Today’s Read: Paying to Keep People in Their Homes Can Save Cities Money
The best way to combat homelessness is to prevent it in the first place. That’s why the Coalition’s Eviction Prevention Program, which rescues individuals and families from the brink of homelessness by offering one-time grants, is such a successful model – and one that is also being used by local governments.
As the housing affordability crisis worsens, more and more New Yorkers are struggling to keep up with their rent payments, and a single unforeseen expense can cause them to fall into arrears. From fiscal year 2002 to fiscal year 2014, the percentage of families entering shelter following an eviction rose from 17 percent to 32 percent. A one-time grant to pay off the arrears is often all that is needed to help them remain stably housed and avoid the trauma of homelessness.
Homelessness prevention isn’t just a compassionate strategy – it’s also cost-effective. It might seem counterintuitive, but using public dollars to pay off rental arrears is a sound investment: Keeping a family in their home saves taxpayers an impressive $38,000 per year in shelter costs.
The Economist recently covered the expansion of government eviction prevention services:
If Belgica loses her home, she and her children will probably end up in a homeless shelter. This would cost the city a bundle. By law, New York must provide emergency shelter to anyone who needs it, at more than $100 per night for a family. Families then linger for around 415 nights, on average, as placing them in new homes is both costly and difficult (landlords dislike tenants who have been evicted). When children become homeless, the secondary costs are higher, as studies show they are more likely to enter foster care, drop out of school and wind up in jail. With around 60,000 people now in shelters, up from about 38,000 in 2010, the city is spending over $870m a year on emergency beds alone.
So it makes sense to keep people like Belgica in their homes, and this is exactly what New York is trying to do. Bill de Blasio, the city’s mayor, recently pledged an extra $100m in the 2016 budget to cover new rent subsidies and provide legal help to fight evictions, among other benefits. The city has also doubled to $42m the budget for a programme called Homebase, started in 2004, which offers specialised services to people on the verge of eviction. For example at BronxWorks, one of 23Homebase outposts, a caseworker will help pay off Belgica’s debts and contest her eviction in court. She will also get financial counselling and, in a few months, some job training. Of the 16,000 families taken on by Homebase caseworkers this year, 95% are still in their homes. It pays off; Abt Associates, a consulting firm, has found that for every dollar Homebase spends, the city saves $1.06 in shelter expenses.