Federal Study Backs Renting Apartments for Homeless

WASHINGTON (March 25) -- It may be cheaper for taxpayers to help homeless families rent their own apartments instead of housing them in shelters and transitional housing programs, according to a new federal study that finds a wide range in costs for different responses to homelessness.

Mark Johnston, deputy assistant secretary at the Department of Housing and Urban Development, said his department is remaking its approach to homelessness and giving communities more flexibility in how they spend federal aid. HUD also is distributing $1.5 billion in stimulus funding that can be used to help homeless people rent their own apartments.

Johnston said the "groundbreaking" study would help communities that are strapped during tight economic times and facing increases in the number of homeless decide how to aid the homeless.

Housing experts say the housing bust and job losses have swollen the ranks of the homeless, including many families who don't have the same mental illness and substance abuse problems of the chronically homeless.

HUD Secretary Shaun Donovan said the study -- which was released Thursday afternoon and looks at shelters and other housing costs as well as social service program expenses -- helps pin down the true costs of homelessness.

"Now we need to have a serious discussion over what strategies are not only most cost effective, but how we can help individuals and families from falling into homelessness in the first place," Donovan said.

But Howard Husock, vice president of the conservative think tank Manhattan Institute for Policy Research, said there's a more important question than whether shelters or transitional housing or rent aid are better.

"The fundamental question is, do we want to encourage the formation of these single-parent households by paying their rent when they get their own apartment?" Husock said, noting that many single families aren't sleeping on the streets but are living with family members, such as the parents of teen mothers.

Husock said that instead of programs to help families pay rent, the federal government should expand the earned income tax credit so that working parents have more money they can spend on housing or other needs they choose.

But Nan Roman, president of the National Alliance to End Homelessness, said many homeless families try living with extended family but end up in shelters. "People try just about everything to stay out of the shelter system. It's not a very pleasant experience," she said.

The HUD study on first-time homelessness looked at programs in seven areas of the country. It found a huge range in costs for different approaches. For individuals, shelters were much cheaper than transitional housing such as apartment buildings set up for the homeless that also have services like health clinics. But the shelters were not much cheaper than finding individuals permanent housing that had social services available.

For families, the monthly costs of shelters and transitional housing were both higher than permanent housing with social services.

Roman said it's often cheaper to keep people out of the homeless system, but finding them a permanent apartment isn't easy when there are millions more poor families than there are affordable units to rent.

And Johnston said many families don't need the social services and extra care of transitional housing. Under the stimulus funding, $1.5 billion will go toward keeping people from becoming homeless and rapidly relocating those who do into apartments where they get federal rent aid for 18 months. About 150,000 households already have received aid through that program, Johnston said.

But the stimulus money "pales in comparison to the scope of the problem we are experiencing right now," said Neil Donovan, executive director of the National Coalition for the Homeless. The number of homeless families getting HUD aid went up 9 percent between 2007 and 2008, he said.

Some of the newly homeless were renting or living with relatives in homes whose owners lost them to foreclosure. Many of the people thrown into homelessness by the housing bust and economic downturn did not grow up poor and weren't like those living paycheck to paycheck who were the usual group in danger of homelessness.

"The underbelly of poverty is new to these people and it's hard to adjust to," Donovan said. "They don't know how to make accommodation to the fact their world is completely different than it used to be."