How much would it cost to end homelessness? We’ve got the answer.

We’ve found the experts who’ve crunched the numbers, and yes, it is possible for Australia to eliminate homelessness — and it will cost less than you think.

Have you ever wondered how much it would cost to fix homelessness? If everyone pulled together, and if there was a boundless budget and complete agreement on the end goal, how much would it cost to house everyone, provide the support they need and wipe out homelessness?

We did. So we asked the experts.

How big is Australia’s homelessness problem?

Before we get to solving the problem, it’s important to understand the scale of homelessness in Australia.

Chances are, when you think of homelessness you have a very specific picture in your head of someone sleeping on a cold city street.

But homelessness incorporates much more than that: in this article, we take it to mean those in insecure housing.

The Australian Bureau of Statistics (ABS) defines it as “affecting a person who does not have suitable accommodation alternatives, and their current living arrangement is in a dwelling that is inadequate; or has no tenure, or if their initial tenure is short and not extendable; or does not allow them to have control of, and access to space for social relations”.

The ABS’ latest data drop, released today, reveals that more than 122,000 people were experiencing homelessness on Census night in 2021 — an increase of 5.2 per cent on 2016.

Georgia Chapman, ABS head of homelessness statistics, said the data had been impacted by COVID-19.

“During the 2021 Census, we saw fewer people ‘sleeping rough’ in improvised dwellings, tents or sleeping out, and fewer people living in ‘severely’ crowded dwellings and staying temporarily with other households,” she said.

“However, we saw more people living in supported accommodation for the homeless, boarding houses and other temporary lodgings, such as a hotel or motel.”

The majority of those experiencing homelessness were males, but the number of females experiencing homelessness increased by around 10 per cent from 2016.

Emma Greenhalgh, CEO of National Shelter, said the data “paints a grim picture”.

“The upward direction of increased homelessness is consistent with the problems we are seeing at every level in the housing market. The long-term nature of our chronic housing crisis and our inadequacy to respond to it has directly influenced the growing number of people experiencing homelessness on any given night,” she said in a statement.

“For a decade, Australia has been without coordinated responses to deal with the housing crisis, without consistent long-term funding that can adequately respond to need, and lack of investments in social and affordable housing. Over 15 years, since 2006, we’ve seen the number of people experiencing homelessness grow by 36 per cent.”

But Dr Michael Fotheringham, managing director of the Australian Housing and Urban Research Institute (AHURI), cautioned against overinterpreting the data due to the impact of COVID on the numbers. He said in some jurisdictions, COVID responses for people experiencing homelessness would still have been in play.

Those responses have now ended, and the country has since endured a series of interest rate rises, house price rollercoasters and skyrocketing rents, along with the removal of some homes from housing stock thanks to the impact of natural disasters.

“The census data, in fact, is really a historical data point at this time and won’t tell us a lot about the trend going forward because of the special conditions at that time. The likely scenario is that the 2016 data and then the 2026 data, the next census to be taken, will tell us much more about the long range trend,” he said.

That’s not to say that homelessness is not a problem; rather, Fotheringham said the high demand for frontline services showed that “there’s really no ambiguity about that”.

Well, how did we get here?

Homelessness is complex. Some of the leading causes of homelessness in our community include domestic and family violence, mental illness, sudden life changes and a lack of affordable and social housing. This complexity feeds into our ideas about home ownership.

Fiona Caniglia, executive director at Q Shelter, told Pro Bono News home ownership can be at odds with the idea that everyone should have access to a home.

She said that home ownership has been steadily declining in Australia since the Second World War, but that Australia has a lot of wealth “tied up in housing” that drives housing unaffordability “because there’s a significant segment of the community that really does kind of hope that housing prices will go up”.

“Home doesn’t just mean home — it means, for many people, the most significant investment that they’ve got,” she said.

See also: Renovating the great Australian dream

With the decline in home ownership, more people are relying on the private rental market, and those who do own homes are struggling with affording the cost of the home on their salary. 

Last year’s Rental Affordability Index revealed that Greater Brisbane’s rental market experienced the sharpest decline in affordability of all capital cities in Australia with its index score falling by 11 per cent.

Salaries are no longer enough to save a deposit and pay rent at the same time, Caniglia said, and homes are “increasingly priced out” of people’s salaries. Meanwhile, policies like negative gearing “inflate housing demand and therefore prices”, accelerating housing unaffordability.

At the same time, Caniglia said a lack of long-term planning in the housing space has also led to the housing quagmire that many cities and towns around the country are now experiencing.

With people priced out of the market, demand for social and affordable housing increases too. Caniglia reduces the problem to a simple equation: “lack of long-term planning about the total housing system combined with a lack of housing targets to meet population demand and within that, [lack of] targets for social and affordable housing”.

“It’s not easy to say in a sentence what landed us here, because housing systems are incredibly complex, and even some solutions cause impacts that you have to manage. Providing significant rental subsidies, for example, can also be inflationary… and similarly, some first home owner grants have inflated property prices [and] the cost of construction,” she added.

“Reducing the pipeline of people on a trajectory to homelessness, at the same time as you increase the pipeline of housing, that’s how you get to zero.”

Right, so how much will fixing homelessness cost?

Last year’s Give Me Shelter report found that every dollar invested in social and affordable housing could deliver double the benefits to the Australian community, a rate of return better than some major infrastructure projects around the country.

But the cost of not acting on the need for social and affordable housing was estimated by report author SGS Economics and Planning to be $25 billion per year by 2051.

Marcus Spiller, principal and partner at SGS, told Pro Bono News that ending homelessness can be done.

He’s crunched the numbers, and he says he knows how much it would cost, too: $17 billion over 30 years. 

The cost of acting on homelessness is less than the cost of not acting.

Asked what that would cover, Spiller said the number represents “the sum of the difference between what these people can pay in terms of rent and what it would cost to actually supply a rental dwelling”.

He’s referring to households in the bottom two quintiles of income distribution — the bottom 40 per cent of households in income. This includes people experiencing homelessness, households in significant housing stress, and low income households that may have jobs but are still struggling to find affordable accommodation.

“Let’s assume, for example, that the government said to a community housing provider or even a private investment firm… ‘we’re prepared to pay you the difference between the rent that you would get from renting your properties out to people who would otherwise be homeless… you’re going to get some rent from that, but what we’re going to do is we’re going to top up that rent up to the level that you require to make the investment worthwhile for you’,” Spiller explained.

“If you sum that gap for all the people who are homeless, and would be homeless by 2051 and all the people in between… you come up with a figure of $17 billion.”

Homelessness for Spiller refers to anyone in insecure or improvised accommodation, including rough sleepers and couch surfers.

The figure also includes some wraparound services, like health support or referrals to connect people back into the workforce.

If the cost of the dwellings required was also added in, Spiller said eliminating homelessness would cost roughly an extra $127 billion, based on the value of between 300,000 and 400,000 homes in 2051.

Fotheringham said the $17 billion figure would involve “30 years of consistent intervention”.

“We’ve underinvested in social housing for three decades, so the figure reflects it’s going to take three more decades to repair that. But it’s not going to happen by doing business as usual. It requires a serious step up in intervention. And one of the things that concerns me is that we see sugar hits of a five year program in Victoria, the Big Housing Build, and then that winds up as though the job’s done — but the job’s not done,” he said.

“We need to actually see investment in housing in the same way we see investment in health care. It is not an occasional [thing]. It needs to be a constant.”

What do we need to solve homelessness?

Q Shelter has long advocated for “immediate solutions” to remedy housing affordability and reduce homelessness.

That means building more social and affordable housing, and also repurposing or acquiring existing buildings to provide immediate assistance while other homes are being constructed.

“If I had all the money in the world, what would I do? Well, I’d build a lot more housing,” Caniglia said.

But it’s not just about homes, she added; housing needs to be near cities, transport, services, employment and infrastructure for people to live safe and connected lives.

“If there’s no transport, there’s no services, [and] there’s not much employment, you can maybe secure a home for people, but they may be plunged into food poverty or fuel poverty because the cost of commuting is really high, for example,” she said. 

“We’re not talking about overwhelming unimaginable density, but we do need to think about more intensified urban environments to consolidate homes with infrastructure, to reduce the infrastructure costs of delivering those homes and making sure that people also live near all of the things that make life viable and sustainable and affordable.”

Spiller agreed and said the focus should be on creating communities.

“Instead of applying band-aid solutions like temporary accommodation, what we should be striving to do is put homeless people directly into stable homes and neighbourhoods so that they can put down roots, so to speak, and become part of the community and engage in the labour force [and] engage with local services,” he said. 

Can we eliminate homelessness?

Caniglia would like to see homelessness eliminated within a generation. But solving homelessness is not easy, she cautioned, and it’s going to require all stakeholders pulling together.

That includes the private sector, the construction industry, governments and those at risk of homelessness.

Performance needs to be monitored and accountability needs to be written into any plans to ensure we make it, Caniglia added.

A discussion is also needed about what factors tip people into homelessness, and what can be done to mitigate those factors, especially in the case of enduring and intergenerational homelessness.

And, it will be important to recognise that “diverse housing solutions” are needed “to suit the diversity of circumstances and sentiment”, Caniglia said, such as long-term rentals and build-to-rent programs.

“We will always need a landscape in which there is social and affordable housing, and we need to get the proportion of that right to meet population demand. It’s for all levels of government, the private sector and the not-for-profit sector to have all their shoulders at the wheel, together, really trying to make that happen,” she said.

“No one sector can do it alone and no one tier of government can do it alone because it’s such a massive undertaking to achieve that.

“We’re facing a future that is different from the past. But I think we can undertake meaningful community-level dialogue and change processes that help people embrace that future so that nobody is living on the streets.”

The federal government’s signature housing policies, aimed at addressing the nation’s housing crisis, are currently making their way through parliament.

National Shelter’s Greenhalgh commended the action the government is taking.

“After a decade of inaction, these are much needed initiatives,” she said.

“We can turn the tides against further increases in homelessness. If we want to see a reduction in the numbers of people experiencing homelessness in the next Census, we need to act now and act with urgency.”

Spiller reiterated that eliminating homelessness is possible for a country like Australia.

“It certainly is something that’s achievable. It’s something within our grasp if we really want to do it.

“It should be intolerable to have homelessness. And into the bargain, if we did tackle this in a fully focused way and put the money in, for every dollar that we put in, we would get back $1.34. We should do it because it’s the right thing to do and we should do it because it’s economically wise to do it,” he said.

Fotheringham added that ending homelessness will take big-picture thinking.

“If it was easy, we would have done it by now. If you could do it within one electoral cycle, we would have done it by now. You can’t do it in two terms of a government, you need to be thinking in 10 terms of government. And this is the challenge,” he said.

“It’s extremely early days for Australia. But we can see a path before us if we have the courage to stick to it.”