The United Way of Greater Los Angeles commissioned a study conducted by the University of Southern California (USC) that chronicled the consumption of public services by four homeless people over a two-year period. The study reported five principal cost areas: substance abuse, physical health, mental health, criminal justice, and housing.  The study found that permanent housing solutions yield a 43% cost savings.  For two years, the total cost to provide public services without permanent housing was over $80,000 greater than the cost to provide permanent housing in addition to support services.  When permanent housing was provided, mental health services were the only area with increased costs; however, the associated benefits of regularly seeking mental health services had positive impacts on the system.

From the report:

In order to analyze the costs of public services, investigators focused first on the two-year period before the individual­s were placed in permanent supportive housing. During that time period, two of the four had gone through detox six times costing $23,382. Two of the four had been hospitalized (removal of kidney stone and bladder infection) at a cost of $20,250. All four had used the hospital emergency room for health and alcohol issues (19 visits), costing an additional $7,885. All four had been arrested at least once ($2,756) and spent time in jail ($8,545). One of the four had also served 90 days in prison ($12,060).

Full report: Homelessness Cost Study (PDF | 808.96 KB)

United Way of Greater Los Angeles. (2009). Homeless cost study.