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June 30, 2010 / sadhbhanu

The High Price of Homelessness

See original article in the Guardian

I ran into a woman recently called Carmen Velez outside the Office for Prevention Assistance and Temporary Housing (Path) in the Bronx. She was dragging a shopping cart stuffed with pillows and other bedding and a wheely suitcase filled with personal effects.

Carmen, 60, who is disabled, had been evicted from her apartment the day before after losing her section eight subsidised housing voucher. She had checked into a homeless shelter the previous night but had to wait until 3am before she was awarded a bed. As she walked into the Path office, she asked me to pray that they would give her a bed for that night.

I didn’t want to tell her that I had already spoken to two women who had emerged from the same office having been denied a similar request.

One of those refused was Yadira Mendoza, 28, who was told she might have a better chance if she called Safe Horizons, which caters to domestic abuse victims. Yadira, who has an 11-year-old daughter, has been homeless since she lost her job two years ago. Both she and her daughter are currently seeing a therapist courtesy of Medicaid.

If you hang around any similar facility anywhere in the country you will encounter numerous people in similar and worse situations. The main reason being that there are simply not enough affordable housing units for low income or unemployed people, which is putting extraordinary pressure on the emergency shelter system.

According to the National Low Income Housing Coalition, before the recession there was a shortage of 2.8m affordable housing units. As family homelessness has been increasing steadily for the past two years, that figure has now grown to 3.1m. The irony is that numerous studies show that providing housing to homeless people is far cheaper than maintaining them in the shelter system.

The federal government is well aware of this problem. A report released in March of this year by department of housing and urban development (Hud) concluded that “the costs associated with providing housing for individuals and families who are homeless within a programme exceeds the Fair Market Rent cost of providing rental assistance without supportive services.”

A report by the Centre for Budget Policy and Priorities came to a similar conclusion: “Rental assistance is key to reducing homelessness among families with children” and “housing vouchers (like section eight) are a particularly effective form of rental assistance because they are flexible and cost-effective.”

Why then, when all arrows point in the this direction, and when the Obama administration provided $1.5bn in the stimulus package for homeless prevention and rapid rehousing, are states and cities nationwide cutting funding for these very programmes?

The popular section eight programme has run into funding difficulties across the country with several major cities, most notably New York and Los Angeles, boldly announcing on their respective state websites that section eight programmes are closed. Several states, including New Jersey, Rhode Island, Florida and Georgia are cutting funding for affordable housing programmes.

These kinds of cuts make for nice balanced budgets in the short term. But when you consider that study after study has shown that the longer people remain homeless the more they cost the state, (See Gladwell’s Million Dollar Murray) it’s a bit like trying to save money by cutting off your cable service and going to the cinema every night instead.

There’s also the persistent argument that the poor just need to work harder and pay their own way. But a recent report by the NLIHC found that an individual working full-time at minimum wage cannot afford the average cost of a one-bedroom apartment in any state in the US (pdf).

Another woman I met outside the Path centre was 29-year-old Nicola Douglas. She works at the Family Dollar Store where she earns $9.50 an hour. Nicola is living in a homeless shelter with her daughters aged two and four because she couldn’t keep up the payments of $1,200 a month on her one-bedroom apartment. She is trying to get into the work advantage programme which provides rental assistance but has been turned down three times this month already. She told me she will keep coming back until they accept her because staying in the shelter with her kids is “not an option”.

Ironically it costs the city about $38,000 a year to keep a family like Nicola’s in a shelter. That’s almost three times what it would have cost to pick up her rent tab.

Whether your heart bleeds or not for the plight of Nicola or Yadira or Carmen or any of the estimated 3.5 million Americans who experience homelessness each year (pdf), know that if the situation is not appropriately addressed, our states’ coffers will continue hemorrhaging.

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