Officials and nonprofit leaders keep pursuing the same old housing strategy for the poor – try to get more tax money to build more subsidized housing – in the face of glaring statistics that it simply does not work. What they refuse to try is a rent escrow law, the surest way to improve the supply of low-income housing – at zero taxpayer cost.
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The bad news is that homelessness is up for Boston families for the third straight year in a row, the Boston Globe reported recently. The number of homeless families jumped 17% over the past year, adding 448 family members to the homeless rolls. What the Globe did not mention is that Massachusetts is nearing the end of a ten-year plan to end homelessness by 2010. That goal obviously will not be met.

The ten-year plan features “Housing First” as its motto, by which it means to build and maintain “permanent” subsidized housing for the homeless instead of providing shelters with a host of supportive services.

Meanwhile, homelessness of individuals (as opposed to families) in Boston did decline by 5%. But that improvement is hardly much consolation since the net total of homeless individuals in Boston – counting families and individuals together – rose by 4%.

Check the figures

Building and maintaining subsidized housing for the homeless is almost as expensive as building and maintaining homeless shelters, including supportive services in both cases. Let’s read carefully a quotation from the Massachusetts Housing and Shelter Alliance’s website in which it brags about the decline in “per-person” cost under the “Housing First” initiative:

The costs per [homeless] person per month, including the cost of housing and services, decreased from $2,720 before housing to $1,939 after housing placement, a monthly savings of $781 per person. Most of these savings are a result of a drastic decrease in costly inpatient medical care.

www.mhsa.net, “Home and Healthy for Good Report to Legislature

Note that the savings in cost comes from sharply reducing inpatient hospital care for the homeless. This means, we suspect, that recovering homeless individuals cannot be discharged to the streets or to a shelter as quickly as they can be discharged to an apartment. Now a further thought: if most of the savings from “Housing First” comes from reducing inpatient hospital care, the actual cost of providing a subsidized apartment with supportive services is not much different than providing a shelter bed with supportive services. It is hard to imagine why the costs are so great – over $23,000 a year for one homeless person – other than the general inefficiency of any government or nonprofit operation.

Why not private housing?

Let us look further at the exorbitantly high monthly cost of maintaining one homeless individual in a subsidized apartment with supportive services: $1,939 per month. By comparison, a privately owned rooming house costs about $650 to $700 a month for a room for one person, leaving $1,239 a month for supportive services – if enough private rooming houses were available.

SPOA strongly recommends that the government create a friendly business climate for private rooming houses – including rapid eviction if necessary for disruptive or nuisance individuals so that the stigma of rooming houses is removed – and use private housing for homeless individuals where supportive services may also be provided. Managing the homeless is clearly a “niche” industry funded primarily by taxpayers through government agencies and nonprofit organizations. At least some of the cushy jobs involved can be eliminated by using private housing in this way.