Housing project for hard-core homeless pays off

An ambitious program to provide permanent housing to some of Los Angeles County’s most hard-core homeless more than paid for itself, yielding a net savings of $238,700 over two years, officials said Thursday.

The long-awaited findings, presented to a countywide panel on homelessness, support a growing consensus across the country that getting the most entrenched street dwellers into permanent homes and providing them the services they need to stay off the streets can save municipalities money.

More than 51,000 people are homeless on any given night in the county, according to the Los Angeles Homeless Services Authority. About a quarter of them are considered chronically homeless, meaning they have been homeless for at least a year and suffer from a serious physical, mental or substance abuse problem.

Project 50 was controversial because it did not require people to get sober before they were housed. But advocates of the so-called housing-first approach say a permanent roof provides the stability chronically homeless people need to get their lives back on track.

The project, championed by Supervisor Zev Yaroslavsky, began in late 2007 with the goal of finding and housing the 50 most vulnerable, long-term homeless living on the streets of skid row in downtown Los Angeles. Since then, the number of participants has grown to 133, of whom 94 remain housed, seven are incarcerated, 12 have died and 20 left the program.

“My notion was that front-end investment in social services and stable housing would not only prove to be vastly more humane, but less costly for the public treasury,” Yaroslavsky said in an email. “This audit makes the case for accelerating the county’s efforts to house the chronically homeless and provide them with the critical social services they need.”

The study, conducted by a county research unit, compared 50 participants who moved into apartments to a similar group of homeless adults who did not join the program.

Between 2008 and 2010, the program cost the county $3.045 million but generated $3.284 million in estimated savings, the report said. That is equivalent to a $4,774 surplus for each apartment provided, it said.

Mental health costs for the participants increased 367% in the first year, compared to a nearly 200% increase for non-participants. Manuel Moreno, the study’s lead investigator, said the higher figure could be because serious problems had gone largely untreated before participants were admitted to the program.

The increase in costs for drug and alcohol abuse treatment was higher for the control group than for Project 50 participants. Moreno said non-participants were more likely to use lengthy residential programs than participants, who generally received less expensive out-patient services.

Those costs were offset by savings generated because participants were no longer cycling in and out of hospital emergency rooms, shelters and jails, the report said. Incarceration costs for program participants, for example, fell 28% in their first year in the program, compared to a 42% increase for non-participants. By the second year, the number of incarcerated participants dropped from 24 to 5.

Medical costs for the participants fell 68% in their first year, compared to a 37% drop for the control group. Participants went from receiving most of their care through expensive emergency and inpatient services to making greater use of clinics, the report said.

More than 130 communities across the country have launched similar initiatives, according to the 100,000 Homes Campaign, which aims to permanently house 100,000 homeless people by July 2014. Together, those programs have housed 16,944 people, including 1,664 in Los Angeles County, according to figures collected by the group.

After years of debate about the approach, the Board of Supervisors in 2011 endorsed a plan submitted by business leaders that makes it a priority to provide the chronically homeless with permanent housing and support services. The county’s Interdepartmental Council on Homelessness is now considering strategies to address homelessness among other populations, including youths, veterans and families.