Studying the Costs of Homelessness Midstream Lessons from a National Cost Study

1. Studying the Costs of HomelessnessMidstream Lessons from a National Cost Study Jill Khadduri National Alliance to End Homelessness Annual Conference, July 2007

2. Why Study Costs? Several Possible Purposes • Show costs of homelessness to mainstream systems • Net cost (or savings) from ending homelessness • Potential for cost offsets to particular systems • Show societal costs of homelessness • Economic loss to businesses, neighborhoods • Economic loss from loss of earnings potential • Compare efficiency of different programs (or approaches) to serving similar homeless people • Compare costs of a program (or approach) to its outcomes: cost/effectiveness study NAEH Conference, July 2007

3. Need to decide (based on purpose of study) • Costs to whom? • A single funder? • Multiple funders? • Homeless people themselves? • Relatives, friends, neighbors? • Costs of what? • A single program? • An “approach”: multiple programs that operate at the same time or sequentially? NAEH Conference, July 2007

4. Abt Study of Costs of Homelessness for HUD • Purposes • Compare costs of different approaches to serving homeless people (individuals and families) • Measure costs to mainstream systems before, during, and after homelessness • Not a cost effectiveness study—not measuring outcomes • Not a study of societal economic costs of homelessness • Is developing methods that can be used in studies with a variety of purposes NAEH Conference, July 2007

5. Abt Study Measures Costs of Approaches, Not Individual Programs • Uses HMIS data to find “pathways” clients take through the homeless services system and to count their units of service • Measures costs of all programs for homeless people used during the pathway by multiplying units of service (from HMIS) by unit costs (from program budgets) • Requires a well-populated HMIS for the study period • Most HMIS cannot do this for 2004 or 2005 • But HMIS are building fast NAEH Conference, July 2007

6. Example for a Particular Client Central Intake for Singles = $1/intake Emergency Shelter for Singles = $2/night Transitional Housing for Singles = $3/night PSH for Singles = $4/night Central Intake 1 intake $1 Emergency 30 nights 30 x $2 = $60 Transitional 90 nights 90 x $3 = $180 Total client costs $241 = + + NAEH Conference, July 2007

7. Pathway for Each Client is based on a Typology of Programs • Typology is needed • So can infer costs of other, similar programs from costs of programs for which data collection is possible • So can describe the pathway in way that makes sense to policy audience • Goes beyond emergency, transitional, permanent supportive:—e.g., separate categories for scattered-site, shared rooms, private apartments and/or different intensity of services • Each typology is tailored to the homeless services system in the study community NAEH Conference, July 2007

8. Unit Costs of Homeless Programs • For residential programs, unit costs include: • Costs of operating the housing or shelter • Cost of acquiring/developing the housing or shelter • Costs of services provided by the program • Overhead or administrative costs • For residential programs, the unit of service is a bed night or unit night • For services only programs, unit costs vary by type of program: e.g., cost per day, cost per service encounter NAEH Conference, July 2007

9. Cost Collection Instruments for Homeless Programs • Interviews for information needed to understand costs: which clients? what services? what partnerships? what type of housing? • Cost collection spreadsheets to record information from program financial statements and ensure all costs are included; e.g., • Services provided by private funding • In-kind contributions and donated labor • All overhead costs, not just administrative costs chargeable to particular programs NAEH Conference, July 2007

10. Capital costs of residential programs • Cost collection approaches for residential costs that do not appear on annual financial statements and budgets • One-time acquisition, rehab, construction costs • Development pro formas (when they exist) • Less formal information from interviews, file cabinets • Value of donated space • Challenging to collect • May not be needed if purpose of study does not require costs to all funders • But governments may donate space—is this a cost? NAEH Conference, July 2007

11. Costs of Services • Which services costs to include as costs of residential program? • Is it part of the residential program or a “mainstream” service? • Do people get it because they are clients of this program? • How to measure costs of services for homeless people that are not linked to a residential program? • Utilization from program records or from HMIS • Need to learn program’s approach to defining a unit of utilization (e.g., an appointment, a period of service) and measuring its cost. NAEH Conference, July 2007

12. Cost Collection Approaches for Mainstream • Basic approach is to match HMIS client information to collection systems of mainstream programs • Objective is to apply unit costs to the period before, during, and after homelessness. • How to do this depends on the mainstream data—how the program defines a unit of service and measures its cost • Requires data sharing agreements to protect privacy and security of client information • Takes time • Takes political will—interest in the study • May be easier for a local study than for national researchers NAEH Conference, July 2007

13. NAEH Conference, July 2007