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Does it cost less to rehouse the homeless? A comparison of the costs of rehousing and homelessness

Faire des économies avec la remise en logement ? Une comparaison des coûts avec ceux du sans-chez-soirisme
Besparen met herhuisvesting? Een kostenvergelijking met thuisloosheid
Justine Carlier et Magali Verdonck
Traduction de Jane Corrigan
Cet article est une traduction de :
Faire des économies avec la remise en logement ? Une comparaison des coûts avec ceux du sans-chez-soirisme [fr]
Autre(s) traduction(s) de cet article :
Besparen met herhuisvesting? Een kostenvergelijking met thuisloosheid  [nl]

Résumés

La mise en place du projet « Housing First » dans plusieurs pays tels que la France et le Canada, a mis en évidence que permettre aux sans-abris d’obtenir un logement afin de les réinsérer dans la société pouvait parfois avoir un coût moindre pour l’État que le coût de les laisser dans la rue. Malgré une volonté politique belge et européenne de prévenir et de mettre fin au sans-abrisme, aucune étude n’a été réalisée sur son coût social en Belgique francophone, ne permettant donc pas d’évaluer les politiques mises en place et les changements éventuellement nécessaires. L’objectif de l’étude synthétisée ici est d’évaluer le coût social du sans-abrisme en Région de Bruxelles-Capitale, en tenant compte à la fois des coûts directs, mais aussi des coûts indirects, et de les comparer ensuite aux coûts associé à la sortie du sans-abrisme.

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Notes de la rédaction

In order to see the figures in a better resolution, go to the article online and click on “Original” below it.

Notes de l’auteur

Brussels Studies Institute, Bruss’Help, CPAS de Bruxelles-Ville, DIOGENES, DoucheFLUX, Droit à un toit/Recht op een dak, as well as 11 other contributors whose details may be found in the full report.

Texte intégral

Introduction

  • 1 The entire study may be found in the report by BAYENET, B., CARLIER, J., TOJEROW, I. and VERDONCK, (...)

1On the night of November 8-9, 2022, Bruss'help conducted a survey of homeless people in the Brussels-Capital Region (BCR): 7 134 people were counted, which represents an 18,9 % increase since the last survey in 2020. This increase has once again raised many questions about the effectiveness of public policies for the prevention of homelessness. The research summarised here was aimed at answering such questions and at objectifying the situation by estimating the costs associated with homelessness and those associated with rehousing, in order to be able to compare them1.

1. The actual cost of homelessness in the Brussels-Capital Region

1.1. The average actual annual cost per homeless person

2As regards the cost of homelessness, one automatically thinks of the costs associated with measures such as shelters, emergency accommodation, street work, etc. These measures represented a cost of over € 65 million in 2021 for COCOM, COCOF and the federal government (see Table 1). This figure does not include additional funding from VGC, VG, BCR or private donations, for which data were not available. When this amount is divided by the number of homeless people in 2020 (i.e. 5 313, which was the latest figure available at the time of conducting the research), we obtain an average amount of 12 265,58 euros spent per homeless person in 2021 (excluding the specific COVID budget).

3This amount may already seem significant. However, it does not take into account a series of other expenses incurred indirectly on behalf of the homeless. The total costs of homelessness can be divided into 4 categories: direct costs (related to services dedicated specifically to homeless people, as listed in Table 1), indirect costs (services not dedicated specifically to homeless people), lost tax revenue (due to a person not paying taxes or contributions) and finally, the cost of lost years of life.

Table 1. Funding budget for the various services dedicated specifically to the homeless in the Brussels-Capital Region in 2021

Table 1. Funding budget for the various services dedicated specifically to the homeless in the Brussels-Capital Region in 2021

Source: 2021 adjusted budget for COCOM, COCOF and the federal government

Figure 1. Flow chart of all costs related to homelessness in the Brussels-Capital Region

Figure 1. Flow chart of all costs related to homelessness in the Brussels-Capital Region

4An analysis of the average frequency of use of these various services in terms of the number of days per year as well as a number of hypotheses allow a total annual cost of the use of services per homeless person to be estimated at between 40 000 and 52 000 euros. Certain costs shown in Figure 1 could not be included in the analysis, such as food aid or costs related to the criminal justice system, which implies an underestimation of the actual cost.

Table 2. Estimated average annual cost per homeless person according to frequency of use of services in the Brussels-Capital Region in 2019

Table 2. Estimated average annual cost per homeless person according to frequency of use of services in the Brussels-Capital Region in 2019

Source: DULBEA calculations. The figures are from 2019, the last year for which complete data were available when the study was conducted

1.2. The diversity of backgrounds and the consequences in terms of costs

5In addition to being underestimated, the estimate of an average cost per homeless person masks the diversity in terms of backgrounds and the use of services for this population. An analysis based on illustrations mitigates this effect by making the same calculation for specific cases, according to estimated costs per service and per day of use (see Table 3). The first illustration is based on a simulation of the life of a single man in his forties who requires a high level of support, with drug, alcohol and mental health problems. The second illustration considers the case of a young homeless woman with two children, who lives on the streets after a separation because she was unable to bear the costs of her home alone. The third illustration simulates the situation of a person with significant mental health problems who lives alone and who finds himself on the streets due to unpaid rent. These first three illustrations are inspired by scenarios taken from studies by Pleace [2013]. The final illustration is based on an ad hoc simulation of the life of an individual with no health problems and very little use of services for the homeless. We have thus established that the annual cost of homelessness varies between 30 000 and 85 000 euros per year, depending on the type of profile and the use of dedicated services.

Table 3. Estimated annual cost of four profiles of homeless people based on data from 2019

Table 3. Estimated annual cost of four profiles of homeless people based on data from 2019

Source: DULBEA calculations. The figures are from 2019, the last year for which complete data were available when the study was conducted

2. The cost of rehousing in the Brussels-Capital Region

2.1. Housing First programmes

6Faced with the increase in the number of homeless people in New York in the 1990s and the realisation that a significant proportion of these people – who were suffering from mental illness or addiction – were not benefitting from the traditional programmes to fight homelessness, a thorough rethinking of these programmes took place [Pleace, 2016]. In traditional programmes, abstinence and total sobriety are required of individuals before they can obtain housing, as the final step in a long process [Tsemberis, Gulcur and Nakae, 2004]. In order to meet the needs of this population, an innovative model which reverses the codes has been developed, whereby housing is considered a fundamental right. Instead of being the last step in a process, it becomes the first, and beneficiaries can decide whether or not to undergo treatment. Programmes such as these have also existed in Belgium since 2013, under the name Housing First. They include rehousing and intensive support.

2.2. The average annual cost of rehousing

7In order to compare the cost of homelessness in BCR with the cost of rehousing, we have based ourselves on different scenarios in which people have access to social housing (or private housing at social rates) for which they pay part of the rent thanks to a replacement allowance (unemployment, incapacity for work, disability or social integration income), and can benefit from support (Housing First or traditional) if they choose to do so. Compared with street support, rehousing generates a number of specific additional costs, as shown in Figure 2.

Figure 2. Flow chart of costs related to rehousing in the Brussels-Capital Region

Figure 2. Flow chart of costs related to rehousing in the Brussels-Capital Region

8However, the increase in these costs is associated with a reduced use of a number of services (whose costs are decreasing), as seen in the comparison in Table 4.

Table 4. Changes in the use of different services by Housing First beneficiaries in Belgium (number of days per person)

Table 4. Changes in the use of different services by Housing First beneficiaries in Belgium (number of days per person)

Source: Table based on data from the Valsamis report [2016]

9By estimating the average use of the above-mentioned services (Figure 1), and adding the social benefits, income and support available once people have been rehoused (Figure 2), we estimated that the total cost of rehousing could vary between 33 000 (social integration income + social housing and no support) and 74 000 euros per year (incapacity for work benefits + private housing with rent compensation, with support such as Housing First). Table 5 below details the cost of various scenarios. Generally speaking, we can see that with a social integration income, the cost of rehousing is the lowest, while the incapacity for work benefits generate the highest cost. We notice that the cost of rehousing can therefore sometimes be lower than the cost of homelessness, and is rarely much higher.

Table 5 Estimated average annual cost of a person rehoused in social housing, according to frequency of use of services and type of replacement income, with Housing First support in the Brussels-Capital Region in 2019

Table 5 Estimated average annual cost of a person rehoused in social housing, according to frequency of use of services and type of replacement income, with Housing First support in the Brussels-Capital Region in 2019

Source: DULBEA calculations

Table interpretation: For example, a person rehoused with Housing First support who receives disability income and makes moderate use of services (82 days/year) generates an annual cost of 54 618 euros.

  • 2 Estimate based on the Bruxelles Logement rent simulator for a 40 m² studio in Forest and a 1-bedroo (...)

10If Housing First support is replaced by traditional support, the cost decreases by € 27 per day, i.e. € 9 855 per year. Finally, if a person is in private housing with rent compensation (the difference between the average rent for social housing and that for private housing is paid by the state, amounting to around € 300 per month2), this increases the cost of rehousing by around € 3 500 per year.

3. The need for additional dynamic analysis

11This study has brought to light an important fact: in certain cases, the cost of rehousing is lower than the cost of remaining homeless. While this finding may be surprising, it has merely confirmed the intuition of frontline staff.

12However, our analysis was static, as it focused on the annual cost for a given year. It did not take into account the dynamic elements influencing the costs of the two options, very likely in opposite directions. Living on the streets can also worsen the health of homeless people, thus increasing their needs, as the prevalence of problems related to mental health, physical health and substance use is higher for homeless people than it is for the general population [Latimer et al., 2014]. On the other hand, once rehoused, a person may initially need more support and care, but thanks to better health, greater stability and possible employment, these needs may diminish over time, thus reducing costs. The comparison perhaps even leans more towards rehousing in certain specific cases. A study involving a dynamic analysis of the costs would be useful to confirm this point.

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Bibliographie

CULHANE, D. P., METRAUX, S. and HADLEY, T., 2002. Public service reductions associated with placement of homeless persons with severe mental illness in supportive housing. In: Housing policy debate, vol. 13, No 1, pp. 107-163.

HORVAT N. and STRIANO M., 2020. Dénombrement des personnes sans-abri et mal logées en Région de Bruxelles-Capitale, Bruss’Help. Sixth edition, 9 November 2020.

LATIMER, E., RABOUIN, D., MÉTHOT, C., McALL, C., LY, A. and DORVIL, H., 2014. At Home/Chez soi Project-Montréal Site Final Report/Projet Chez soi-Rapport final du site de Montréal. Calgary: Mental Health Commission of Canada.

PLEACE, N., BENJAMINSEN, L., BAPTISTA, I., and BUSCH-GEERTSEMA, V., 2013. The costs of homelessness in Europe: An assessment of the current evidence base. FEANTSA (European Federation of National Organisations Working with the Homeless).

PLEACE, N., 2016. Guide sur le logement d’abord en Europe. FEANTSA (European Federation of National Organisations Working with the Homeless).

TINLAND, A., GIRARD, V., LOUBIÈRE, S. and AUQUIER, P., 2016. Un chez-soi d’abord. Rapport intermédiaire de la recherche. Volet quantitatif. Direction générale de la Santé. France.

TSEMBERIS, S., GULCUR, L. and NAKAE, M., 2004. Housing first, consumer choice, and harm reduction for homeless individuals with a dual diagnosis. In: American Journal of Public Health. Vol. 94, No 4, pp. 651-656.

VALSAMIS D., 2016. Analyse d’efficience des pratiques Housing First menées dans le cadre de Housing First Belgium en Belgique, IDEA Consult. http://www.housingfirstbelgium.be/fr/

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Notes

1 The entire study may be found in the report by BAYENET, B., CARLIER, J., TOJEROW, I. and VERDONCK, M., 2022. Le sans-chez-soirisme : Suite ou fin ? written for Syndicat des Immenses and Droit à un toit/Recht op een dak. https://dulbea.ulb.be/wp-content/uploads/2023/06/Sans-chez-soirisme_rapport-final-et-resume-operationnel.pdf

2 Estimate based on the Bruxelles Logement rent simulator for a 40 m² studio in Forest and a 1-bedroom apartment in Schaerbeek.

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Table des illustrations

Titre Figure 2. Flow chart of costs related to rehousing in the Brussels-Capital Region
URL http://journals.openedition.org/brussels/docannexe/image/7308/img-1.png
Fichier image/png, 56k
Titre Figure 1. Flow chart of all costs related to homelessness in the Brussels-Capital Region
URL http://journals.openedition.org/brussels/docannexe/image/7308/img-2.png
Fichier image/png, 56k
Titre Table 4. Changes in the use of different services by Housing First beneficiaries in Belgium (number of days per person)
Crédits Source: Table based on data from the Valsamis report [2016]
URL http://journals.openedition.org/brussels/docannexe/image/7308/img-3.png
Fichier image/png, 146k
Titre Table 5 Estimated average annual cost of a person rehoused in social housing, according to frequency of use of services and type of replacement income, with Housing First support in the Brussels-Capital Region in 2019
Crédits Source: DULBEA calculations
URL http://journals.openedition.org/brussels/docannexe/image/7308/img-4.png
Fichier image/png, 36k
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Référence électronique

Justine Carlier et Magali Verdonck, « Does it cost less to rehouse the homeless? A comparison of the costs of rehousing and homelessness »Brussels Studies [En ligne], Fact Sheets, n° 189, mis en ligne le 11 février 2024, consulté le 27 février 2024. URL : http://journals.openedition.org/brussels/7308 ; DOI : https://doi.org/10.4000/brussels.7308

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Auteurs

Justine Carlier

Justine Carlier is an economist and doctoral student in the Department of Applied Economics at Université libre de Bruxelles (DULBEA). After working on the issue of homelessness, her work now focuses on well-being at work.
justine.carlier[at]ulb.be

Magali Verdonck

Magali Verdonck is a doctor of economics and senior economist in the Department of Applied Economics at Université libre de Bruxelles (DULBEA). Her work focuses on public finance and public policy evaluation. She recently published a study on the taxation of large estates in Belgium for the Federal Planning Bureau.
magali.verdonck[at]ulb.be

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