Insights

The case for last resort housing: Providing housing for homeless is cheaper and better for society

Posted March 16, 2017

SGS Economics and Planning The case for investing in last resort housing2

It’s cheaper to provide last resort housing to homeless people than to leave them sleeping rough, a new SGS Economics and Planning cost-benefit analysis has found.

The University of Melbourne’s Sustainable Society Institute homelessness study The Case for Investing in Last-Resort Housing found that 75 per cent of economic benefits of providing emergency accommodation would flow back to the community.

The cost-benefit analysis led by SGS Prinicpal and Partner Ellen Witte found that for every $1 invested in last-resort beds to address the homelessness crisis, $2.70-worth of benefits are generated for the community over 20 years. Which means providing one person with a last-resort bed would generate a net benefit of $216,000 over 20 years. That averages to a net benefit of $10,800 per year.

Ellen Witte said cost-benefit analysis found governments and society benefit more than they spend by providing last-resort housing to homeless individuals. The savings are mainly through reduced healthcare costs, reduced crime, and people getting back into employment or education.

SGS Economics and Planning Ellen Witte

There is much to gain in economic and social terms, both for government and society, by assisting the homeless. If you provide people with a roof over their head, we see savings in demand for health care especially emergency department admissions; reduced crime rate – people who are homeless especially sleeping rough are more involved in crime as both victims and perpetrators - and importantly also improved human capital. So people are better able, once they have a roof over their head, to re-engage with the workforce and education and contribute to society.

— SGS Principal and Parnter Ellen Witte

Key points

Key points in the report include:

  • The number of people sleeping rough in Melbourne’s streets has increased by over 70 per cent in the last two years.
  • There has been a reduction in the supply of last-resort housing which refers to legal rooming and boarding houses, and emergency accommodation.
  • On average, more than 40 requests for last-resort housing are turned down across Victoria every day.
  • The analysis shows that the government providing one last-resort bed will generate a net benefit of $216,000 over 20 years. That averages to a net benefit of $10,800 per year.
  • For every $1 invested in last resort beds, $2.70 worth of benefits are generated for the community (over 20 years).
  • The report calls for governments to build more new, permanent last-resort housing to help the homeless.
SGS Economics Planning Ellen Witte
For further information contact:

Ellen Witte

Principal & Partner

View profile →
SGS Economics Planning Marcus Spiller
For further information contact:

Marcus Spiller

Principal & Partner

View profile →
SGS Economics Planning Pat Fensham
For further information contact:

Patrick Fensham

National Leader for Urban Policy & Governance | Principal & Partner

View profile →
SGS Economics Planning Andrea Ingham
For further information contact:

Andrea Ingham

Consultant

View profile →