While pathways into homelessness are diverse, personal or family finances play a significant role. Finances might be the primary pathway, such as through housing loss related to a change in income status (job loss, relationship change, disconnection from social assistance), or a related component, such as in the context of substance use or for youth who flee family violence.
Whatever the pathway, it is clear that very few individuals with significant financial resources experience homelessness, and few of these individuals remain houseless. Income is a clear protective factor in terms of housing loss.
Primary prevention of homelessness involves preventing housing loss before it occurs. Therefore, it is intuitive that financial support might be one mode of primary prevention. Many communities have these programs in place, such as the Housing Stability Bank in London, Ontario, or Home Base in New York City. So, what does the research on these programs tell us? Do they really prevent homelessness?
Evans, Sullivan, and Wallskog (2016) analyzed two years of data from the Homelessness Prevention Call Center (HPCC) in Chicago, Illinois. Rather than a dedicated in-house financial support program, the HPCC links callers to funds from different programs and organizations based on an assessment of criteria. In this model, funding availability varied significantly over time (as programs came and went) and by also having data on eligibility and shelter utilization, this created a natural experiment where the researchers could measure whether availability of funds led to decreased shelter utilization. They were able to control for (ex. statistically rule out) factors such as variations in call volume or seasonal variations.
In a nutshell, if the funding worked, likelihood of entering shelter would decrease at times when more funding was available.
The researchers found that availability of funds led to a statistically significant reduction in likelihood of entering emergency shelter at every month up to 12 months (the length of time included in the analysis). While rates of actual predicted homelessness among those who receive funds and those who received funds but still became homeless meant per person costs of homelessness prevented were $10,300, apart from the ethical argument that this is a low cost for homelessness prevention, it also eclipses the estimated $20,548 cost of supporting a person in homelessness.
Ultimately, this study demonstrates the effectiveness of financial support for primary prevention of homelessness.