A systematic review published in the American Journal of Preventative Medicine, “Permanent Supportive Housing with Housing First: Findings from a Community Guide Systematic Economic Review,” analyzes the cost effectiveness of Housing First programs in the U.S. and Canada. The researchers used findings from 20 studies to assess the overall cost of implementing Housing First programs, their economic benefits, and their cost efficiency. The review finds that in the U.S., Housing First programs’ economic benefits outweigh the costs: the median cost of implementing a Housing First program per person per year (PPPY) in the U.S. was $16,479, while the median benefit was $18,247.
The review defines Housing First programs as those that provide subsidized housing to households experiencing homelessness in which the head of the household has a disabling condition, including a mental health disorder, substance use disorder (SUD), or HIV. The programs are not time limited and include supportive services, such as mental health services, substance use treatment, and employment counseling.
The authors identified and reviewed 20 Housing First studies – 17 from the U.S. and three from Canada – all of which reported at least one economic outcome of the program. The review compares the economic costs of Housing First programs to costs averted as a result of the programs. Economic costs include rental costs, support service provision costs, and furnishings and relocation expenses among others, while economic benefits include decreased use of the temporary housing system, decreased use of the criminal justice system, and lower emergency healthcare costs among others. The researchers also conducted a quality assessment of each study’s estimates, assigning a rating based on the appropriateness of research design and analytic methods. All studies included in the review were rated as having at least fair quality estimates, but the researchers also reported outcomes among a subset of studies with good quality estimates.
Among the Housing First studies conducted in the U.S., the authors found that the median cost PPPY totaled $16,479. Among U.S. studies with good quality estimates, the median PPPY cost was slightly higher, at $17,069. Among interventions that solely served individuals with mental health disorders or solely served individuals with SUDs, the median costs totaled $17,963 and $17,069 PPPY, respectively. The median cost of interventions that served individuals with both SUDs and mental health disorders was significantly higher, at $29,105 PPPY.
The median economic benefit of the Housing First programs across all U.S. studies totaled $18,247 PPPY, though Housing First studies with good-quality estimates had significantly higher median economic benefits, at $33,637 PPPY. Studies that included a more comprehensive definition of economic benefits resulted in higher averted costs. Among studies that only accounted for averted healthcare costs, for example, the median PPPY benefit was $11,248. Among studies that accounted for averted healthcare, judicial system, welfare assistance, or housing assistance costs, the median PPPY benefit was $26,907.
The review thus concludes that the economic benefits of Housing First programs outweigh the costs. Across all U.S. studies, the median benefit-to-cost ratio was 1.8:1, meaning that for every $1 spent on the program, there was an economic benefit of $1.80. For good-quality U.S. studies, the median benefit-to-cost ratio was 1.3:1.
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