and welfare services) and therefore budgetary savings. The findings are presented in this current report and in the AHURI Baseline Report (Zaretzky et al. 2013), which reports on the findings of the Baseline Survey as the first wave of the Client Survey. Method Two surveys were conducted: a longitudinal Client Survey, comprising a Baseline and Follow-up survey of clients of homelessness services; and an Agency Survey of agencies and associated services delivering homelessness programs whose clients participated in the Baseline Survey. Information around client circumstances and outcomes prior to and post a period of homelessness support was collected via the longitudinal Client Survey (n=204). The Baseline Survey was administered with clients soon after commencement of their support period. It focused on respondents' circumstances in the 12 months prior to commencement of their current period of homelessness support and was administered, in the main, by a staff member of the relevant service (frequently their case worker). The Follow-up Survey was conducted with respondents to the Baseline Survey 12 months after their completion of that survey, and had a follow-up rate of 30 per cent (n=61). The Baseline Survey sample for supported accommodation and tenancy support programs was sufficiently large to be representative of persons accessing these service types. The street-to-home sample, however, was very small and the results are provided for completeness of information only. The Agency Survey provided for a bottom-up estimate of the costs of the specialist homelessness services accessed by their clients at the time the Baseline Survey was administered. Information in the public domain and unpublished government data were used to provide top-down cost estimates of homelessness services and programs, and associated non-homelessness service use, for participating agencies and services across the four states and in Australia. For the most part, the characteristics of Baseline Survey respondents who also participated in the Follow-up Survey were not materially different to those who did not participate in that survey. However, when interpreting the results, emphasis should be placed on the direction and relative magnitude of findings, rather than on the numbers themselves. Additionally, issues with contacting respondents for the Follow-up Survey potentially create bias. For example, respondents with a more secure housing situation will be more easily located for a follow-up survey than respondents who are transient or sleeping 'rough'. Issues examined Baseline Survey results were examined in the first report associated with this study, referred to as the AHURI Baseline Report (Zaretzky et al. 2013). This report showed clients of specialist homelessness services to be heavy users of non-homelessness services such as health, justice and welfare services compared with the Australian population on average, with respondents whose housing careers included a period of public housing in the past year (other then tenancy support clients) having a high probability of experiencing an eviction event. This study contends that if the use of these non-homelessness services could be reduced to average Australian population levels, this could result in large savings to government (estimated at $29 450 per client/year at 2010-11 levels) and provide an offset to the cost of homelessness support. While the characteristics of clients of homelessness services, such as high prevalence of mental health issues and low educational attainment, suggest that it is unlikely that these potential 'population' offsets would be realised in full, we suggest that if even a small proportion of these offsets could be realised on an ongoing basis, homelessness programs could potentially be cost neutral. This report, referred to as the Final Report, interrogates these issues further. Baseline and Follow-up survey results are compared to examine outcomes of a period of homelessness support including the extent to which savings in non-homelessness costs are realised in the short to medium term and the net cost of homelessness support. This report thus examines: Changes in client outcomes associated with SHS. The average change in client use of non-homelessness services that can be linked to the period of homelessness support (a decrease in non-homelessness service costs is referred to as a 'cost offset'). The distribution of health and justice costs incurred by clients of homelessness programs and the change in these costs (this provides important new information on service use for the 'typical' client and for heavy users, compared with the average). The cost to government of specialist homelessness services, including recurrent and non-recurrent expenditure. The whole of government (net) cost of specialist homelessness services, defined as the cost of the specialist homelessness services plus the change in cost to government of non-homelessness services. The non-homelessness services examined in this report are health and justice, welfare payments and the cost of eviction from public housing. The incidence of children being placed in care due to unstable accommodation is examined in the Baseline Report, but is not examined further. We believe a dedicated family homelessness study is required to examine the costs associated with out-of-home care.
Original languageEnglish
Place of PublicationMelbourne, Australia
PublisherAustralian Housing and Urban Research Institute
ISBN (Print)9781922075475
Publication statusPublished - 2013


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