saving public dollars
Is Supportive Housing Cost-Effective?
Yes—and the data proves it.
Supportive housing provides safe, affordable homes paired with essential services for people with serious mental illness, chronic health conditions, substance use disorders, and long histories of homelessness. Without these supports, many individuals cycle through emergency rooms, jails, and shelters, which places a high cost burden on public systems. Supportive housing breaks that cycle—and in doing so, saves millions in public spending.
​
Significant Cost Savings Across Public Systems
According to the Corporation for Supportive Housing (CSH), cost studies across six different cities and states show supportive housing dramatically reduces the use of:
-
Homeless shelters
-
Hospitals and emergency rooms
-
Jails and prisons
​
Cost Reductions by Location:
-
New York: $8,260/year saved per person from fewer psychiatric hospitalizations
-
Denver: $3,423/year from reduced physical health hospitalizations
-
Los Angeles: $13,392/year saved from hospitalization reductions
-
Jail & Prison Use: Savings ranged from $686–$1,320 per person annually
​
see their full report here
The Bottom Line: Supportive Housing Is Cost Effective!
​In many places, the cost savings nearly equal—or exceed—the cost of providing housing and services:
-
New York: $16,282 saved annually per unit—95% of program costs covered
-
Portland: $24,876 saved per person; housing and services cost just $9,870
​
Supportive housing isn't just more compassionate—it’s more cost-effective.
the impact of supportive housing on surrounding neighborhoods
Fears that supportive housing will lower neighborhood property values are not supported by evidence.
In fact, a growing body of research shows the opposite: Supportive housing can strengthen communities and have neutral or even positive effects on property values.
Landmark NYU Furman Center Study (2008)
In a rigorous study of 7,500 supportive housing units built in NYC between 1985 and 2003, the Furman Center found:
“Supportive housing had no statistically significant negative effect on the value of properties within 500 feet. In fact, properties located very close to supportive housing sites appreciated more than those further away.”
Key findings:
-
Nearby buildings experienced strong and steady property value growth
-
Concerns about declining home values were not substantiated
-
Supportive housing developments were consistently well-integrated
Ongoing Evidence from Urban Policy Experts
More recent analyses from organizations like the Urban Institute, Enterprise Community Partners, and Brookings Institution confirm that well-designed and well-managed supportive housing:
-
Does not concentrate poverty
-
Improves neighborhood stability
-
Can enhance public perception when paired with community engagement
“Supportive housing, when combined with thoughtful design and service integration, strengthens communities by reducing homelessness and connecting vulnerable individuals to care.” — Urban Institute, 2020
Supportive housing is not just a compassionate and cost-effective response to chronic homelessness—it’s also a smart investment in community well-being.
Well-managed supportive housing developments:
-
Do not lower surrounding property values
-
Can help revitalize neighborhoods
-
Serve as stable, quiet, and respectful additions to the block
Read the full Furman Center brief here