Stakeholder Trends and Insights

How $1K Can Keep Someone Off the Streets for Two Years

Each year in the U.S. more than 2.3 million people experience homelessness, 7.4 million live “doubled up” with friends or family and scores live on the edge of homelessness. Estimates are a community pays $5,000 for every person who enters a shelter, to say nothing of the social and health problems amongst homeless adults and children.

By Sheila Shayon | Published 8 years ago | About a 3 minute read

Each year in the U.S. more than 2.3 million people experience homelessness, 7.4 million live “doubled up” with friends or family and scores live on the edge of homelessness.

Estimates are a community pays $5,000 for every person who enters a shelter, to say nothing of the social and health problems amongst homeless adults and children.

But a new study by the University of Notre Dame’s James Sullivan - Rev. Thomas J. McDonagh, C.S.C., Associate Professor of Economics - and William Evans, Keough-Hesburgh Professor of Economics, conducted with the Homelessness Prevention Call Center (HPCC) in Chicago, shows that as little as $1,000 can be enough to keep someone on the verge of homelessness off the streets for at least two years.

HPCC takes an average 70,000 calls per year; the study chronicles the impact of financial assistance for 4,500 individuals and families who called between 2010 and 2012. The research included day-to-day data about entry rates.

So how $1,000 can actually keep a person off the streets for two years or more?

“Many families on the brink of homelessness need just short-term assistance to avoid falling into homelessness,” Sullivan told Sustainable Brands. “These are typically families who have resources to pay the rent going forward, but they can’t pay off the current debt. So, without help, they find themselves on the streets.”

$1,000 is a small investment against the $20,000 taxpayers can pay for an average period of homelessness in the form of welfare, policing, health care and maintaining homeless shelters.

“The structure of the Homelessness Prevention Call Center made this study possible,” Sullivan told us. “They are a centralized operation that processes all calls requesting emergency assistance in the City of Chicago. In addition, the fact that they, unfortunately, have to turn some eligible callers away because no funds are available allowed us to compare outcomes for those who call when funds are available to those who call when they are not — providing the most rigorous evidence to date on the effect of such assistance.”

Sullivan and his team tracked the two groups for several months; those who received cash were 88 percent less likely to become homeless after 3 months and 76 percent less likely after six months.

“We found no evidence that this effect fades away,” Sullivan told Science. “There is evidence that it’s a sustained impact up to two years later.”

The programs give a one-time cash amount to people on the brink of homelessness who can demonstrate they’ll be able to pay rent in the future and have been derailed by a nonrecurring crisis.

As the Science article points out, determining who will or won’t become homeless is tricky, but the data suggest that those furthest below the poverty line are more at risk and thus receive the greatest benefit from the cash infusion.

As for the longer-term effects: “The assistance doesn’t just prevent a family from being thrown out on the streets tomorrow - the positive effects are evident for at least two years,” Sullivan said.

Sullivan and team are working now on linking the HPCC data to arrest data to see if there is a relationship between homelessness and crime, and between emergency department visits to see if homelessness directly affects health outcomes.

When asked if there has been a shift in attitude towards homelessness in society and business, Sullivan told us: “For a long time, there was a sense that homelessness was an intractable problem. More recently, there is a growing sense that well-designed policies can really make a difference. A lot of progress has been made in addressing chronic homelessness, but we still have a long way to go.”

In an interesting sidebar that shows progress, it is now possible to gather data on poverty from space, and the implications for this in the fight against the problem are far-reaching.