Our Commitment to End Homelessness

The decision by the Mercy Foundation in 2008 to move the major focus of its work and grant making activities to homelessness is an important one. Although the Foundation still makes small grants to other types of social justice activities, the focus on homelessness is a bold move to draw a line in the sand and state that we want to make a solid contribution to ‘ending chronic homelessness’.

What is chronic homelessness?

Chronic homelessness is defined as an episode of homelessness lasting 6 months or longer or multiple episodes of homelessness over a 12 month period or more. People who experience chronic homelessness are likely to have 'complex needs', which usually means that they have one or more of the following:

  • developmental disability
  • traumatic brain injury
  • serious physical health problems
  • history of abuse or trauma
  • mental illness
  • mental disorder
  • psychiatric disability
  • addictions.

Evidence for ending chronic homelessness

This is not just a hollow statement of intent, this objective is based on evidence from elsewhere in Australia and overseas that aiming and planning to end chronic homelessness is possible. There is more information elsewhere on this website that provides detail about ‘ending homelessness’.

Successful models

There are the 10 year plans to end homelessness which are being rolled out across the USA and Canada. There is the rough sleepers initiative from the UK, which saw significant reductions in homelessness with a whole of government approach. There is also information about housing and support initiatives that have served to end people’s homelessness permanently. A good example is Common Ground, originally founded in New York City. Another example is the increasing use of 'Housing First' initiatives that serve to place people in housing as soon as possible (thereby ending their homelessness) and, if required, providing ongoing support to help sustain their housing.

Targeting our funding to help create systemic change

By focusing on one specific and important area, such as homelessness, the Mercy Foundation aims to help bring about structural change and greater social justice. Homelessness is not just about ‘houselessness’, it is about disconnection and disability. People who experience long periods or multiple episodes of homelessness have higher rates of mental illness, addictions, brain injury and a history of trauma. That said, there is also a great deal of homelessness that is about 'houselessness'. Without the stability that affordable and secure housing provides, some people cannot deal appropriately with mental health problems, addictions or undertake work or training.

Evidence has shown us that one of the solutions to homelessness is to provide permanent supportive housing. That is; a place to live long term with the right supports to sustain that housing .This section of the Mercy Foundation’s website provides information about homelessness and evidence based effective interventions that address and reduce homelessness. The Mercy Foundation knows that it cannot tackle this issue alone. We remain only one organisation that is contributing to this important field. We aim to work in partnership, with businesses, governments and other non-government organisations.

The cost of not ending chronic homelessness

Professor Denis Culhane who is based at the University of Pennsylvania was one of the first researchers to look at the cost of crisis services for people who are chronically homeless and the potential savings that might be made by ensuring people have affordable housing and ongoing support. His study in New York, ‘Public Service Reductions Associated with Placement of Homeless Persons with Severe Mental Illness in Supportive Housing’ (2002) [1] looked at the costs of shelter use, hospital presentations and interactions with corrective services by chronically homeless people in New York. He and his co-authors then estimated that the annual costs of all this service use was about $US 41,000. They then went onto compare the annual costs of formerly homeless people placed in supportive housing. This annual cost was just an additional $US995 per year.

Other researchers have since gone on to do similar investigations. A paper presented at the 2006 National Homelessness Conference titled: So, exactly how much does it cost to remain homeless? [2] received a lot of interest, possibly because the idea appears counter-intuitive. Superficially it must look to most people that those who are chronically homeless don’t cost very much, they keep to themselves, sleep on the streets and receive free food from charity run food vans. However, those researchers estimated that it could cost as much as $34,000 a year for some people to remain chronically homeless in Sydney. That paper and similar studies that have also been done in a number of cities in the USA have attempted to add up the types of costs that chronically homeless people, with multiple health and other needs might require in any given year. These will usually include:

  • Hospital emergency department visits
  • Ambulance transport
  • Medical/surgical hospital admissions
  • Admissions to mental health units
  • Interactions with the criminal justice system, such as police, courts and prison
  • Admissions to detoxification units
  • Stays at homelessness hostels
  • Stays at intoxicated persons units

In fact, the Housing and Support Initiative (HASI) in NSW has shown similar results. This is a joint program by the NSW Health Department and Housing NSW which provides housing and support package funding to non government organisations for people with a diagnosed mental illness.

Calculations from many HASI providers are showing that people in HASI are requiring far fewer acute hospital admissions after they are in HASI than in the years preceding their involvement in the program. This has clear cost savings for the public acute care mental health system. Since some of the original costing studies and thanks to the New Yorker magazine most people have now heard of Million Dollar Murray [3] .

This article describes a simple costing of hospital and other service use by one chronically homeless man and shows how it easily added up to over a million dollars. And, without having actually solved the fellow’s homeless problem! There is now some interesting evidence from a range of places (including other Australian studies [4] ) that it may be significantly more cost effective to provide people with appropriate supportive housing rather than continue, year after year, to watch people remain homeless and try to have their needs met via crisis services, hospitals and the police. The argument is not just a moral one, but an economic one. It is now clear that some of the work being done in cities in the USA to try to end homelessness is based on local cost/benefit studies that show that it is likely to be costing more to manage the problem rather than to solve it.

1. Dennis P. Culhane, Stephen Metraux, and Trevor Hadley, Public Service Reductions Associated with Placement of Homeless Persons with Severe Mental Illness in Supportive Housing, Housing Policy Debate  Volume 13, Issue 1, 2002
3. Million-Dollar Murray, February 13, 2006, The New Yorker.
4. Berry, M; Chamberlain, C; Dalton, T; Horn, M & Berman, G: Counting the cost of homelessness: A systematic review of cost effectiveness and cost benefit studies of homelessness, AHURI, 2003