The cost of homelessness and the net benefit of homelessness programs: a national study. Findings from the Baseline Client Survey: A national study

Kaylene Zaretzky, Paul Flatau, Anne Clear, Elizabeth Conroy, Lucy Burns, Bridget Spicer

Research output: Book/ReportBookpeer-review


Aims and objectives: Homelessness occurs when an individual does not have access to safe, adequate or secure shelter. Homelessness can lead to much higher use of mainstream public support services, such as health and justice services, than is evident in the general population (Flatau et al. 2008; Zaretzky et al. 2008). At the same time, services supporting homeless people may assist them to achieve positive change in their life and so reduce the use of these services and their reliance on welfare services. Increased housing stability can also result in decreased costs for providers of public housing through a decrease in the number of evictions. Given the costs of homelessness, the provision of homelessness services may result in 'whole-of-government' budgetary savings as a result of improved client outcomes. With the Australian Government's White Paper on Homelessness, The Road Home (2008) and the commencement of the National Affordable Housing Agreement (NAHA) and the National Partnership Agreement on Homelessness (NPAH), there has been increased emphasis on examining the outcomes of homelessness support programs and whether these programs are cost-effective.This study addresses this research priority, examining:→ The extent to which outcomes for clients of specialist homelessness programs is changed by receiving support. Data to examine outcome changes is gathered via a longitudinal survey of clients of specialist homelessness services, administered when a period of support commences and again after 12 months. → The costs of non-homelessness services used by persons at risk of homelessness. This is estimated across the health, justice and income support domains, as well as an estimate of the cost of children being placed in care due to unstable accommodation circumstances, and the cost of public tenancy evictions for persons who are subsequently homeless. → The cost of providing specialist homelessness programs. This is examined both through a survey of agencies delivering specialist homelessness services and from government administrative data. The potential savings in non-homelessness services are netted off against the cost of providing homelessness support to determine the net cost to government of providing homelessness assistance. → Investigating the potential to use linked administrative homelessness, health, justice, income and welfare support data to quantify the costs of homelessness and the costs and benefits of homelessness program assistance. Scope of the study: The study extends a Western Australia study by Flatau et al. (2008), Flatau and Zaretzky (2008) and Zaretzky and Flatau (2008), extending the range of programs examined to incorporate initiatives introduced with the NPAH, and to include programs operating in New South Wales, Victoria and South Australia, as well as Western Australia. These four states represent approximately 75 per cent of the total population (ABS 2010a) and approximately 66 per cent of the homeless population (Chamberlain & Mackenzie 2009). Intervention points examined are: → Supported accommodation for single men and single women, including those escaping domestic violence. → Street-to-home programs providing long-term supported accommodation to those leaving primary homelessness with mental health and/or drug and alcohol needs. → Tenancy support programs; early intervention programs assisting persons who already have a public or private tenancy to maintain that tenancy. This is the first of two Final Reports from the present AHURI Cost of Homelessness study. It outlines the methodological framework for the study, describes the homelessness support environment and reports on the Baseline Client Survey, including a preliminary analysis of the cost-effectiveness of the programs examined and the extent to which it is possible to identify quasi-experimental comparison groups for the target treatment groups. The second Final Report will examine the findings of the 12-Month Client Follow-up and Agency Surveys and will further examine program cost-effectiveness. It will also discuss the extent to which current administrative data sets can be utilised to examine the relation between homelessness and utilisation of non-homelessness services, such as welfare payments, health and justice. The Baseline Client Survey: In total, 47 homelessness services providers from 26 agencies across the four states were approached to participate in the study. Of these, 37 services from 18 agencies agreed to participate. From these services, a total of 204 Baseline Client Surveys met the requirements to be incorporated in the analysis; 190 case managed clients (69 clients of single men's programs; 74 for single women's, 41 for tenancy support programs and six street-to-home) plus 14 day centre clients. Client needs and outcomes: Respondent clients represented a diverse group who came from a variety of different backgrounds and experienced a broad range of social, economic and health issues. The average age of respondents was 38.5 years with the majority single on entering the period of support. Approximately 80 per cent of respondents were born in Australia. Overall, 15.3 per cent of participants were of Aboriginal or Torres Strait Islander (ATSI) background. A greater proportion of day centre respondents identified as ATSI (42.9%) than case managed respondents (13.3%). Nearly two-thirds of respondents left school before completing year 12. Accommodation circumstances of respondents prior to receiving support and during support varied by program. Not surprisingly, on entering support, 63.2 per cent of tenancy support clients were in public/community or private rental accommodation, and the proportion in this type of accommodation after support commenced increased to 91.9 per cent. In contrast, 67.6 per cent of single men, 59.4 per cent of single women and 83.3 per cent of street-to-home respondents reported sleeping rough, or being in some type of temporary, short-term or crisis accommodation prior to support commencing. At the time of the survey, over 90 per cent of single men and single women were in crisis accommodation, while 80 per cent of street-to-home clients were in public/community or private rental accommodation. Overall, the majority of respondents had slept rough (68.5%), lived in crisis accommodation (72.9%), stayed with relatives or friends because they had nowhere else to go (74.7%) or lived in boarding or rooming houses (52.5%) at some time in their lives. Many report that their first experience of homelessness occurred before the age of 18. Only 7 per cent of respondents were employed at the time the survey was administered. The vast majority (98% of clients) reported receiving some type of income, with the major source being 'unemployment benefits' or 'sickness/disability benefits'. Just over 60 per cent of all respondents reported a long-standing physical health condition. The prevalence of diagnosed mental health disorders was high; particularly mood disorders (44.2%) and anxiety disorders (38.7%), both of which are considerably higher than among the general Australian population. Over one-third (40.7%) of respondents reported they were currently receiving support from a mental health service. Psychological distress (measured using the Kessler K10) was also very high for all clients; the majority (62.4%) scored in the high or very high distress categories. In contrast, in the Australian population the majority score in the low (67%) or moderate (21%) psychological distress categories. Compared with the Australian population, respondents had lower mean scores on all World Health Organisation (WHO) Quality of Life (QoL) - BREF domains with the greatest difference seen for the social relationships domain; a result consistent with all our previous work using this scale (see Flatau et al. 2008, 2012).Non-homelessness service use and cost-offsets: International and Western Australian evidence find that persons who are homeless are heavy users of government services, such as health and justice services. They are also less likely to be able to find employment. Moreover, there is a greater chance of those with a public tenancy being evicted, and there is the potential for unstable accommodation to compound other factors, such as mental health problems, which may result in any accompanying children being placed in care. Assistance to prevent a period of homelessness creates better outcomes and, on average, a lower level of contact with non-homelessness services is observed. This reduced utilisation of non-homelessness services potentially creates whole-of-government budgetary savings, referred to as cost offsets. Potential offsets examined relate to health and justice services, eviction rates from public tenancies, the cost of children placed in care due to housing instability, income levels and sources, and the effect of this on government welfare payments and taxation receipts. The method to estimate the value of cost offsets follows Flatau et al. (2008). This report uses two types of comparisons, both of which are not without conceptual difficulties, to examine the cost to government of a high use of non-homelessness services and the associated potential cost offsets. → Population-based analysis of cost to government; reported utilisation rates (and implied expenditures) from the Baseline Client Survey are compared with population rates. This provides information regarding the extent to which persons who are homeless are heavy users of non-homelessness services and can be used to examine potential cost offsets resulting from preventing a period of homelessness.

Original languageEnglish
Place of PublicationMelbourne, Australia
PublisherAustralian Housing and Urban Research Institute
ISBN (Print)9781922075277
Publication statusPublished - 1 Jan 2013

Publication series

NameAHURI Final Report
ISSN (Print)1834-7223


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