Temporary Financial Assistance Programs Can Curb Homelessness

Temporary financial assistance programs have been a common strategy to avert homelessness, but there had been little evidence to determine their efficacy. Data compiled from the Homeless Prevention Call Center and the Homeless Management Information System in Chicago were examined to test the impact of these programs on homelessness. The sample of 4,448 calls included first-time callers seeking assistance with rent or security deposits between January 20, 2010 and December 4, 2012. To measure the impact of financial assistance, homeless shelter entry rates for callers who could receive assistance because of funding availability (58.2 percent) were compared with rates for those who called when there was no funding accessible.

Key findings:

• Eligible callers seeking rent assistance are 76 percent less likely to enter a shelter within six months if funding is available.
• By combining the cost of financial assistance and the operating costs of the call center and the agencies that distribute assistance, the researchers estimate that the financial assistance program costs approximately $10,300 per spell of homelessness averted, or $720 per caller overall.
• If the programs were targeted to those at highest risk of homelessness, the cost per averted homeless spell could drop 35 percent ($6,800).
• By way of comparison, the researchers estimate that the intervention avoids more than $20,000 in costs associated with homelessness, including costs to the shelter system, health care, criminal justice, and other welfare programs and the imputed value of reduced mortality risk.
• The research did not explore the extent to which expanding temporary financial assistance programs would lead to an increased demand for assistance.