The hidden costs of homelessness

are high, according to a new report, summarized by Gordon Laird in the Toronto Star:

According to a new report from the Sheldon Chumir Foundation for Ethics in Leadership, Shelter: Homelessness in a Growth Economy, homelessness is costing Canadian taxpayers $4.5 billion to $6 billion a year.

Canada in 2007 collectively spends more managing homelessness than it spends on international development ($4.1 billion) or on annual debt reduction ($3 billion). In fact, the cost of homelessness in Canada is comparable to the cost of the $4.35 billion 2006 GST tax cut and the entire 2007 environment plan on climate change, fresh water and wildlife conservation.

Since the early 1990s, Canada’s main response to homelessness has been to build new emergency shelter beds and fund front-line services to help contain and warehouse a growing pool of homeless Canadians.

It hasn’t worked. Welfare services, municipal services, provincial health-care systems and the non-profit sector have been left to take up the slack for the estimated 300,000 homeless people as well as the upwards of 2.7 million low-income Canadians who now face housing affordability problems.

This nation’s decade of relative inaction on homelessness, from 1993 to 2004, cost Canadian taxpayers an estimated $49.5 billion, across all services and jurisdictions.

This is a similar finding to a report done for the BC government in 2001 that found that:

The figures show that in 1998–1999, providing major government health care, criminal justice and social services (excluding housing) to the homeless individuals in this study cost, on average, 33 per cent more than the housed individuals in this study ($24,000 compared to $18,000). The major cost category for many of the homeless individuals in this sample is criminal justice (average $11,000 for one year). The major cost category for most of the housed individuals in this study is social services (average $9,000), consisting primarily of BC Benefits (British Columbia’s income support program).

… When combined, the service and shelter costs of the homeless people in this study ranged from $30,000 to $40,000 on average per person for one year (including the costs of staying in an emergency shelter). The combined costs of services and housing for the housed individuals ranged from $22,000 to $28,000 per person per year, assuming they stayed in supportive housing. Thus, even when housing costs are included, the total government costs for the housed, formerly homeless individuals in this study amounted to less than the government costs for the homeless individuals. Providing adequate supportive housing to the homeless people in this sample saved the provincial government money.

Which leads to Laird’s punchline:

Many governments, both here and abroad, are championing the notion of “Housing First,” that is, immediately addressing housing needs through rent supplements. It has finally been recognized that homeless shelters are effective only as a short-term measure.

Housing each homeless person saves both taxpayers and government money and frees up resources to invest elsewhere. In Toronto, for example, taxpayers pay 2.5 times as much for homeless shelters as for rent supplements.

Rather than tolerate failure, Canada should consider the kind of integrated, results-oriented “Housing First” approach currently underway in the United States and Britain. Ideally, homelessness, affordable housing and poverty reduction would be integrated into a national strategy. This would require high-level leadership from Canada’s federal cabinet, as well as provincial and municipal participation.

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