The voices of Urban Institute's researchers and staff
June 5, 2017

The cost of homelessness will spike if Congress adopts Trump’s 2018 budget proposal

June 6, 2017

The Trump administration’s 2018 budget proposal would cut funding for housing, homelessness services, and critical safety net programs, but history shows that reducing spending only increases homelessness and drives costs up.

The Trump administration proposes cutting the US Department of Housing and Urban Development’s budget by $7.4 billion, or nearly 15 percent from 2017. The budget reduces housing subsidies (such as public housing and vouchers) and homeless services for families, veterans, people with disabilities, and seniors. It also eliminates programs like Community Development Block Grants and the National Housing Trust Fund. These and sweeping cuts to safety net programs—Medicaid, the Supplemental Nutrition Assistance Program, and Temporary Assistance for Needy Families—will cause hardship for many families and lead to significant increases in evictions and homelessness.

This increase in evictions and homelessness won’t come cheap. When people experience a housing crisis, they often turn to shelters for a place to sleep. When shelters are full, some communities rent motel rooms to supplement. Washington, DC, for example, has housed hundreds of families in a former hospital and makeshift shelter, and when that fills, the city puts families up in cheap motel rooms. There is nothing cheap about those motel rooms, and as DC knows well, there is nothing easy about siting, building, and managing emergency homeless shelters.

A smarter, more cost-effective solution is helping people exit shelter as quickly as possible through rapid re-housing and ensuring an adequate supply of affordable housing, either through housing vouchers or preserving and developing affordable units. But the Trump budget ignores the research and decreases funding for these programs.

Cutting these programs is shortsighted from a cost standpoint. Homelessness is expensive. One study found that the monthly cost for emergency shelter is about $4,819 per family, compared with $1,172 for a housing voucher and $880 for rapid re-housing.

For policymakers concerned that vouchers have ongoing costs or that households stay in the program too long, the same study found that total program costs for those receiving vouchers was $45,902 over three years, only about 9 percent higher than the same period for those families living in emergency shelter and not offered priority access to a voucher.

Research shows that investing in housing pays huge dividends. Housing reduces child poverty, helps families stay together, reduces food insecurity and domestic violence, and helps keep chronically homeless adults with disabilities off the street and out of emergency rooms and jails. And data show that the median stay in the voucher program for families with children (nondisabled, nonelderly households) is 2.6 years.

Given the return on investment housing produces and the significant cost of homelessness, Trump’s budget makes poor choices about how to spend taxpayer dollars.

Carolyn Harrison, 31, 2nd from left, her husband Samson Harrison, 40, and their youngest child, Makhi Harrison, 2, attend a Credit and Money Management Workshop hosted by Operation Hope as part of the homeless prevention program at Wheeler Creek Community Association on Wednesday, April 26, 2017, in Washington, DC. Photo by Jahi Chikwendiu/The Washington Post via Getty Images

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