This morning, Scioto Analysis published a cost-benefit analysis about the impacts of spending on homelessness programs in Hawaii.
The analysis compares two different approaches to addressing homelessness. The “Housing-First” approach emphasizes the importance of funding permanent supportive housing above other services. An alternative “Treatment-First” approach prioritizes funding for emergency shelters and transitional housing above permanent supportive housing.
Using conservative estimates, analysts estimate that $10 million in housing-first spending would provide $54 million in net benefits. It would deliver housing to 340 residents of Hawaii, save four lives, and increase crime negligibly.
The treatment-first approach would create $15 million in net benefits, housing 114 Hawaii residents and saving one life.
Scioto Analysis estimates several differences in outcomes between these two policy programs:
For every dollar in costs, housing-first spending delivers five dollars in benefits, while treatment-first spending delivers two dollars in benefits
Housing-first spending will house 340 residents of Hawaii and treatment-first spending will house 114 residents
Housing-first spending lifts 170 children out of homelessness while treatment-first spending lifts 57 children out of homelessness
The average child lifted out of homelessness will gain $27,000 in income over their lifetime under both programs; the difference in the number of children supported by each program will create a gap of $1.1 million in benefits between the two programs
Both programs increase the social cost of crime in surrounding areas negligibly, and both programs may lead to modest reductions in property values surrounding homeless shelters.
Analysts conducted 10,000 simulations of each program with different variables and costs to test the model. They find that the benefits outweigh the costs in 99% of instances for housing-first spending and 97% of instances for treatment-first spending. For the housing-first program, 90% of simulations had net benefits between $10 million and $59 million. 90% of treatment-first simulated outcomes produced net benefits between $800,000 and $17.5 million.
This study is the latest in a series of cost-benefit analyses conducted by Scioto Analysis to demonstrate the use of cost-benefit analysis to analyze state policies. Past cost-benefit analyses and other analyses can be found here.
