Report: Homelessness in Silicon Valley Costs $520 Million a Year

By the Numbers: $520 Million

Homeless advocates have long held that getting people off the streets is not only the humane thing to do, it makes economic sense. Now, for the first time, a study that bills itself as the most comprehensive of its kind has put a price tag on homelessness in Santa Clara County: $520 million a year.

The estimate comes from a report titled, “Home Not Found: The Cost of Homelessness in Silicon Valley,” which was released Tuesday by the Los Angeles-based Economic Roundtable. Santa Clara County shelled out $200,000 for the report, to get a clearer sense of the public cost of homelessness.

Researchers sifted through 25 million records relating to 104,206 county residents who lapsed into homelessness between 2007 and 2012. They found that the region spent $3.1 billion over those six years on medical and mental health treatment and jail stays. The study found that the county spends about $83,000 a year each on 2,800 chronically homeless individuals, who cycle in and out of local hospitals and jails.

Silicon Valley claims 7,567 homeless people—the seventh-highest count of any metro area in the nation, according to a 2014 census, and one of the highest rates of unsheltered homeless.

Someone living on the streets costs taxpayers, on average, $62,000 a year; that figure drops to $20,000 if they’re placed in housing.

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The report recommends that the county prioritize housing for the chronically homeless and strengthen supportive services to make sure people stay housed. It also encourages public agencies that work with homeless residents to maintain detailed records to guide policymakers.

Here's a link to the full report, which the authors claim is the "largest and most comprehensive body of information that has been assembled in the United States to understand the public costs of homelessness."

Jennifer Wadsworth is a staff writer for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

18 Comments

  1. Am still digesting the report, and find these interesting (see page 48):

    “It is only in the top half of the tenth decile, or the top 5%,
    that cost reductions as a result of housing are likely to be sufficient
    to offset the cost of housing”

    “Half of homeless residents who have been housed have been in
    the top fifth of the cost distribution for homeless persons, but
    only a fifth were in the top 5%.

    A quarter of the individuals housed by Housing 1000 have exited
    their housing. Retention rates can be improved by strengthening
    post-housing supportive services.

    The estimated average annual pre-housing public cost for 103
    homeless residents in the tenth cost decile who were housed by
    Housing 1000 was $62,473. The estimated average post-housing
    cost was $19,767. The estimated annual cost reduction for those
    who remained housed was $42,706.”

    Haven’t found data to support the claim that the 25% exit rate was due to insufficient services. There are many reasons why people change housing. Presumably, if housed homeless became diligently upwardly mobile, then the rate would be 100%

    So far the report seems to be a damning indictment of SCC’s incoherent homeless programs. Is triage based on who’s most likely to succeed or most costly? There appears to be no consistent or uniform policy.

    As profiled in the Mercury News (Jungle & Guadalupe River encampment profiles) and survey data, our current practices make Santa Clara County an attractive destination for the homeless. Elmwood began as a poor farm to address this contingency. Am unaware of better solutions though detractors decry ‘criminalizing the homeless’.

    The most glaring omission is ‘how much is avoidable?’ at different price points.

  2. Agreed. There are many unanswered questions from the study. Essentially, we want to know how much money should be invested in providing housing for the homeless? Which categories of homeless (those who can make turnaround with a little help or those chronically homeless individuals that need a great deal of help?

    If we provide a home and additional services, how much would it cost us? Will it truly reduce our other costs such as medical and legal fee (hospital and jails)? What is this reduction?

    Too often people confuse the difference total cost, sunk cost and marginal cost. Lacking a clear answer on these questions, the study (as presented on “Home Not Found”) does not address the issue.

  3. $5.2 billion over 10 years in Santa Clara County alone, and the number of homeless has increased over that 10 year period. With that amount of expenditures, no wonder the homeless flock here. So now, based on a study that allegedly “sifted through” (what does that mean?) 25 million records, yet another solution is proposed. I’d like to see a report on what each of the other 57 counties in California have spent on the homeless. Wanna bet there is a direct correlation between how much money is thrown at the homeless in a given county and how many homeless settle in that county?
    From the study report: “Conclusions and Recommendations: There are 2,800 people in the County who experience persistent homelessness and are the most frequent users of public services. For this group, the average annual public cost is $83,000, which significantly exceeds the cost of permanent supportive housing. These vulnerable and acutely distressed individuals should be given priority access to housing that is permanently affordable to them with ongoing supportive services.” I am unconvinced that putting some persistently homeless HIV positive drug addict with hepatitis and probably other chronic health problems in a home is going to save the county a lot of money over time. His costs to the taxpayer are mostly health care related, no doubt. Putting him in a home will not make him HIV negative nor will it cure his hepatitis, his heart disease, his chronic hypertension, and it is unlikely to get him off drugs long term. So, I’d bet that the alleged reduced costs by housing these people was obtained by not counting all those costs. Further, every report I’ve heard is that one-third to one-half of the persistently homeless this latest study addresses do not want to be in a permanent home. Wanna bet that this latest magic wand will have met with minimal positive results over the next ten years? I’d also bet that the costs of this new homelessness eradication plan will end up costing close to $10billion over the next ten years.

    • So….let this hypothetical HIV positive person w Hep C continue to be vulnerable on the street??
      Are you presuming that if one has HepC and HIV Pos one cannot be a productive member of society ?? Shame on you.
      Has it occurred to you that the high cost of housing has pushed families…FAMILIES!…onto the street?
      Compassion is needed..not knee jerk criticism and condemnation.

      • Yes, people with chronic diseases can be productive members of society. But what do we do about the 15% or so that are responsible for the majority of out social safety net costs and resist efforts to change? So far I’m unaware of more cost-effective solutions than reinstating poor farms. The name’s been updated to be less pejorative, but still haven’t discovered a better solution.

        Data doesn’t support your claim that family homelessness is due to high housing costs. Mental health and substance abuse are highly correlated with their plight. Also begs the question, why live on the streets if living costs are more affordable elsewhere? Perhaps a better solution is to provide bus fare to say Phoenix. Weren’t they shipping indigents to California?

  4. The solution is relatively simple. An 80′ X 80′ Quonset hut, with insulation and doors costs about $60,000 to $70,000 and would be a one time expense. Build these huts in agricultural areas like Gilroy where there are plenty of crops to harvest and make the unskilled “professional homeless” work in the fields, picking crops. These people would be paid at least minimum wage, have free living accommodations and pay their taxes just like everyone else. Housing would be a modest by the County, so the homeless won’t have to pay rent but they will have to work and pay for everything else, including their own health insurance, just like everyone else. Anyone can pick crops or do other unskilled labor but if a person can net $62,000 a year doing nothing but leeching off the system, why try? Society has made homelessness a career path.

    Mandatory drug testing at the welfare office and healthcare facilities should be instituted and if a person is found to be under the influence, they get no check and are put in jail for violation of section 11550 of the Health and Safety Code. The solution to homelessness is there. What is lacking is the political will.

    • Mandatory drug testing at the welfare office and healthcare facilities should be instituted and if a person is found to be under the influence, they get no check and are put in jail for violation of section 11550 of the Health and Safety Code. The solution to homelessness is there. What is lacking is the political will.

      How about we have drug tests for elected officials first?

    • A group of us met with the Housing Dept’s Homeless team a few years ago and proposed essentially what you suggest. At that time, SJ could have acquired used and new surplus FEMA housing for free plus military housing as troops were withdrawn.. We also pointed out that used Class A mobile homes were priced well below $20K. Housing officials were adamantly opposed. It must be permanent they claimed – even though transitional housing is limited to 2 years.

      At the time, SJ had a grant to house St. James Park’s chronic homeless. More than 18 months after the program was launched, less than 50% of the available units were occupied. Officials claimed that chronic homeless often refused to be domiciled or were unable to sustain residency requirements. Noise, prostitution, drug manufacturing / dealing, aggressive behavior, and basic hygiene rendered them unsuitable and resulted in evictions, we were told.

      As others have mentioned, the study neglects to mention how much savings could be realistically achieved and fails to cite examples where it has. The top 5% may very well require institutionalization for compassionate care.

      • Taxpayer & JS Robillard are right. Quonset huts are a great idea. Ag work is a good idea, too. But the central problem is with the people themselves. They have to want the services.

        Too many don’t want those things, because those things come with what the homeless consider leashes; rules. It would be great to provide Q-huts, but there are too many homeless with mental problems, drug problems, and other reasons why they wouldn’t or couldn’t stay in them.

        JM O’Connor is right, too: if you want pigeons, throw out bird seed. If you want the homeless, throw out money and benefits. It may sound cruel, but the easiest way to get rid of them is to stop giving them free grant money, free food stamps, EBT cards, etc. They may have problems, but they’re not stupid. They will go where the pickins’ are easy.

        • “…the easiest way to get rid of them is to stop giving them free grant money, free food stamps, EBT cards, etc.” The reason that won’t happen is the homeless lobby and the “pilot fish” who work in city/county/state governments who would lose their jobs if government did that. Thousands of government homelessness workers have a huge vested interest in avoiding a permanent solution to the “ homelessness problem.” Did you see how many dozen Santa Clara County employees were listed on the acknowledgements page of the Home Not Found report? If a permanent solution were found, they’d all be out of work. We could use that money to hire more public safety personnel or fill in potholes. But it’ll never happen.

  5. “Officials claimed that chronic homeless often refused to be domiciled or were unable to sustain residency requirements. Noise, prostitution, drug manufacturing / dealing, aggressive behavior, and basic hygiene rendered them unsuitable and resulted in evictions, we were told.” So, let’s just leave them on the streets for residents to take care of? Our community is assaulted every day by drunks, drug addicts, transients, homeless, and panhandlers urinating, defecating, screaming obscenities, and sleeping on our lawns, in our yards, on our sidewalks. How about kicking some of that money to the the communities around Saint James Park that are suffering from this homeless crisis?

  6. I agree with Taxpayer… The top 5% or more that are mentally ill need institutionalization for compassionate care, as they will not leave the street willingly, and cannot even admit they have a problem.

  7. Probably worth mentioning some other aspects.

    1. The homeless population is not homogenous. They have different needs and different abilities. However, lots of social science projects have identified different subgroups, assessments, and outcome tracking criteria. Not 100% of course, but follow-up studies indicate well worth doing. London claims to have eliminated homeless except for the several hundred that absolutely refuse. Salt Lake City claims to have eliminated homelessness among vets. Other success stories abound – Google turns up a lot of what and how cases.

    2. SCC’s fragmented homeless industry (government, government subcontractors, and other non-profits) don’t have uniform practices. Many have none other than first come, first served. Two of SCC’s largest providers (CityTeam & Salvation Army) decline to use a homeless tracking system that provides for continuity of care. Salvation Army does publish outcome statistics and they are impressive – and no, I don’t believe they are cooking the books. However, there’s a fair amount of self-selection as those that don’t toe the line (including Christian worship) are pitched out. Ditto for CityTeam, but they don’t publish data. I do remember when one of CityTeams executives claimed a 97% cure rate for alcoholics. As someone that’s worked with that population, 9.7% is much more realistic for 1 year of sobriety.

    FWIW, I believe Salvation Army and Catholic Charities do the best job. Haven’t found others that are as transparent and accountable. I have a relatively low opinion of SJ’s and SCC government efforts. Little to no accountability, no outcome based programs, utter failure to adopt best practices, abysmal management.

    3. Downtown Streets (DTS) provides gift cards in lieu of cash, plus food, and shelter in exchange for work. SJ contracts with them. However, some of their homeless clients tell me that, contrary to SJ’s contractor rules, DTS fails to meet the living wage requirements. The gift cards are donated by businesses and not impacting DTS revenue. See earlier comment about abysmal management and accountability.

    4. Good luck if you’re released from jail (shortly after midnight) or on weekends or holidays. No services. Some religious groups dispense food at St. James Park on weekends, but nothing else is available I’m told by homeless people.

    Although a violation, SJPD declines to cite religious groups for public feeding without a permit, nor does SCC Health inspect for proper sanitation or cite them for failure to possess a certificate.

    Recommendations?
    a. Complain to our elected officials: demand accountability and transparency – not just throwing more money at the problem.

    b. Implement competition. Currently we have monopolies providing homeless services. If say, Emergency Housing’s contract is pulled, no other organization is prepared to take the workload.

    c. Request a Civil Grand Jury investigation of public money used for homeless services.

  8. Taxpayer: anyone can submit a request to the Civil Grand Jury to investigate..Get on the website and just do it.

    • I have and thanks for letting readers know too. I’ve met with the records clerk, a presiding judge, and correspondence with the County Court system’s CEO (didn’t know there was one until locating an org chart). See http://www.scscourt.org/court_divisions/civil/cgj/grand_jury.shtml for details or volunteering.

      The CGJ prepares a workplan selecting a subset of recommendations. CGJ staff advised that providing as much evidence as possible to substantiate the complaint makes it easier for them and increases the likelihood that the complaint will be selected. Makes sense, but haven’t confirmed with any CGJ volunteers.

  9. What we really need to do is join forces so that our screams are loud enough for City Hall to hear. The EPA was suing the city because of homeless pollution, why don’t residents? There is plenty of evidence that San Jose is not protecting taxpayers, not preserving public spaces, but rather allowing them to fall into disrepair, and not cleaning human waste from our sidewalks, creating a major public health hazard!

  10. I looked into the homeless issue last year and found that most of the so called costs are basically “double dipping” models- Basically, an “agency” that handles the homeless get paid by a whole bunch of people to take care of them- starting from DVA to the local county and city, everyone shells out money to pay the same “agency” to take care of the “same” person. It is a big racket. The actual benefits that reach the actual homeless people are trickled down as most of the money is paid to “care givers”/ counsellors/ …you fill in the blanks. Many of these agencies are also charities/ NGOs and they are all in the “good works” department. when I met with some of the homeless, all they want is a “hot shower” and decent toilet facilities- I recommend that cities work with gas stations to provide for hot showers and toilet facilities against a “smart card” that can be “recharged” by one or more of these “agencies” and then instead of giving them “money” they get timed showers, proper toilet facilities. european paid public toilets are great models to adopt.