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Homelessness in the US and UK Executive Summary

Published on
2020-06-25
Written by
Stephen Clare
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Homelessness in the US and UK Executive Summary

This is a summary of our cause area report on homelessness in the US and UK. The full report can be found here.

Homelessness is perhaps the most conspicuous symptom of societal inequality in high-income countries. Naturally, many people are interested in supporting initiatives that seek to reduce the prevalence of homelessness and alleviate the suffering of those affected. This report describes the prevalence of homelessness, the funding landscape for anti-homelessness initiatives, the most promising interventions and our funding recommendations. Our scope is limited to homelessness in the US and UK, though the review of the evidence for effective interventions is likely relevant to other high-income country contexts.

Our research produced three new funding opportunities: Community Solutions: Built for Zero, which works in both the US and the UK; the J-PAL North American Housing Stability Evaluation Incubator in the US; and the Crisis Policy and Campaigns team in the UK.

While we are impressed by each of these organisations’ commitment to scaling up evidence-based solutions to homelessness, at this time we do not think they are likely to be competitive with our top-tier charities in terms of cost-effectiveness. Homelessness is a traumatic experience linked to a range of adverse health and life outcomes. However, we do not currently think homelessness is as neglected by governments and philanthropists as some other high-priority cause areas. We do not expect marginal donations in this space to be as impactful as donations in some other cause areas.

Prevalence of homelessness

People may experience homelessness for a long period of time (often called chronic homelessness) or have short brushes with homelessness. Homelessness can also be sheltered or unsheltered. In the UK, unsheltered homelessness is also referred to as “sleeping rough.” There is evidence that people experiencing homelessness have lower life expectancy than the national average, are more likely to suffer from chronic physical or mental health conditions, and experience discrimination in accessing social services. Children experiencing homelessness also have worse outcomes with respect to health, nutrition and education.

Point-in-time counts reported to the US Department of Housing and Urban Development suggest that about 550,000 people are experiencing homelessness at any one time in the United States. Of this population, approximately 40 percent are in California or New York and one-third are experiencing unsheltered homelessness. The data appear to show that, at least at the national level, the number of people experiencing homelessness has declined slightly over the last decade.

Figure 1: Housing and Urban Development point-in-time counts of people experiencing homelessness in the US(Source: Author’s calculations using “AHAR Report”, HUD Exchange, 2020.)

In England, 2018 official point-in-time counts from the Ministry of Housing, Communities & Local Government found that the total number of unsheltered people experiencing homelessness was about 4,677 at any one time. In addition, from January to March 2019, 37,690 households were considered threatened with homelessness and 32,740 were considered homeless.

It is important to note that homelessness is defined and estimated differently by the UK and US governments, so data are not easily comparable across countries. In the UK, an individual is considered threatened with homelessness if they have applied to the local authority for assistance and the local authority has determined they are likely to become homeless within 56 days. The legal definition is important because it determines what assistance the local authority is legally required to provide (usually a relief duty). Since a number of these households are assessed as legally threatened with homelessness but not in priority need, or would have obtained housing without government support, not all of them would be considered homeless in the colloquial sense. About 5,000 people are estimated to be rough-sleeping, the equivalent of unsheltered homelessness, at any given time in England.

Public funding for homelessness programmes

At least 10 homelessness programmes are administered by seven federal agencies in the US, with a total annual budget of more than US$3 billion. This underrepresents total public funding, likely by a significant degree, because it does not count spending by state and local governments. The US government also spends about US$44 billion each year on rental assistance. With 10.4 million annual beneficiaries, that is approximately US$4,221 per person per year of assistance.

National public funding for homelessness initiatives in the UK is about £1.2 billion per year. The proportion of households whose rent is subsidised is higher in the UK than in any other OECD country included in the Affordable Housing Database. Housing allowances for low-income households totalled £21.9 billion for 4,177,820 housing-benefit-claimant households. This works out to approximately £5,242 per claimant household per year of assistance.

Prioritising interventions

There are several widely-implemented programmes to prevent or alleviate homelessness. To assess the various possible approaches, we used pre-existing literature reviews and considered the cost-effectiveness and strength of supporting evidence for each intervention.

The evidence base for “what works” to fight homelessness is relatively weak, but a few programmes stand out. Permanent Supportive Housing programmes like Housing First seem particularly promising. There is some evidence that funding the most effective homelessness programmes may prove to be cost-neutral. While such interventions might have high upfront costs, these can be outweighed by savings at different points in the system (e.g. emergency health care, criminal justice system) to produce better outcomes for both people experiencing homelessness and wider communities. However, we are not certain that measures will be cost-neutral as strong evidence is lacking. Further, implementation may be difficult if politicians and government bodies fear public backlash to initial spending increases.

Because the US and UK governments each spend billions of dollars per year on homelessness initiatives, we decided to recommend charities that are working to improve the effectiveness of funding by shifting it towards the most efficient programmes. We limited the charities we considered for this project to national organisations with multiple points of influence at sub-national levels.

Recommended funding opportunities

We are recommending two funding opportunities each for the US and UK. One of these funding opportunities, Community Solutions: Built for Zero, works in both countries. We have modelled the expected cost-effectiveness of these opportunities here. In expectation, we think a donation to any of these recommendations will prevent a year of homelessness for about $20,000, though this estimate is highly uncertain.

The Community Solutions: Built For Zero project partners with cities and counties to help create holistic and data-driven strategies to end chronic and veteran homelessness in their communities. Community Solutions focuses on fostering collaboration and accountability between all stakeholders, developing real-time data systems to assess homelessness, using the data to implement rapid testing of new ideas, and shifting outcome measures from individual programmes to the level of homelessness in the community overall.

We believe that alleviating homelessness requires the coordinated implementation of a collection of effective and evidence-based solutions by government agencies and other stakeholders. We also think that in many locations the existing funding to tackle homelessness is not allocated as effectively as it could be to reflect the nuances of different characteristics of homelessness in different communities. We think the Community Solutions model -- which focuses on coordinated, data-driven decision-making to achieve meaningful reductions in chronic and veteran homelessness -- can both address this need for specificity, while also using its national reach to help scale and test effective strategies.

The J-PAL North American Housing Stability Evaluation Incubator provides technical support to government agencies, nonprofits and other organisations working to combat homelessness to allow them to test interventions through randomised controlled trials (RCTs). The aim of this work is to contribute to the evidence base on how best to structure and scale effective programmes to prevent and alleviate homelessness. We are confident recommending J-PAL as they share our commitment to finding and supporting interventions that are backed up by rigorous evidence.

The Crisis Policy and Campaigns team works to drive the policy agenda around homelessness in the UK to be holistic and based on the evidence of what interventions work and what the current situation regarding homelessness in the UK is. We believe that the route taken by the Crisis Policy and Campaigns team to promote and advance holistic solutions to homelessness that are rooted in evidence is the most effective way to nudge existing government spending to more effective solutions to reduce homelessness.

Stephen Clare

Author

Stephen joined Founders Pledge in 2019. Previously he was a Program Analyst for the United Nations Development Programme in Rwanda. He has also worked on climate change projects with the UN in Panama and the Youth Climate Lab in Canada. Stephen has an M.Sc. from McGill University and a B.Arts.Sci. from McMaster University.