Annual Cost of Meeting Unmet Demand for Sheltering People Experiencing Homelessness Estimated at $4.5 Billion

Research published in Housing Policy Debate, Estimated Revenue of the Nonprofit Homeless Shelter Industry in the United States: Implications for a More Comprehensive Approach to Unmet Shelter Demand,” estimates that nonprofit providers of shelter and temporary housing for people experiencing homelessness received $8.5 billion in 2015. The authors estimate that providing shelter for every person experiencing unsheltered homelessness would have cost an additional $4.5 billion in 2015.

The authors used HUD’s 2015 Housing Inventory Count to estimate that 9,354 organizations were providing emergency shelter (for less than 6 months), transitional housing (6 months to 2 years), rapid rehousing (programs that expedite return to housing through rental assistance and other supports), or permanent supportive housing (indefinite duration of financial assistance). These organizations offered 456,496 temporary beds and 266,007 permanent housing units in 2015. 

Combining HUD’s 2015 Housing Inventory Count data with the Internal Revenue Service’s Form 990 for nonprofits, the researchers found that organizations providing only shelter received revenue of approximately $14,064 per bed in 2015 for single adults, while those providing shelter with additional services like behavioral and mental health services, case management, or legal services, received revenue of $25,806 per bed in 2015. The systemwide average revenue per temporary bed in emergency shelters and transitional housing is $27,589 and $32,511 per permanent supportive housing unit, which can sometimes house more than one single adult. The authors limited their revenue analysis to the 783 organizations that provided only a single type of program to a specific population.

The authors introduce a middle and a high estimate for these calculated averages. If using $27,500 per year per bed, the estimated revenue is $10.5 billion in 2015. They believe this is an upper-bound estimate because their estimates are extrapolated from only 18% of all service providers and may include revenue from additional services not related to providing shelter. The modal value of $16,000 per bed, which is much closer to the $14,064 estimate for providing shelter alone for single adults, likely yields a better estimate of the true total revenue, around $8.5 billion in 2015.

An estimated 226,080 people experiencing homelessness were unsheltered in 2020, and more may be unseen and uncounted in estimates. People who were unsheltered represented 39% of the total homeless population and 51% of the single adult homeless population. Using an estimate of $16,000 per bed and adjusting for an undercount of unsheltered homelessness, the authors estimate that an expansion of shelter services to accommodate all unsheltered persons would cost an additional $4.5 billion annually.

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