Economic Roundtable Estimating the Scope of Services and Cost to End Homelessness Prepared for Bring LA Home!

Economic Roundtable 2 Questions to Answer in Estimating Cost  How many people are homeless?  How big is the current homeless population?  How many additional people become homeless each year?  How many people escape homelessness each year?  How many households are comprised by the homeless population?  What services are needed?  How many people are in each needs-related category?  What is the distribution of service needs within each category?  How much does each type of service cost?  How much spendable resources do homeless people have?  How many are enrolled in each public benefits program?  What level of benefits is provided by each program?  How many are employed?  What is the earnings distribution among employed individuals?  How are housing needs met?  What is the distribution of housing needs by size of housing unit?  How much does each size of unit cost?  How much of their spendable resources do households use for housing?  What subsidies are required after households pay what they are able for housing?  How long are subsidies provided?  How many people are homeless?  How big is the current homeless population?  How many additional people become homeless each year?  How many people escape homelessness each year?  How many households are comprised by the homeless population?  What services are needed?  How many people are in each needs-related category?  What is the distribution of service needs within each category?  How much does each type of service cost?  How much spendable resources do homeless people have?  How many are enrolled in each public benefits program?  What level of benefits is provided by each program?  How many are employed?  What is the earnings distribution among employed individuals?  How are housing needs met?  What is the distribution of housing needs by size of housing unit?  How much does each size of unit cost?  How much of their spendable resources do households use for housing?  What subsidies are required after households pay what they are able for housing?  How long are subsidies provided?

Economic Roundtable Population Size

Economic Roundtable 4 Homeless Population Estimate Estimated point-in-time population: 33,900 family members 44,700 single individuals Estimated annual population: 119,100 family members 135,000 single individuals The size of the homeless population is affected by: The length of time for which individuals are homeless The number of people who have repeat stints of homelessness. Estimated point-in-time population: 33,900 family members 44,700 single individuals Estimated annual population: 119,100 family members 135,000 single individuals The size of the homeless population is affected by: The length of time for which individuals are homeless The number of people who have repeat stints of homelessness.

Economic Roundtable 5 Source Information for Estimating the Size of Major Categories of Homeless Residents LAHSA’s estimates of the breakout of the homeless population in combination with Economic Roundtable estimates produce a detailed point-in-time estimate of homeless subpopulations. This data is then used to produce an annual estimate of the size of the population categories used for producing cost estimates. LAHSA’s estimates of the breakout of the homeless population in combination with Economic Roundtable estimates produce a detailed point-in-time estimate of homeless subpopulations. This data is then used to produce an annual estimate of the size of the population categories used for producing cost estimates.

Economic Roundtable 6 Estimating Population by Major Category The Number of New Entrants into Homelessness Sets the Size of All Groups

Economic Roundtable 7 Population Summary Annual population size is estimated for 9 categories of homeless residents, each with it’s own profile of service needs and costs: Single men and women homeless 1-6 months Single men and women homeless 7-11 months Single men and women homeless 12+ months Family Members homeless 1-6 months Family Members homeless 7-11 months Family Members homeless 12+ months Unaccompanied Youth thru 24 years of age Seriously mentally ill, dual- multi-Diagnosed HIV+/AIDS The number of individuals and households is estimated for each category. The percent of the population accounted for by each category is assumed to remain the same regardless of population size. The size of the homeless population is driven by the number of new entrants into homelessness each year. Annual population size is estimated for 9 categories of homeless residents, each with it’s own profile of service needs and costs: Single men and women homeless 1-6 months Single men and women homeless 7-11 months Single men and women homeless 12+ months Family Members homeless 1-6 months Family Members homeless 7-11 months Family Members homeless 12+ months Unaccompanied Youth thru 24 years of age Seriously mentally ill, dual- multi-Diagnosed HIV+/AIDS The number of individuals and households is estimated for each category. The percent of the population accounted for by each category is assumed to remain the same regardless of population size. The size of the homeless population is driven by the number of new entrants into homelessness each year.

Economic Roundtable Service Needs and Costs

Economic Roundtable 9 Service Needs except Employment and Housing The percent of each population category needing each service is estimated. Service providers were polled. Estimates are on the low side. The model allows manipulation of these estimates. The same estimates were used in all four scenarios. The percent of each population category needing each service is estimated. Service providers were polled. Estimates are on the low side. The model allows manipulation of these estimates. The same estimates were used in all four scenarios.

Economic Roundtable 10 Three Factors Determine the Cost Differences in Scenarios 1-3 Differences in Housing Cost Contributions Reduce Costs in Scenario 4 In Scenario 4, as in the other 3 scenarios, individuals begin by contributing 40% of their spendable income to pay housing costs. This amount increases by 5 percentage points each year for single adults with $7,000 to $11,999 and families with $10,000 to $15,999 in earnings.

Economic Roundtable 11 Take-up and Cost of Services Most frequently needed services: Outreach, access centers 75% Shelter and linked services 50% Nonresidential support services 50% Job training/ placement 33%- 43% Most expensive services: Supportive housing $ ,700 Subsidized housing $5 – 7,700 Substance abuse treatment $5,200 Assisted housing entry $5,000 Most frequently needed services: Outreach, access centers 75% Shelter and linked services 50% Nonresidential support services 50% Job training/ placement 33%- 43% Most expensive services: Supportive housing $ ,700 Subsidized housing $5 – 7,700 Substance abuse treatment $5,200 Assisted housing entry $5,000

Economic Roundtable 12 Employment Rate and Earnings Distribution for Each Population Category are Based on Estimates for How Employment and Earnings for Category Differ from the Overall Homeless Population

Economic Roundtable 13 The Number of People in Each Category in the Labor Force Varies with the Scenario, But the Percent Distribution of Earnings Outcomes Remains Constant in all Four Scenarios “High” earners: Short-term 50% more likely than mid-term Mid-term 50% more likely than long-term Non-earners: Long-term 50% more likely than mid-term Mid-term 50% more likely than short-term “High” earners: Short-term 50% more likely than mid-term Mid-term 50% more likely than long-term Non-earners: Long-term 50% more likely than mid-term Mid-term 50% more likely than short-term

Economic Roundtable For estimates of welfare benefits and total income see Tables of the Population Services Matrix

Economic Roundtable 15 Services, Costs and Income Summary In all 4 scenarios the following thing remain the same: The percent of the overall population in each category The percent of each population category needing each service The cost of each service The distribution of earnings within each population category The following things changed in different scenarios: The size of the homeless population The number of people who are employed and have earnings The number of people who receive public benefits The amount of spendable resources that people contribute to housing In all 4 scenarios the following thing remain the same: The percent of the overall population in each category The percent of each population category needing each service The cost of each service The distribution of earnings within each population category The following things changed in different scenarios: The size of the homeless population The number of people who are employed and have earnings The number of people who receive public benefits The amount of spendable resources that people contribute to housing

Economic Roundtable Population-Services-Cost Matrix

Economic Roundtable 17 Estimated Level of Services Needed and Used by Subgroups of Homeless Residents in Cautious Scenario

Economic Roundtable 18

Economic Roundtable 19

Economic Roundtable 20

Economic Roundtable 21

Economic Roundtable 22 Annual Cost to Subsidize Housing for Different Size Households with Different Levels of Income Subsidy levels in each housing category are similar in all four scenarios

Economic Roundtable 23 Number of People Needing Different Levels of Housing Subsidy in the Four Scenarios The four scenarios produce vastly different profiles of housing need. In the cautious scenario many more people are in subsidized housing, including very expensive supportive housing. In the optimistic scenario many more people are in market rate housing and many fewer in supportive housing. As increasing numbers of homeless people are housed, these different profiles result in multi-billion dollar differences in costs. The four scenarios produce vastly different profiles of housing need. In the cautious scenario many more people are in subsidized housing, including very expensive supportive housing. In the optimistic scenario many more people are in market rate housing and many fewer in supportive housing. As increasing numbers of homeless people are housed, these different profiles result in multi-billion dollar differences in costs.

Economic Roundtable 24 Summary  More effective efforts to help homeless residents re-enter the labor force and obtain public benefits will reduce costs by an estimated16 percent (cautious to semi-optimistic scenario).  Reducing the flow of people being cared for by major social institutions into homelessness will reduce costs by an estimated 47 percent (semi-optimistic to optimistic scenario).  Providing housing is by far the greatest cost in ending homelessness – accounting for two-thirds to three-quarters of total costs.  Requiring households with modest but still significant spendable resources (single adults with $7,000 to $11,999 and families with $10,000 to $15,999) to increase their contribution to rent costs by 5 percent each year will reduce costs by an estimated 37 percent (optimistic to modified-optimistic scenario).  The lowest cost scenario (modified optimistic) is estimated to cost roughly double what is currently being spent on homelessness.  More effective efforts to help homeless residents re-enter the labor force and obtain public benefits will reduce costs by an estimated16 percent (cautious to semi-optimistic scenario).  Reducing the flow of people being cared for by major social institutions into homelessness will reduce costs by an estimated 47 percent (semi-optimistic to optimistic scenario).  Providing housing is by far the greatest cost in ending homelessness – accounting for two-thirds to three-quarters of total costs.  Requiring households with modest but still significant spendable resources (single adults with $7,000 to $11,999 and families with $10,000 to $15,999) to increase their contribution to rent costs by 5 percent each year will reduce costs by an estimated 37 percent (optimistic to modified-optimistic scenario).  The lowest cost scenario (modified optimistic) is estimated to cost roughly double what is currently being spent on homelessness.