A penny saved...

Now is not the best time to be a government bookkeeper. It seems that every level of  public administration–federal, state, and local–is confronting the worst budget environment in recent memory. As deficits balloon and public debt levels skyrocket, the instinct to slash and burn what many feel is a bloated, unwieldy public sector becomes all the more appealing.

In this type of climate, it’s often easy to forget that well-designed, strategic public spending– and private philanthropy for that matter–can often SAVE LOTS OF MONEY down the road. And, as some recent statistics about the hidden costs of homelessness bears out, United Way’s emphasis on permanent housing provides a perfect example.

Here is some of the most compelling data:

• Emergency shelter is much more expensive than permanent housing. The cost of an emergency shelter bed funded by HUD’s Emergency Shelter Grants program is approximately $8,067 more than the average annual cost of a Section 8 Housing Certificate. Another recent HUD study found that the cost of providing emergency shelter to families is generally as much or more than placing them in transitional or permanent housing. This just reflects savings in the cost of shelter; it does not take into account potential savings from other areas such as health care.

• The University of Texas conducted a two year study and reported each homeless person cost taxpayers $14,480 per year, primarily for overnight jail. Other studies have put the cost of a bed in a state or federal prison at $20,000 per year.

• A Los Angeles study (where 10 percent of the nation’s homeless are located) found that placing four chronically homeless people into permanent supportive housing saved the city more than $80,000 per year.

• Five studies quoted in Opening Doors produced evidence of reductions in the utilization of major services before and after homeless persons were entered into supportive housing programs.

And these statistics don’t even begin to describe the second and third-order benefits of permanent housing: cleaner and safer downtowns; the utilization and renovation of unused commercial and residential real estate; shorter waiting times in acute care centers and emergency rooms.

This is not to detract from the moral imperative of making sure the most vulnerable among us have a roof over their heads. But, as the evidence clearly demonstrates, compassionate policy can also be smart policy.