Executive summaryEvidence is clear that ignoring the long-term needs of people with persistent homeless-ness and serious disabilities is costly and ineffective. Caring for this population (oftenreferred to as the Òchronically homelessÓ) in emergency settings, such as hospitals, andthen releasing them back to a life of homelessness with its inherent health risks createsa short-sighted, costlycycle. Each year, addi-tional studies show thatproviding permanentsupportive housing Ñpermanent, affordablehousing coupled with acomprehensive array ofservices tailored to indi-vidual needs, such aspreventative health careand substance abusecounseling Ñ vastlyimproves the effective-ness of public dollarsspent for the chronicallyhomeless. Studies showthat:

n Providing supportivehousing to people with chronic homelessness cuts their average health care, policeand prison costs in half by encouraging preventive health care rather than emergencymedical treatment and drastically reducing the frequency of incarceration.1 Forexample, movers into permanent supportive housing in Connecticut reduced theirMedicaid usage for inpatient services by 71%. (Arthur Andersen LLP, 2002)

n Since the cost of the services they need decreases so dramatically when a chroni-cally homeless person becomes housed, public funds formerly spent on costlyemergency services can be used instead to pay for permanent housing.Consequently, the total monetary cost of providing a comprehensive package ofpermanent supportive housing is less or not much more than the costs of the emer-gency interventions required for people who remain chronically homeless.2

n Public dollars spent to move a chronically homeless person to permanent support-ive housing achieve far more desirable long-term outcomes than serving themthrough emergency services. The vast majority of chronically homeless individu-als who enter permanent supportive housing remain in their homes, leading morehealthy and stable lives, freeing up much-needed beds in emergency shelters, andreducing overall homelessness in the community.3

n People with chronic homelessness are unlikely to extricate themselves from home-lessness without help. It is extremely difficult for chronically homeless people to

1 Supporting studies include Mondello, Gass, McLaughlin, and Shore, 2007; Moore, 2006; and Culhane, Metraux, and Hadley, 2002. 2 See note 1. 3 Supporting studies include Mondello, Gass, McLaughlin, and Shore, 2007; Tsemberis and Eisenberg, 2000; Trotz, 2005; and

Arthur Andersen LLP, 2002.

Data source: Mondello, Gass, McLaughlin, and Shore, Costs of Homelessness: Cost Analysisof Permanent Supportive Housing, State of Maine, Greater Portland, 2007 and Houghton, T.,The New York/New York Agreement Cost Study: The Impact of Supportive Housing on ServicesUse for Homeless Mentally Ill Individuals, 2001.

recover from an illness or obtain the treatment they need without a permanent homeor support services. They are likely to need services in a variety of areas, such as pri-mary and mental health care, substance abuse treatment, income and employment,and life skills, delivered through an extremely well-integrated system. (U.S.Substance Abuse and Mental Health Services Administration, 2003)

A growing body of evidence of cost offsets and improved outcomes has promptedmany states and communities to increase their stock of permanent supportive housing.As of March 2008, reports document-ing the costs offset by permanent sup-portive housing have been publishedin at least 20 different U.S. locations.4Studies in other locations are still inprogress or had results that were incor-porated in local planning documentsand not separately published.

Addressing the diverse needs of thechronically homeless requires that pol-icy makers, housing managers, andservice providers invest time andeffort into forging new partnerships.However, as shown by existing stud-ies, this investment is well worth theindividual and community benefits ofproviding healthier, stable lives forpeople who would otherwise spendtheir lives on the streets. Increasing the supply of permanent supportive housing is away for society to accept its collective responsibility for distributing resources so thateveryone, including those with the most complex needs, has access to housing.

4 Links to these studies are available in this report’s bibliography and the “Evaluation and Research Resources – Chronic Homelessness”section of the Corporation for Supportive Housing’s on-line library at http://www.csh.org/index.cfm?fuseaction=document.selectSubTopics&parentTopicID=42.

Data source: Mondello, Gass, McLaughlin, and Shore, Costs of Homelessness: Cost Analysisof Permanent Supportive Housing, State of Maine, Greater Portland, 2007.

$1,600

$1,400

$1,200

$1,000

$800

$600

$400

$200

0

Costs per Day in Nine Cities of Supportive Housing and Emergency Servicesfor Chronically Homeless People

Supportivehousing

Jail Prison Shelter MH Hospital Hospital

Atlanta $33 $53 $47 $11 $335 $1,637

Boston $33 $92 $117 $40 $541 $1,770

Chicago $21 $60 $62 $22 $437 $1,201

Columbus $30 $70 $59 $25 $451 $1,590

Los Angeles $30 $64 $85 $38 $607 $1,474

New York $42 $165 $74 $54 $467 $1,185

Phoenix $21 $46 $87 $22 $280 $1,671

San Francisco $42 $94 $85 $28 $1,278 $2,031

Seattle $26 $88 $96 $17 $555 $2,184

Median $30 $70 $85 $25 $467 $1,637

Data source: The Lewin Group, “Costs of Serving Homeless Individuals in Nine Cities,” 2004

Med

ian

cost

spe

rda

y

2 THE COSTS AND BENEFITS OF ASSISTING VERMONT’S CHRONICALLY HOMELESS

IntroductionAlthough homelessness is not acceptable on any level, the extent towhich different people experience homelessness in Vermont variesgreatly. At one end of the spectrum, unexpected events leave some of usstruggling to make ends meet and at risk of losing our homes. Furtheralong the spectrum, some neighbors lose the struggle and face tempo-rary periods of homelessness. Vermonters at the other end of the spec-trum face a life of persistent homelessness, many of whom have debili-tating illnesses or addictions. Chronically homeless people may havesevere mental illness, substance abuse problems, other disabling med-ical conditions, or an all too common combination of these conditions.

The term ÒpermanentÓ housing is important because it differs fromother types of housing for the homeless, such as emergency overnightshelters, or transitional housing which is often available for a limitedamount of time, such as 6 months to 2 years. Both emergency sheltersand transitional housing usually have some level of supportive servic-es, or at least can connect people with available community resources.Permanent supportive housing typically provides:

n Individually tailored and flexible supportive services that are vol-untary and easily accessed and not a condition of ongoing tenancy;

n Leases that are held by the tenants without limits on the length ofstay; and

n Ongoing collaboration between service providers, property man-agers, and tenants to preserve tenancy and resolve crisis situationsthat may arise (Caton, Wilkins, and Anderson, 2007).

Vermont has the highest rate of overall homelessness in New England,according to the latest comparison of homeless count results for theregion (Univ. of Mass.-Boston, 2007). Vermonters who are chronicallyhomeless outnumber the permanent supportive housing units dedicat-ed to them by more than 2 to 1 (VT Continuums of Care, 2007). Thisleaves many chronically homeless people on the streets or cycling inand out of shelters, hospitals, and jails. A desire to shift public moneyspent on emergency services for the homeless to an approach with bet-ter long-term outcomes prompted a coalition of organizations toexplore the likely effects of increasing the availability of permanentsupportive housing in Vermont. Commissioned by these organiza-tions, this paper identifies potential costs and benefits of providingchronically homeless Vermonters with permanent supportive housing,based on research in other areas of the country.

The information presented in this paper is primarily from studies onthe costs of homelessness compared to the costs of providing perma-nent supportive housing to people who were chronically homeless inareas outside Vermont. Due to its timeliness and the similarities that

Vermont has the highestrate of overall

homelessness inNew England

Chronically homelesspeople may have severe

mental illness, substanceabuse problems, other

disabling medical or an alltoo common combination

of these conditions

VERMONT HOUSING FINANCE AGENCY 3

exist between Vermont and Maine such as location, population, andrural environment, a recent report on permanent supportive housingin the greater Portland, Maine area is most often cited. In addition toinformation from existing studies, this paper also includes selectedinformation on costs associated with chronically homeless Vermonters.

The chronically homeless have complex needs HUD defines chronic homelessness as an unaccompanied homeless indi-vidual with a disabling condition who: (1) has been continuously home-less for a year or more; or (2) has had at least four episodes of homeless-ness in the past three years. A disabling condition is defined as Òa diag-nosable substance abuse disorder, a serious mental illness, developmen-tal disability, or chronic physical illness or disability, including the co-occurrence of two or more of these conditions.Ó (U.S. Dept. of Housingand Urban Development, Sept. 2007)

The chronically homeless consume most of the social services targetedfor the homeless population, and are unlikely to find homes withoutsignificant housing and service supports. (U.S. Substance Abuse andMental Health Services Administration, March/April 2005) Living inan emergency shelter or on the streets with disabling conditions isextremely difficult when stressful living conditions exacerbate symp-toms and make it difficult to follow through with treatment and receivepreventive care.

According to the U.S. Substance Abuse and Mental Health ServicesAdministration, a fundamental tenet underlying assistance to thechronically homeless must be that people with serious mental illnessand/or substance use disorders can and do recover, despite widespreadbeliefs that these conditions are permanent (U.S. Substance Abuse andMental Health Services Administration, 2003). Offering safe and afford-able housing can go a long way in achieving that goal, however, recov-ery also requires coordinated multiple services including:

Facts and figures on Vermont homelessness, 2007

Homelessness rate per thousand residents 3.4%

Total number of people served annually in Vermont shelters 3,463

Percentage single adults 63%

Percentage in families 37%

Percentage adults 72%

Percentage children 28%

Estimated chronically homeless 191

Households in permanent supportive housing 184

Data sources: VT Office of Economic Opportunity, Emergency Shelter Grants Program Fiscal Year 2007 Report;University of Massachusetts-Boston, “Homelessness In New England”; and VT Continuums of Care 2007 applica-tions for Chittenden County and the Balance of State.

The chronicallyhomeless consumemost of the socialservices targeted forthe homelesspopulation, and areunlikely to find homeswithout significanthousing and servicesupports

4 THE COSTS AND BENEFITS OF ASSISTING VERMONT’S CHRONICALLY HOMELESS

n Health caren Mental health servicesn Substance abuse treatmentn Income supports and entitlementsn Life skills trainingn Educationn Employment

These services are most effective if pro-vided through a comprehensive, integrat-ed system of care that is seamless to therecipient (U.S. Substance Abuse andMental Health Services Administration,March/April 2005).

Most of VermontÕs existing stock of 175permanent supportive housing units forthe chronically homeless consists ofapartments owned by private landlords,with rental assistance provided throughHUD tenant-based housing voucherscalled Shelter Plus Care. Supportiveservices are delivered through one of tenlocal mental health centers, CommunityAction Programs, and other service part-ners across the state. Funding for servic-es comes from HUDÕs SupportiveHousing Program for the homeless, thefederal Community Services BlockGrant, Medicaid and other sources.Because these funds are usually provid-ed for a year at a time, they do not pro-vide long-term stability for involvedagencies and housing managers. Also,much of the service funding created forpeople who are homeless has strict ruleslimiting the time people can continuereceiving services after they are housed.Some formerly homeless people may livein permanent housing for as little as sixmonths before services they need to sta-bilize their lives, such as treatment formental illness, are stripped away, poten-tially launching them back into a cycle ofstreet homelessness.

Chronically homeless families

Since HUD introduced its definition of chronichomelessness, some service providers have sug-

gested that although individuals represent the vastmajority of the chronically homeless, families (thefastest growing segment of the homeless popula-tion) may also experience long term and/or fre-quent homelessness (National Center on FamilyHomelessness, 2007). However, few studies havefocused on the likely costs and benefits of castingthe net of permanent supportive housing wider toinclude homeless families. Compared to singleadults, families are likely to utilize services from aneven wider variety of systems, making a compre-hensive cost study more challenging. For example,homeless children may present unique costs forschool districts, such as transportation from shel-ters outside of the district and increased guidancecounseling.

Despite the administrative challenges of conductingcosts studies pertaining to homeless families, pro-viding the permanent housing and support servicesolutions these families need is no less urgent.Members of families with chronic homelessness mayhave some of the same characteristics and needs assingle adults. The record number of homeless fami-lies seeking emergency shelter combined with evi-dence of the dramatic effect of homelessness on chil-dren illustrates the seriousness of the need amongthis segment of the population:

n Homeless children are sick at twice the rate ofother children.

n Homeless children have twice the rate of learn-ing disabilities and three times the rate of emo-tional and behavioral problems of non-homelesschildren.

n Half of school-age homeless children experienceanxiety, depression, or withdrawal compared to18 percent of non-homeless children (NationalCenter on Family Homelessness, 2007).

VERMONT HOUSING FINANCE AGENCY 5

Costs and Benefits of Addressing ChronicHomelessnessDue to the instability created by their combined home-lessness and disabilities, most chronically homeless peo-ple are heavy users of public resources, such as emer-gency rooms and jails. For this reason, a number ofstates and communities have completed studies com-paring these costs with the costs of providing the chron-ically homeless with permanent supportive housing.

Most of these studies show that not intervening onbehalf of the chronically homeless carries high publicmonetary costs, without improving the long-term stabil-ity of their lives. The publicly funded institutions andfacilities that primarily serve the chroni-cally homeless fall into three categories:primary and mental health careproviders, police departments and jails,and emergency shelters.

Primary andMental Health Care ProvidersPeople who are chronically homelesshave at least one disabling condition thatjeopardizes their health. Those with seri-ous mental illnesses and/or substance usedisorders often have additional signifi-cant medical conditions, including mal-nutrition, diabetes, liver disease, neuro-logical impairments, and pulmonary andheart disease (U.S. Substance Abuse andMental Health Services Administration,2003). Communicable diseases, includingHIV/AIDS, Hepatitis B and C, tuberculo-sis and a wide variety of other infectionsravage the homeless population and canquickly escalate from individual prob-lems to costly and deadly public healthemergencies. Furthermore, trauma result-ing from violence and exposure to the ele-ments is common. In addition to themany health problems that are particularly prevalentamong the homeless, they also have all the same healthproblems as people with homes, but at rates three to sixtimes greater (National Health Care for the HomelessCouncil, 2007).

Characteristics associated withchronic homelessness

n Disabling conditions that almost universallyinvolve serious health conditions, substanceabuse, and psychiatric illnesses.

n The frequent use of the homeless assistance sys-tem and other health and social services whichare costly and limited public resources.

n Frequent disconnection from their communities,including limited support systems, and disen-gagement from traditional treatment systems.

n Multiple problems such as frail elders with com-plex medical conditions or HIV patients withpsychiatric and substance abuse issues.

n Fragmented service systems that are unable to meettheir multiple needs in a comprehensive manner.

Source: Adapted from U.S. Dept. of Health and HumanServices. Ending Chronic Homelessness: Strategies forAction, 2003. http://aspe.hhs.gov/hsp/homelessness/strategies03/

6 THE COSTS AND BENEFITS OF ASSISTING VERMONT’S CHRONICALLY HOMELESS

Without health insurance, a connectionto low-cost preventative health care, or ahome in which to recuperate, some of thechronically homeless ignore health prob-lems and avoid seeking medical treat-ment until problems become urgentmedical emergencies. Ultimately, mostpeople who are homeless do get treated,but it is often treatment of the mostexpensive sort, delivered in hospitalemergency rooms and acute care wards.In addition, people who are homelessserved in hospitals or nursing homesmay require prolonged, more costly,inpatient stays since they have no homein which to complete their recovery.Through taxpayer support of publicinstitutions and through the cost shiftinginherent in the current health insurancesystem, we all pay the high costs ofdeferred care (National Health Care forthe Homeless Council, 2007).

Not surprisingly, many studies haveshown an overall decrease in the cost ofproviding health care to people who arechronically homeless after they enterpermanent supportive housing, due to areduced use of ambulances, emergencyrooms, and inpatient hospitalizations.However, these studies also show thatparticipantsÕ use of non-emergencyhealth care services often increases ini-tially after entering permanent support-ive housing programs because theybecome more connected to the networkof services they need to address theirdisabilities. In this way, the permanentsupportive housing shifts the healthcare services used by participants fromacute, emergency care to proactive, out-patient treatment.

A recent study of 99 people who had along history of homelessness and weredisabled in the Portland, Maine area com-pared the public costs of services duringthe year after they entered permanentsupportive housing to the year before

Homelessness in Vermont: Health CareÒOur Housing First program is having similarresults as permanent supportive housing programsin other parts of the country. We placed in stablehousing units ten chronically homeless people whohad extremely high levels of needs, including bothsevere mental illness and substance abuse. We thencreated the package of wrap-around social servicesthat each client needed. Most have stayed in theirunits, with a substantial drop in their use of emer-gency room and other urgent services.Ó

Ñ Tom Cimock, Homeless Health Care ProgramDirector, Community Health Center of Burlington

Costs of providing emergency medical services inVermont are on the rise, as operating expenses,

gas and oil costs increase faster than inflation. Theaverage cost of an admission to one of VermontÕs 14hospitals was $9,128 in 2007 (VT Dept. of Banking,Insurance, Securities and Health Care, May 2007).

Most Vermont hospitals have seen an increase dur-ing recent years in the relative amount of free carethey provide to Vermonters living in poverty.VermontÕs 14 hospitals provided $18.9 million offree care in 2007. Free care in hospitals is paid forthrough Òcost shift,Ó and absorbed principally bypayers of private health insurance, according to theVermont Department of Banking, Insurance,Securities and Health Care (VT Dept. of Banking,Insurance, Securities and Health Care, Jan. 2007).Several community-based clinics, such as theCommunity Health Center of Burlington, also serveVermontÕs homeless population. In 2006, theCommunity Health Center of Burlington served1,164 homeless adults, adolescents, and children.

VERMONT HOUSING FINANCE AGENCY 7

(when they were homeless). Emergency room useamong this study group decreased by 52% and associat-ed emergency medical costs decreased by 62% after par-ticipants entered permanent supportive housing. Inaddition, ambulance use decreased by 60% and ambu-lance costs decreased by 66%. Furthermore, inpatienthospitalizations decreased by 77% after clients wereplaced in permanent supportive housing. Prescriptiondrug costs among the Portland participants increased by31%, suggesting that they were taking advantage of lessexpensive outpatient treatment (Mondello, Gass,McLaughlin, and Shore, 2007).

Studies in other locations have had similar results.Participants in the Connecticut Supportive HousingDemonstration Program experienced a significantdecrease in the use of acute health services and increas-ing use of less expensive ongoing preventive healthservices such as home health care, outpatient mentalhealth and substance abuse services, medical and den-tal services. For Medicaid eligible tenants whose serviceutilization records were examined during the two yearsprior and three years following entry into permanentsupportive housing, there was a 71% decrease in theaverage Medicaid reimbursement per tenant usingmedical inpatient services (Arthur Andersen LLP,2002). Homeless adults in public hospitals in New YorkCity stayed on average 36 percent longer than other(housed) patients, controlling for differences in demo-graphics and diagnoses (Culhane, Parker, Poppe,Gross, and Sykes, 2007).

In addition to reducing their use of expensive healthcare services, participants show substantial healthimprovements after moving to permanent supportivehousing including mental health and substance abuserecovery, according to existing studies. However, theseimprovements may take several years to occur.According to HUDÕs recent report on the early resultsfrom three recently initiated permanent supportivehousing programs, Òsubstantial progress toward recov-ery and self-sufficiency often takes years and is not a lin-ear process, rather itÕs a series of ups and downs.Ó (U.S.Dept. of Housing and Urban Development, July 2007).

Police Departments and JailsSome people with chronic homelessness frequentlyfind themselves in handcuffs or jail, especially if theirmental illness or addictions prompt disruptive or vio-

Homeless adults in public hospitals inNew York City stayed on average 36percent longer than other(housed) patients

8 THE COSTS AND BENEFITS OF ASSISTING VERMONT’S CHRONICALLY HOMELESS

lent behavior. A number of studieshave found that the public costs topolice departments and jails are sig-nificantly higher for people who arechronically homeless than for thosewho have entered permanent sup-portive housing.

Police had 68% fewer contacts withformerly homeless individuals afterthey moved into permanent support-ive housing in the Portland, Mainearea. In addition, there was a 62%reduction in the number of days spentin jail and in the cost of incarcerationafter entering permanent housing(Mondello, Gass, McLaughlin, andShore, 2007). Similar improvementsoccurred for dually diagnosed chroni-cally homeless adults in Portland,Oregon. Enrollment in the CommunityEngagement program resulted in a75% decline both in the number of jailstays and in the estimated cost ofincarceration for program participants(Moore, 2006).

Emergency Shelters Permanent supportive housingappears to be highly successful in end-ing the cycle of homelessness. Mostparticipants stay in their units andavoid returning to emergency shelters.ParticipantsÕ shelter use in Portland,Maine plummeted 98% during theyear after they moved to permanentsupportive housing. Of those who diduse a shelter after starting the perma-nent supportive housing program,most used a partner shelter expresslyfor people with substance abuse prob-lems during their transition to moreindependent living (Mondello, Gass,McLaughlin, and Shore, 2007).

Other studies found that 75% to 88% ofpermanent supportive housing partic-ipants remained in their units duringthe first 1 to 5 years after initial place-

Homelessness in Vermont: CorrectionsSome of VermontÕs chronically homeless cyclebetween jails and homelessness, while the jail costsalone quickly mount. Scott is a homeless Vermonterwith alcoholism who lives just such a life. ÒWhen Ireviewed his records, I realized how many times Scottwas picked up and released. For example, this hap-pened 19 times during March 2007. This means that ina single month, Scott went through intake procedures(including being searched and showered) 19 times. Healso received 19 medical screenings and 19 mentalhealth / substance abuse screenings, was held for 24hours of observation 19 times, and went throughrelease procedures 19 times, all in a single month.ScottÕs crimes are petty and non-violent. During thismonth, 18 of his jail stays were due entirely to inca-pacitation. The 19th time was an arrest for unlawfultrespassing into a garage for shelter. Ó

Ñ John Perry, Vermont Department of Corrections

T he average annual cost of incarceration in Vermonthas grown steadily during the decade to the cur-

rent level of $46,000, or $126 per day (VT Dept. ofCorrections, 2007). Using the example described above,ScottÕs jail time alone cost nearly $2,400 in a singlemonth. According to the Vermont Department ofCorrections, there are a number of reasons for the esca-lating incarceration price tag, including the lack of sup-portive housing for offenders re-entering the communi-ty. A significant number (179) of the current inmates inVermont are being held past their minimum releasedates, primarily due to lack of housing. It is notuncommon for offenders who are released to return toprison because they fail to make rent payments, violat-ing their release conditions. Other inmates are consid-ered Òhard-to-houseÓ and need services at the ready tohelp them make rent payments, for crisis intervention,and to provide referrals for other services. Althoughseveral housing retention specialists currently providethese services, more case management is needed tofully serve these re-entering individuals, according tothe Department of Corrections (VT Dept. ofCorrections, 2007).

VERMONT HOUSING FINANCE AGENCY 9

ment. After five years, a permanentsupportive housing program in NewYork City had an 88 percent housingretention rate compared to 47 percentfor programs in which participantslived in congregate, residential treat-ment settings, such as group homes(Tsemberis and Eisenberg, 2000). Apermanent supportive housing pro-gram that started in San Francisco in1988 reported recently that 67% of theprogramÕs original residents are still intheir original units (Trotz, 2005).ConnecticutÕs evaluation in 2002 ofnine PSH projects found that 61% ofthe participants remained in their orig-inal units after four and a half yearsand another 25% moved successfully toother permanent housing (ArthurAndersen LLP, 2002).

Barriers to Creating MorePermanent SupportiveHousingDespite direct benefits for the chroni-cally homeless and their communi-ties, creating permanent supportivehousing challenges the ways in whichsystems with different fundingstreams, philosophies, and missionstypically operate. For example, creat-ing permanent supportive housingtypically involves combining tradi-tional affordable housing develop-ment with supportive service pro-grams that have different timetablesand linkages. Housing developersoften take out 30-year mortgages andmake long-term legal commitments toprovide affordable housing inexchange for public resources or taxcredits needed to fund housing con-struction. For a new supportive hous-ing project, housing funders want toensure that necessary services will bein place for the long run, to ensureboth tenants and the housing devel-oper success in their endeavors.

Homelessness in Vermont: SheltersÒI am deeply troubled when we have to turnsomeone away because we are full. Although wework with folks to find other alternatives, it ismorally wrong to have to turn anyone awaybecause we are full."

Ñ Linda Ryan, Executive Director, Samaritan House,St. Albans, Vermont

W hen people enter permanent supportivehousing, they free up much needed emer-

gency shelter space. Vermont shelters housedabout 40 percent of the Vermonters who werehomeless during an average night in 2007 (VTContinuums of Care, 2007). Others resorted tosleeping in cars, doubling up with friends or fami-ly, or seeking other types of refuge. Emergencyshelters are targeted to people with unanticipated,temporary shelter needs. Beds taken by peoplewith chronic homelessness create a shortage thathas dire consequences when people who findthemselves temporarily homeless are turned away.Although shelter directors report an increasingnumber of homeless Vermonters since 2000, thenumber of people the stateÕs shelters are able toserve has decreased because the average client isstaying longer (VT Office of EconomicOpportunity). Almost all Vermont shelters havewaiting lists on a regular basis.

The costs of running emergency shelters vary wide-ly, depending on their location, the level of servicesthey offer, and the extent to which donated facili-ties, materials, and volunteer staff offset regularoperating costs. At Committee on TemporaryShelter family and adult shelters in Burlington, thecost of each stay averaged approximately $939 foreach single adult and about $6,946 per family in2007. At the Upper Valley Haven family shelter inWhite River Junction, the cost of each stay aver-aged approximately $2,700 per person.

10 THE COSTS AND BENEFITS OF ASSISTING VERMONT’S CHRONICALLY HOMELESS

Unfortunately, traditional supportive service funding comesthrough 1-year state or federal government commitments. Therefore,the long-range commitment that housing funders look for is oftenimpossible. Additionally, service funding is designed to follow aperson with a specific diagnosis or level of need, and is rarely tied toa building or housing development. Consequently, if a person withservices available to him/her moves out, funding for services mayleave with them, creating uncertainty for the next tenant and for theproperty manager or landlord.

An added challenge is that each system (housing and services) hasdifferent public expenditure timing. A substantial portion of thepublic dollars spent on a permanent supportive housing residentmay occur at once Ñ when the housing is acquired, built, or renovat-ed. Conversely, public expenditures for someone who is homelessare likely to be spread out as the person cycles in and out of emer-gency health care and corrections systems. Their extremely lowincomes present further challenges for moving chronically homelesspeople to permanent supportive housing. People who are chronical-ly homeless often qualify for federal disability benefits, orSupplemental Security Income (SSI). In Vermont, this means anincome of only $689 per person per month, as of 2008 (U.S. SocialSecurity Administration, 2008). The rent for a 1-bedroom apartmentat HUDÕs fair market rate of $682 would consume virtually all of aVermonterÕs monthly SSI check.5 In addition, coordinating theexpectations of private landlords and property managers with thebehavior of people with significant disabilities and a history ofchronic homelessness may be challenging. Landlords may wantmore involvement from service providers than they are willing orable to commit to a particular tenant.

ConclusionsFor about the same level of investment, permanent supportive housingaddresses the dual needs of the chronically homeless for both housingand services with far superior outcomes to the traditional system ofpiecemeal emergency interventions. The monetary investment neededto provide a more stable life for people who are chronically homelessis less or not much more than these individuals are already costingthrough emergency interventions, according to most existing studies.6Furthermore, the quality of life for individuals provided with stable

5 Fair Market Rents (FMRs) are rent estimates calculated annually by the U.S. Dept. of Housing and UrbanDevelopment. FMRs are 40th percentile rents, the dollar amount below which 40 percent of standard qualityrental housing units rent, including the cost of utilities. The statewide average FMR is an average of each coun-ty’s FMR weighted by the county’s renter population.

6 These studies include Mondello, Gass, McLaughlin, and Shore, 2007; Moore, 2006; Culhane, Metraux, andHadley, 2002; and Culhane, Parker, Poppe, Gross, and Sykes, 2006 — a literature review of the many studiesreviewed during the 2007 National Symposium on Homelessness Research.

Permanent supportivehousing addresses the

dual needs of thechronically homeless for

both housing and serviceswith far superior outcomes

to the traditional systemof piecemeal emergency

interventions

VERMONT HOUSING FINANCE AGENCY 11

housing sky rockets when compared to the despair and constraintsintrinsic in life in shelters or on the streets.

Vermont has an opportunity to eliminate chronic homelessness bycapitalizing on evidence from other locations and setting its ownstage for action. Existing studies document the potential benefits ofserving our chronically homeless individuals through permanentsupportive housing rather than through emergency interventions. Inaddition, policy makers and practitioners have the benefit of the les-sons learned by many states and communities who have alreadyforged the administrative and funding partnerships required for per-manent supportive housing.

Creating more permanent supportive housing will undoubtedlyinvolve an in-depth plan identifying the funding and partnerships thatwill work for VermontÕs unique housing and service delivery systems.Shifting VermontÕs system of caring for the chronically homeless awayfrom emergency services and toward permanent, supportive housingwill require initial capital investments from government agencies andprivate partners. This investment will be recouped through reductionin the costs of emergency services, mostly in mental and primaryhealth care costs, and the longer term individual and community ben-efits of reduced homelessness. More creative approaches will also beneeded to link long-term commitments of affordable housing fundingwith adequate supportive services.

Further research could help clarify the specific costs and benefits ofaddressing chronic homelessness that would be likely here in Vermont,particularly for an expanded target population such as individuals andfamilies. This research might examine the experiences of the residentsof the stateÕs current permanent supportive housing units, perhapsassessing the longer term costs, benefits, and outcomes of their tenurein the program.

By taking steps to improve the supply of permanent supportive hous-ing for Vermonters with chronic homelessness, policy makers moveVermont closer to the goal of ensuring that everyone, including thosewith the most complex needs, has access to housing. In addition tothe individual benefits of stable housing, Vermont communities bene-fit from reduced homelessness by knowing that the needs of its disad-vantaged, vulnerable, seriously ill members are being addressed.

Vermont has anopportunity toeliminate chronichomelessness bycapitalizing onevidence from otherlocations and settingits own stage for action

Bibliography

Arthur Andersen LLP. 2002. ConnecticutSupportive Housing Demonstration Program:Program Evaluation Report. http://www.csh.org/index.cfm?fuseaction=Page.viewPage&pageID=3244.

Caton, Wilkins, and Anderson. 2007. PeopleWho Experience Long-Term Homelessness:Characteristics and Intervention. Washington,DC : Prepared for the 2007 NationalSymposium on Homelessness Research.http://aspe.hhs.gov/hsp/homelessness/symposium07/caton/index.htm.

Culhane, Metraux, and Hadley. 2002. PublicService Reductions Associated withPlacement of Homeless Persons with SevereMental Illness in Supportive Housing.Housing Policy Debate. Vol. 13, 1.http://www.csh.org/document/docWindow.cfm?fuseaction=document.viewDocument&documentid=254&documentFormatId=520.

Culhane, Parker, Poppe, Gross, and Sykes.2007. Accountability, Cost-Effectiveness, andProgram Performance: Progress Since 1998.Washington, DC : 2007 National Symposiumon Homelessness Research. http://aspe.hhs.gov/hsp/homelessness/symposium07/.

Houghton, T. 2001. The New York/New YorkAgreement Cost Study: The Impact of SupportiveHousing on Services Use for Homeless MentallyIll Individuals. Corporation for SupportiveHousing. Summary of full report on NY/NYinitiative by Culhane, Metraux, and Hadley.http://www.csh.org/html/NYNYSummary.pdf.

Mondello, Gass, McLaughlin, and Shore.2007. Costs of Homelessness: Cost Analysis ofPermanent Suportive Housing: State of Maine,Greater Portland. http://www.mainehousing.org/Documents/HousingReports/CostOfHomelessness.pdf.

Moore, Thomas L. 2006. Estimated CostSavings Following Enrollment in theCommunity Engagement Program. Portland,Oregon. http://www.centralcityconcern.org/CEP%20COST-BENEFIT%20PILOT%20STUDY%20REPORT%20061506e.pdf.

National Center on Family Homelessness.2007. Homeless Children: AmericaÕs NewOutcast. http://www.familyhomelessness.org/pdf/fact_outcasts.pdf.

National Health Care for the HomelessCouncil. 2007. The Basics of Homelessness.http://www.nhchc.org/Publications/basics_of_homelessness.html.

The Lewin Group. 2004. Costs of ServingHomeless Individuals in Nine Cities.Partnership to End Long-TermHomelessness. http://documents.csh.org/documents/ ke/csh_lewin2004.PDF.

Trotz, Marc. 2005. Direct Access to Housing:San Francisco Department of Health.http://www.endhomelessness.org/content/article/detail/1116.

Tsemberis and Eisenberg. 2000. Pathways tohousing: supported housing for street-dwelling homeless individuals with psychi-atric disabilities. Psychiatric Services. Vol. 51,4, p. 487. http://pathwaystohousing.com/Articles/ PTHPublications/tsemberiseisenberg2000_1_.pdf.

University of Massachusetts-Boston. 2007.Homelessness in New England: Results from theWinter 2006/07 Point-in-Time Counts.http://www.helpingtohouse.org/documents/resources/25_NERHMISSummary.pdf

U.S. Dept. of Housing and UrbanDevelopment. July 2007. Applicability ofHousing First Models to Homeless Persons withSerious Mental Illness. p. 104.http://www.huduser.org/publications/homeless/hsgfirst.html.

U.S. Dept. of Housing and UrbanDevelopment. Sept. 2007. Defining ChronicHomelessness. http://www.hudhre.info/documents/ DefiningChronicHomeless.pdf.

U.S. Social Security Administration. 2008.Supplemental Security Income (SSI) in Vermont.www.ssa.gov/pubs/11128.html.

U.S. Substance Abuse and Mental HealthServices Administration. 2003. Blueprint forChange: Ending Chronic Homelessness forPersons with Serious Mental Illnesses and Co-Occurring Substance Use Disorders.http://download.ncadi.samhsa.gov/ken/pdf/SMA04-3870/SMA04-3870.pdf.

U.S. Substance Abuse and Mental HealthServices Administration. March/April 2005.SAMSHA News. http://www.samhsa.gov/SAMHSA_NEWS/VolumeXIII_2/index.htm.

VT Continuums of Care. 2007. Continuum ofCare Applications for Chittenden County andBalance of State.

VT Dept. of Banking, Insurance, Securitiesand Health Care. Jan. 2007. VT CommunityHospitals Uncompensated Care Policies.http://www.bishca.state.vt.us/HcaDiv/Data_Reports/legislative_reports/UncompCarePolicies_jan07.pdf.

VT Dept. of Banking, Insurance, Securitiesand Health Care. May 2007. VermontCommunity Hospitals Financial and StatisticalTrends. http://www.bishca.state.vt.us/HcaDiv/Data_Reports/hospdata/hospdata_financial-statistical_index.htm.

VT Dept. of Corrections. 2007. Plan toReduce Correctional Costs and Achieve Savingsfor Reinvestment. p. 67. http://www.doc.state.vt.us/news-info/news-files/plan-1.

VT Office of Economic Opportunity.Emergency Shelter Grant Program statistics,2000-2007.

Writing Leslie Black-PlumeauVermont Housing Finance AgencyMaura CollinsVermont Housing Finance Agency

Editing Polly NicholVermont Housing & Conservation BoardCynthia ReidVermont Housing Finance AgencyGustave SeeligVermont Housing & Conservation BoardBrian SmithVermont Agency of Human ServicesCathy VoyerVermont Agency of Human Services

Review The Carsey InstituteUniversity of New Hampshire

Design Craig BaileyVermont Housing Finance Agency

© 2008 Vermont Housing Finance Agency164 Saint Paul St., P.O. Box 408Burlington Vt. 05402-0408(802) 864-5743, (802) 864-8081 (fax)home@vhfa.org, www.vhfa.org