Housing the Highest-Cost Homeless

Back in 2013 the Economic Roundtable concluded a two-year study of the 10% of Los Angeles homeless people who have the most frequent hospitalizations. The study, "Getting Home: Outcomes from Housing High Cost Homeless Hospital Patients," made the astonishing discovery that for the 10th decile patients, the city was spending an average of $63,808 a year. When instead of leaving them on the streets it placed them in permanent supportive housing, their total annual costs including rent and food fell to $16,913.

The Los Angeles County Department of Health Services has created a new unit called Housing for Health devoted precisely to trying to house these extraordinarily expensive patients. Created by DHS Director Mitchell H. Katz, Housing for Health aims to use the huge savings to invest in creating long-term housing for the extremely ill homeless, and to do it now, not waiting for the housing boom that will eventually materialize from the Proposition HHH bond issue.

Their strategy is to use market-rate housing. Even though this is much more expensive than special low-income affordable housing, it still saves money when the occupants are from this super-expensive 10th decile chronic health-care user group.

The director of the Housing for Health unit is Marc Trotz. In an interview that appeared in the LA Times December 18 Trotz was asked if it wasn't better to wait on dedicated cheap housing. He responded:

"A new housing project can take up to five years for completion. Five years of work and you create 100 units of housing. That's not going to cut it. They open, you identify 100 people and that's great. And the buildings are great. But those opportunities are spread out over time. We need to be housing homeless people every day."

Starting with $4 million from the Hilton Foundation and $14 million from the county, Housing for Health then located 35 or 40 organizations with staff who can do case management. Trotz said that their experience has been that the heaviest users of emergency rooms and other medical facilities "utilize $50,000 to $150,000 per year in avoidable costs. . . . We're saying we should put them in supportive housing at $20,000 a year."

Trotz told the Times that the cost per month to house a homeless person with supportive services is about $1,500. $950 of that is usually a federal rent subsidy. The formerly homeless tenant is expected to pay 30% of their income in addition to their subsidies. Surprisingly, a large percentage of homeless have some small income such as SSI. Late in 2016 Housing for Health was providing housing for 1,200 formerly homeless.