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Report: Lack of State Funding Jeopardizes Program that Prevents Homelessness
2016-08-16

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On any given night more than 6,700 Chicagoans find themselves without a home or shelter bed. How they become homeless varies widely, but one thing is now certain: homeless prevention programs and funding dramatically decrease the chances they will end up on the streets and saves taxpayer dollars. However, the state budget impasse has significantly jeopardized future funding of the program, potentially leaving hundreds of people without a home and costing taxpayers tens of thousands of dollars in emergency shelters, transitional housing, and other services rather than preventing homelessness.

In a groundbreaking new study conducted in Chicago and published last Thursday in the Journal of Science, it is revealed that when homeless prevention funds are available, an individual's chance of becoming homeless within 6 months is reduced by 76 percent. The study proves that a minimal investment averaging $2,400 per person to prevent someone from becoming homeless saves more than $20,000 per person, per year in taxpayer funds that are needed to support a person in a shelter and with other services.

However, the State budget impasse has meant funding for homeless prevention programs is in limbo and more than $1 million in preventive funding was not available in fiscal year 2016. In Chicago, homeless prevention funds are disbursed to dozens of agencies through All Chicago, which receives about $2 million per year in funding, more than $1 million of which comes from the State of Illinois. In 2014, homeless prevention funds ensured 5,000 individuals and families did not become homeless. Because of the state budget impasse, that number was reduced to 3,000 last year.

The groundbreaking study that proves homeless prevention programs are effective and efficient was conducted by the Wilson Sheehan Lab for Economic Opportunities at the University of Notre Dame with Catholic Charities of the Archdiocese of Chicago and All Chicago. This is the first time the impact of emergency financial assistance on homelessness has been rigorously measured and would not have been possible in any other city in the country. Chicago is the only city in the nation with a unique, collaborative database and call center screening process which made the study and tracking of callers and funds possible.

Study Findings

The study followed 4,500 Chicago individuals and families from 2010 — 2012. The callers who received funding were significantly less likely to enter a shelter within 6 months. In particular:

— Those calling when funds are available are 76 percent less likely to enter a shelter within 6 months

— Those calling when funds are available spend 2.1 fewer days in a shelter over a 6 month period

— Callers with especially low incomes ( those with incomes below $750 per month ) who call when funds are available are 88 percent less likely to enter a shelter

Nearly every major city, including Chicago, runs a homeless prevention hotline that helps those facing homelessness find financial assistance. Despite the large number of programs and more than 15 million people calling for these services nationwide every year, little has been done to understand their impact on homeless.

"It is very common for nonprofit and government agencies to provide financial assistance to prevent homelessness. And yet, until now, we really did not know what effect this assistance had," said James Sullivan, one of the study authors. "This is the first study that examines the direct impact of financial assistance on homelessness. By comparing the shelter entry rates for those who call when funding is available to the rates for those who call when funding is not available, we were able to show that financial assistance makes a big difference."

Chicago: Big Risk for Homelessness

— 50% of Chicago renters and 50% of homeowners pay more than 30% of their income to rent or mortgage.

— Catholic Charities of the Archdiocese of Chicago administers the Chicago Homelessness Prevention Call Center and fields 70,000 calls per year, connecting people with rent, utilities and other emergency assistance.

— For 2016, so far there have been 11,514 calls for rent assistance and 6,873 calls for security deposits. As limited funding has been available in 2016, call volume and assistance is significantly reduced compared to previous years.

How the Homeless Prevention Call Center Operates

— In Chicago, the Homelessness Prevention Call Center ( HPCC ), administered by Catholic Charities, connects those at risk of homelessness with the dozens of local agencies that provide temporary financial assistance to address their needs.

— Funding is received from federal, state, and city sources as well as private foundations.

— On any given day, funding may or may not be available. New funds are made available daily and existing funding streams are halted throughout the year.

— The HPCC funding is updated multiples times a day. If a person calls one day and funds are not available, the person may call the next day and funds could be available.

The study linked information gathered from the call center with the Homeless Management Information System database managed by All Chicago. By combining this data, callers were tracked to determine if or when they entered a shelter and if they had received financial assistance to prevent homelessness.

"It can be costly to prevent a family from becoming homeless," said Monsignor Michael Boland, President of Catholic Charities. "However, we know that the long-term costs to society are much greater when a family becomes homeless, including children doing poorly in school and a greater likelihood that family members end up in the emergency room. It simply makes financial and moral sense to fund programs like this."

"Funding to homeless prevention services has decreased in recent years. However, this study shows that when we invest a small amount in individuals and families who face the threat of losing their home, we are able to prevent families from facing an unnecessary crisis. The state budget impasse is greatly impacting funding for this program and we strongly urge our community to come together and find a solution to release the funding for this much-needed and effective program," said Nonie Brennan, CEO of All Chicago.


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