For every $1 spent providing housing and support for a homeless person with severe mental illness, $2.17 in savings are reaped because they spend less time in hospital, in prison and in shelters.
That is the most striking conclusion of a study, obtained by The Globe and Mail, that tested the so-called Housing First approach to providing social services.
Beyond the cost savings, the new research shows that placing an emphasis on housing gets people off the streets and improves their physical and mental health.
"A house is so much more than a roof over one's head. It represents dignity, security and, above all, hope," said Louise Bradley, president and CEO of the Mental Health Commission of Canada.
The MHCC, which undertook the $110-million At Home/Chez Soi research project in 2008, will release the much-anticipated findings in Ottawa on Tuesday.
Ms. Bradley summed up the results in three words: "The approach works."
About 30,000 Canadians are homeless on any given night, but the research focused on the 10 per cent who are chronically homeless, almost all of whom suffer from mental illness.
Usually, homeless people do not get housing and services such as rehab until they meet certain criteria like sobriety or taking medications, and people have little choice on where they can live.
The Housing First philosophy holds that getting a person a place to live is primordial because it creates the stability to tackle issues such as addiction, unemployment and lack of education.
The study, the largest of its kind in the world, enrolled 2,148 homeless people with mental health issues in five cities. Around half, 1,158 people, were enrolled in Housing First, and the balance received treatment as usual.
The research was conducted in Vancouver, Winnipeg, Toronto, Montreal and Moncton.
The typical participant was a man in his 40s who had been homeless for more than five years; 32 per cent were women, 22 per cent aboriginal and 25 per cent from visible minorities – a reflection of Canada's homeless population.
Their average monthly income, including social assistance, was $685, but one in six lived on less than $300 a month. Almost all, 93 per cent, were unemployed.
People who are severely mentally ill and chronically homeless use a lot of services – an average of $225,000 a year, according to research.
Providing housing and support is costly too – an average of $19,582 per person. But the avoided costs are much greater, $42,536 on average, because those who are housed are put in hospital less often, make fewer ER visits and do not use shelters as often.
That works out to $2.17 in savings for every dollar.
For people with less severe mental illness and lesser needs, 96 cents is saved for every additional $1 spent on housing, and for the homeless with low needs, 34 cents is saved for every $1.
Paula Goering, the lead investigator for the project, said while the savings are impressive for the high-needs group, "it's not just about the money. It's what you get back from the investment that matters."
She noted that "treatment as usual" means maintaining people in homelessness at great expense. With a Housing First approach, the money goes toward creating independence and stability rather than shelters and prisons.
In the research project, 72 per cent of those in Housing First group had stable housing after two years, compared to 34 per cent in the treatment as usual group.
Dr. Goering said the most exciting aspect of the research has been its impact on public policy.
Based on preliminary findings, the federal government shifted $600-million over five years in the Homelessness Partnering Secretariat to a Housing First approach.
Candice Bergen, the Minister of State for Social Development, is expected to attend the release of the research.
As a follow-up, the Mental Health Commission will train workers in 18 other cities on the Housing First model and how to adapt it to local needs.
Participants in the study will be tracked for several more years to determine the long-term impact.
Homelessness is estimated to cost the Canadian economy about $7-billion a year.