On Wednesday, I went to a luncheon hosted by the Columbus Metropolitan Club on the topic of homelessness. The panelist posed a question to one of the panelists: what would it cost to end homelessness in America?
The panelist Bob Weiler, a real estate developer in Columbus, said the money exists, but the political will doesn’t. The response was useful and rang true to me, but I’m a policy analyst. I wanted to place my hand into the proverbial wound: I wanted to know how much it would cost.
So let’s do some math.
According to the U.S. Department of Housing and Urban Development’s 2023 Annual Homelessness Assessment Report to Congress, 653,104 people experienced homelessness during the annual point in time count in January 2023.
Let’s start with an expensive way to estimate this: comparing it to the cost of prison. Incarceration is an expensive form of housing due to the high costs of security.
The Federal Bureau of Prisons estimated in their 2021 Annual Determination of Average Cost of Incarceration Fee that the 2019 cost to imprison one person for a year was $39,158. If we adjust this cost for inflation to December 2023 prices, then this comes out to $46,114.24 per person in current dollars.
This means the cost to house every homeless person in the United States using this estimate of the cost to provide shelter for federal inmates would be about $30 billion. This should be considered a high-end estimate due to the high costs of providing shelter in this way.
What if we just paid for the average cost of housing across the country? According to the Apartment List National Rent Report for January 2024, the nationwide median rent in January 2024 was $1,379. This means that paying for the rent for each of these 650,000 people experiencing homelessness would cost about $11 billion.
There should be cheaper ways to house people than simply paying the median rent, but these figures suggest that on the high end, eliminating homelessness in the United States should cost somewhere from $11 billion to $30 billion per year.
How does this compare to other social spending by the federal government? Let’s look at the the top antipoverty programs in the country in the 2023 Census Bureau annual report on poverty in America to assess this question.
The top antipoverty program in the United States is Social Security, which pulled 29 million people out of poverty in 2022. The United States spent $1.5 trillion on Social Security in FY2023. This means eliminating poverty using the most expensive method above would cost about 2% of what we currently spend on social security retirement payments.
The second largest antipoverty strategy in the United States is refundable tax credits, which pulled 6.4 million Americans out of poverty in 2022. The federal government distributed about $57 million in cash to families through the earned income tax credit in 2023. So the least efficient method we have for ending homelessness would cost a little over half as much as the federal earned income tax credit.
The third-largest anti-poverty program is the Supplemental Nutrition Assistance Program (SNAP), formerly known as “food stamps.” This program pulled 3.7 million Americans out of poverty in 2022. The University of Missouri’s Food & Agricultural Policy Research Institute estimates SNAP cost the federal government $112 billion in FY 2023. That means our most expensive method for ending homelessness would cost about a quarter of the annual federal spending on SNAP.
It looks like Bob was right. The money is there, the question is whether the will is there to use that money to end homelessness in America.