The impact of homelessness prevention programs on homelessness
It is demonstrated that the volatile nature of funding availability leads to good-as-random variation in the allocation of resources to individuals seeking assistance, and temporary financial assistance can be used successfully to prevent homelessness, is affordable, and helps individuals and families.
Abstract
Programs that buffer a financial shock work For people without a safety net of social and financial resources, a shock, such as medical expenses not covered by insurance, can be the first step in a downward spiral toward homelessness and morbidity. Evans et al. evaluate the effectiveness and cost of a program in Chicago that provides temporary financial assistance with the aim of enabling individuals to stay in their homes and out of homeless shelters. They find that one-time payments of up to $1500 greatly reduce the likelihood of homelessness. The estimated economic benefits exceed the estimated costs, with immeasurable psychic and physical benefits. Science, this issue p. 694 Temporary financial assistance can be used successfully to prevent homelessness, is affordable, and helps individuals and families. Despite the prevalence of temporary financial assistance programs for those facing imminent homelessness, there is little evidence of their impact. Using data from Chicago from 2010 to 2012 (n = 4448), we demonstrate that the volatile nature of funding availability leads to good-as-random variation in the allocation of resources to individuals seeking assistance. To estimate impacts, we compare families that call when funds are available with those who call when they are not. We find that those calling when funding is available are 76% less likely to enter a homeless shelter. The per-person cost of averting homelessness through financial assistance is estimated as $10,300 and would be much less with better targeting of benefits to lower-income callers. The estimated benefits, not including many health benefits, exceed $20,000.