WHAT ARE the costs a community realizes when its citizens cannot find housing they can afford? While a precise dollar answer is difficult to determine, we can identify some key factors which affect us all as taxpayers.
First, substantial research has been done on community costs of chronic homelessness. A person designated as chronic has been homeless at least one year or has been homeless multiple times.
Often, chronic homeless persons reside in emergency shelters or in informal homeless camps.
Data from communities nationwide shows that the annual cost of one chronically homeless person ranges $20,000 to over $50,000. Costs can include emergency room usage, policing, social services, feeding sites, emergency shelter and use of local jails.
Because these costs are so high, some communities such as Salt Lake City have chosen to provide housing for free to some chronic homeless persons save money. Others, following the Housing First approach, give chronic homeless people the first low income place available.
According to the 2018 homeless service count compiled by the Chatham Savannah Authority for the Homeless, all of Chatham County has 648 chronic homeless persons. Using the low end of the cost of chronic homelessness, our community reveals an annual cost of $12.96 million.
To this we should add the costs of supporting people who have been homeless for less than the period for them to be considered chronic. The data collection is challenging here as we need to avoid double counting services provided by local non-profits for the chronic. But there are many more people who are homeless for part of the year (almost 4,000 last year) than those considered chronic.
The second type of cost is incurred by our hospitality industry. Local employers have increasing difficulties finding new people to work in their growing businesses, many of whom need to live close to their workplaces. Rents are too high.
Data from the Chatham County Housing Coalition Fact Sheet reports that a person shouldn’t spend more than 30% of gross income on rent. To afford a one-bedroom apartment here, it is necessary to earn $16.70 an hour (40 hour week) and $19.15 an hour to afford a two-bedroom place.
Currently, hospitality firms in downtown Savannah pay employees an average of $12 an hour for less than 40 hours a week. Since people cannot afford housing at these rates, employers will either experience greater shortage of key employees or must increase wages (and hours) dramatically. As most function on narrow profit margins, these wage pressures will be a threat to their business futures.
Maybe the most serious cost of insufficient affordable housing is the negative effect paying more has on working families. The guideline of having people not spend more than 30% of their gross income on housing (mortgage bankers actually use 28%) is designed to enable a person or family to have enough funds after paying their rent or mortgage to meet their basic needs.
People paying more than 30% of gross income on housing are considered cost burdened. This means that they’ll likely have trouble acquiring food and other necessities. Experts report that financial stress is a major contributor to family breakups. Worse, however, is the impact financial stress has on children. This stress usually causes frequent instability in the household which is antithetical to the environment children need to learn.
Children who live in unstable households have a high likelihood of not succeeding in school. Their school failures often condemn them to a life of major challenges. Society can pay a high price as their coping skills do not always lead them to positive activities. How do we quantify this cost?