No Action on Homelessness Costs $19M a Year in Victoria

Not addressing rough sleeping is costing Victorian taxpayers $19.2 million annually because of the additional burden placed on emergency, health and justice systems, according to the Council to Homeless Persons (CHP).

The calculations are based on Sacred Heart Mission’s report from its landmark Journey to Social Inclusion program. It found the yearly cost of not housing people with complex needs was $17,591 per person.

CHP applied that figure to the 2011 Census statistics, which recorded Victoria’s rough sleeping population as 1,092.  

CHP acting CEO Kate Colvin said the numbers of rough sleepers, and therefore the cost to taxpayers, was likely to be significantly higher.

“We know that rough sleeping has increased since 2011, so we would expect that $19 million is conservative in that way because we’re actually looking at a bigger rough sleeping population than what the ABS recorded,” Colvin told Pro Bono Australia News.

A recent street count in Melbourne’s CBD found that the number of rough sleepers had jumped from 142 to 247 in the last two years alone.

CHP is advocating for a “housing-first model” to address homelessness. Clients are provided with a home and pay 25 per cent of their income on rent.

Colvin said the model would deliver a significant long-term saving from a reduced strain on emergency, health and justice services.

“The primary part of it is not waiting for people who might have drug addictions or mental health issues to fix those health issues before they’re housed, but it’s actually about getting people into housing,” she said.

“Then, once they’re housed, working with them to support them to address those health issues.

“It’s been very robustly developed and evaluated particularly in locations overseas, but some in Australia. What it’s been able to conclude is that it’s far more effective at improving people’s health status than trying to get them to participate in [programs] while they’re homeless.

“A proper housing-first approach basically relies on outreach and engagement of people when they’re sleeping rough and supporting them to establish tenancy and housing and then supporting them to keep that housing.”

CHP said the model had been used widely in Canada, Europe and the US, and reduced rough sleeping in Utah by 75 per cent.

However, the organisation said a lack of federal and state investment in affordable housing was the main barrier to reducing rough sleeping.

In July, the Victorian Government formed a homelessness taskforce to respond to Melbourne’s rough sleeping problem, and injected $850,000 into crisis responses. The majority of this money will be used to pay for emergency accommodation.

CHP said the homelessness sector was “hamstrung” in finding permanent housing. Public housing waiting lists are at 32,000 in Victoria.  

“The really key missing piece in Victoria is that we don’t have the housing to put people in, so it’s very difficult for homelessness services in Victoria to use a housing-first approach because housing is in such small supply,” Colvin said.

“Actually getting that housing that people need on the ground can be done by direct government investment but the scale of new housing that’s needed would probably require more innovative approaches that use both government resources and engage the private sector and community sector in partnering with government to develop housing.”

But she said with the right approach increasing the housing supply was “absolutely possible”, especially as savings would be delivered down the track.

“There’s lots of different ways of thinking about funding housing,” she said.

“For example, you could require developers of property to include a portion of low-cost housing within developments, that’s called inclusionary zoning.

“Or government could issue bonds – that’s something that’s been talked about.

“Currently in the federal tax system you have negative gearing, which gives a tax incentive for the production of rental housing, but there is no requirement that it either be targeted to people who are on low incomes or that it be low-cost housing. So you could reform that tax arrangement and direct it to the policy outcome that you’re trying to achieve – the delivery of more low-cost housing.

“There’s a range of different financing options [to] get the private sector involved in delivering low-cost housing.”