How Cost-Benefit Research Has Changed U.S. Housing Policy

When Dennis Culhane volunteered at a Philadelphia homeless shelter one summer in college, he had no idea he would one day do research that would help spur the effort to end homelessness in the United States. He simply thought he could do some good.

After college, he went on to do graduate work in mental health policy at the University of Pennsylvania, where he is now a professor of social policy. His mentor then was reviewing patients’ Medicaid records to see if data about their lives could shed light on their situations before and after treatment. Culhane’s time at the shelter came to mind.

“It occurred to me,” he says, “that if there were comparable records on homelessness, we could answer all the major questions in the field.”

Among the questions Culhane would end up answering was that of how much cities spent to serve those experiencing chronic homelessness—and how to spend that money to achieve better results. By putting a price tag on effective and ineffective approaches, Culhane gained the attention of funders, advocates, journalists, and cost-conscious policy makers. Over time, his research also helped create a sea change in U.S. anti-homelessness programs, impelling a move toward evidence-based practices and an emphasis on integrated data that can track how social services are being used and what they cost.

Culhane started by turning to New York City and Philadelphia, which had databases on shelter use and entry and exit dates linked to residents’ social security numbers and birthdates. He then connected this information to other data, such prison and emergency room records, and traced patterns no one had seen before. Research he published in 2002 showed just how much it was costing to simply uphold the status quo—$40,000 a year, for example, for each chronically homeless New Yorker because of time spent in detox centers, prisons, and hospitals.

“For all that money spent, they were still living in a cardboard box,” Culhane says.

After showing the flaws in the existing system, Culhane got funding to do further work that pointed toward a better way of doing things. Placing the chronically homeless mentally ill in supportive housing, he found, reduced their time in emergency rooms and jails—and cost no more than having them bounce in and out of shelters.

“Culhane showed that it cost the same to get better outcomes,” says Mary Cunningham, a senior fellow in the Metropolitan Housing and Communities Policy Center at the Urban Institute in Washington, D.C. “Those findings were powerful across the aisle, and advocates for affordable housing made sure that policy makers knew about the studies and were considering it when policies about funding affordable housing were being considered.”

Pointing to Culhane’s findings, the Bush administration established thousands of supportive housing units for the veterans and people who were chronically homeless. The policy was based on the rationale that “it was not just the right thing to do, but the right value for the money spent,” Culhane says.

Richard S. Cho, senior policy director at the United States Interagency Council on Homelessness, says that Culhane’s work helped create a new expectation: solutions to housing problems needed an undergirding of rigorous research.

Over the last few years, Cho says, the U.S. Department of Housing and Urban Development (HUD) has worked to align its competitive grants with evidence-based practices. New HUD-funded studies are finding additional evidence of what works. A recent four-year study showed that families given housing vouchers or an affordable housing unit dramatically improved their stability, used fewer services, and had children who did better in school.

The Veterans Administration National Center for Homelessness among Veterans, where Culhane heads the research division, also is moving forward with studies meant to improve policy. Recent examples include research on the use of vouchers and rapid rehousing to help veterans returning from recent conflicts.

Other areas ripe for research, Cho and Cunningham say, include the following:

• Tailoring interventions for homeless youth out on their own.
• Establishing a single entry for social services, including housing.
• Ending the first-come, first-served system many communities still use for housing.
• Matching people to the best housing options for them.

Showing the value of new approaches—both in terms of saving money and solving other social problems—is key to getting research quickly turned into policy, Cho says.

“The more research we can do on how improving housing can also have an impact on other social issues, such as reducing use of emergency rooms, the more we can mobilize policy makers who would not otherwise lend their voices to the fight for housing,” he says.