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How Preventing Homelessness Reduces Costs

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Have you ever heard the adage that an ounce of prevention is worth a pound of cure? When it comes to homelessness, it is certainly true. Preventing homelessness reduces costs to the household and our community.

Unfortunately, most funding focuses on addressing homelessness after it has happened. In other words, most funding focuses on the pound of cure. As a result, we are spending millions of dollars trying to address the needs of people and households that have lost all their possessions and must start from scratch to build their lives.

Preventing homelessness reduces costs to the household

Most homelessness is driven by a financial crisis, not substance misuse or mental health disorders. Homelessness disproportionately impacts low-income households living paycheck to paycheck without a social safety-net. These individuals are often paying 50% or more of their paychecks for housing, with little room for unexpected expenses.

If this surprises you, check out this recent article in The Atlantic: “The Obvious Answer to Homelessness and why everyone’s ignoring it,” by Jerusalem Demsas. You can also learn more about indicators of risk on the End Homelessness website.

As a service provider focused on addressing homelessness for families and employees, we see the aftermath of losing housing. When we find an apartment for a family, it is often completely empty: no furniture, pots and pans, towels, or toilet paper. The family is starting over, and that is extremely expensive. This keeps them from saving any money in reserve. As a result, if they experience another financial crisis, they are at significantly increased risk of becoming homeless again.

So far, I’ve addressed just the financial cost. There is an emotional cost as well, particularly for children. Children who have experienced homelessness are more likely to go hungry, have health problems, repeat a grade at school, and develop major mental health disorders. The impact of this trauma is lifelong and significantly impacts that child’s future success and stability.

Preventing homelessness reduces costs to the community

According to a study by the US Department of Housing and Urban Development entitled Costs Associated with First-Time Homelessness for Families and Individuals, “the costs associated with providing housing for individuals and families who are homeless within a program exceeds the Fair Market Rent cost of providing rental assistance without supportive services.” According to our calculations at Wellspring Family Services, paying rent for a short period of time to prevent homelessness could save as much as 67% of the cost of services for a family who has lost their housing and moved into a shelter.

A University of Chicago study found that 53% of adults in homeless shelters had employment income.  40% of adults who were unhoused were employed. An article by Axios, entitled “The working homeless isn’t just a tech bubble problem”, cites estimates that between 25% and 60% of people experiencing homelessness have employment income. These numbers don’t include the 3.7 million Americans who double up on housing, a form of homelessness that is often a precursor to becoming unhoused.

Preventing homelessness for households with employment saves communities the higher costs of shelter, while preventing greater trauma within families. Unfortunately, most funding programs focus on households after they have become homeless.

Home Runs for Housing funds homelessness prevention for employees experiencing instability

Most homelessness services are funded by government contracts. Since funding is limited, governments tend to focus on the individuals who are most visible (and of most concern to residents), and individuals who are in the worst situations (living outside or in a shelter). They are funding services for those with the greatest needs. This leaves the households with income without assistance. In order to access help, many have to lose or quit their jobs.

At Wellspring, we are focused further upstream with the goal of preventing homelessness. Ideally, we can step in before an employee loses their job. Serving households while they are still employed is both less expensive and more likely to drive sustained stability. Unfortunately, few government contracts fund services for the households we target.

You can help employees regain housing stability

Your pledge to Home Runs for Housing will help employees maintain or regain stable housing. Please consider making a donation of $5 per home run to help support our effort. Our goal is to raise $2,000 in pledges per home run before we leave on our Baseball Fan Grand Slam adventure in mid-July!

Follow along on our website as we crisscross the nation, counting home runs for every game we see. Then, when we return, we’ll send you a link to our fundraising page with Wellspring Family Services, a nonprofit based in Seattle. Your donation will support employees across the United States, and are tax deductible to the extent provided by law.

Thank you for your support of Home Runs for Housing, Wellspring Family Services, and employees experiencing homelessness in our country.