The Costs and Potential Savings of Supportive Housing for Child Welfare–Involved Families

Josh Leopold & Amanda Gold - Urban Institute

Executive Summary

In 2012, the Children’s Bureau in the US Department of Health and Human Services’ Administration for Children and Families funded Partnerships to Demonstrate the Effectiveness of Supportive Housing for Families in the Child Welfare System, a five-year, $25 million demonstration that provided supportive housing to families in the child welfare system, in five sites:

  • Housing, Empowerment, Achievement, Recovery, and Triumph Alliance for Sustainable Families—Broward County, Florida
  • Partners United for Supportive Housing in Cedar Rapids—Cedar Rapids, Iowa
  • Intensive Supportive Housing for Families—Connecticut
  • Memphis Strong Families Initiative—Memphis, Tennessee
  • Families Moving Forward—San Francisco, California

With funding from the Robert Wood Johnson Foundation, the Annie E. Casey Foundation, Casey Family Programs, and the Edna McConnell Clark Foundation, the Urban Institute evaluated the demonstration’s effectiveness across the five sites. As part of the evaluation, 807 families were randomly assigned to either a treatment group (N = 377), which received supportive housing with intensive services, or a control group (N = 430), which received usual care through the child welfare system. The study, which launched in 2012 and concluded in 2018, had multiple components. The process study described how each site designed and implemented the demonstration, and the impact study assessed the demonstration’s effect on families’ access to services, housing stability, and child welfare involvement and on the health, social, and emotional well-being of parents and children. This report summarizes the results of the cost study, which estimates the costs of the housing and services offered in the demonstration and any savings, or additional costs, resulting from the demonstration’s effects on families’ use of homeless programs and child welfare services. We focus on costs from the perspective of the agencies providing services. We do not estimate the cost or benefit to the participating families or to society at large. In part, this is because we focus on of whether the public expenditures for the program can be offset by reduced spending in other systems. But it is also because after 12 months in the demonstration, there were no clear improvements in health or adult or child well-being for families in the treatment group. If clear differences emerge in the 4.5-year follow-up survey, we will include them in future analyses.

Our process study documented wide variation between demonstration sites in the families they served and the type of housing and services they offered (McDaniel et al. 2019). And our impact evaluation found wide variation between sites in our outcomes of interest for housing stability and keeping families intact or helping them quickly reunify (Pergamit et al. 2019). Therefore, this cost study focuses on the cost of the demonstration and its effects on homelessness and child welfare spending separately in each of the five sites rather than the estimated overall costs and savings from supportive housing across the five sites.

The average annual cost of supportive housing for families ranged from $20,956 in Cedar Rapids to $39,134 in San Francisco. This includes $13,549 to $26,885 per family for case management and services—excluding costs related to training, technical assistance, and evaluation that were not part of the core services provided to families in the demonstration—and $4,289 to $10,428 in estimated housing costs.1 While families in the comparison group were not offered supportive housing as part of the demonstration, they were eligible to receive housing assistance and other services from other programs offered in the community. Our impact evaluation found that some comparison group families received housing assistance and supportive services, although at much lower rates than families in the demonstration (Pergamit et al. 2019). Our cost study does not include the costs of services families in the comparison group received aside from those provided by homeless assistance programs and the child welfare agency.

The demonstration greatly improved families’ housing stability (Pergamit et al. 2019). Nearly 86 percent of families in the treatment group were living in their own homes after 12 months compared with 49 percent of families in the comparison group. This increase in housing stability yielded modest savings from treatment group families’ reduced use of homeless programs. The greatest observed savings were in Cedar Rapids, where average annual costs for homeless programs was $2,300 lower for supportive housing families than for families in the comparison group. Supportive housing families also had lower homeless program costs in Connecticut, Memphis, and Broward County, although the differences were smaller and not statistically significant. In San Francisco, homeless program costs were slightly higher for supportive housing families, possibly because of the challenges these families experienced successfully using their housing vouchers. By contrast, an evaluation of New York City’s Keeping Families Together demonstration estimated that supportive housing reduced homeless costs for child welfare–involved families by an average of $46,000 over two years. The potential for savings was lower for this demonstration because most families were not in a homeless shelter or transitional housing when referred to the evaluation, and only a small share of families in the comparison group used homeless programs in the 12 months after randomization.

Our study looked at three categories of child welfare costs: investigations, out-of-home placements, and total costs related to an open child welfare case. The impact study found that supportive housing had no effect on the likelihood that families would have a new substantiated allegation of child abuse and neglect (Pergamit et. al. 2019). Likewise, the cost study found no effect of supportive housing on child welfare investigation costs for any of the demonstration sites.

Supportive housing increased the likelihood of family reunification and reduced the amount of time children spent in foster care (Pergamit et al. 2019). In San Francisco, Connecticut, and Broward County, supportive housing families had significantly lower out-of-home placement costs than comparison group families, and the savings increased over time. The savings were greatest in Connecticut, where average out-of-home placement costs were $11,456 lower for treatment group families, and in San Francisco, where they were $7,230 lower. In contrast, there was no difference in out-of-home placement costs between treatment and comparison group families in Cedar Rapids and Memphis. In most sites, savings were greater for families with reunification cases because preservation cases were unlikely to result in removals, even for families that did not receive supportive housing. But the greatest potential for child welfare savings may be targeting supportive housing to families with preservation cases that are most likely to otherwise result in a removal. The largest observed savings in out-of-home placement costs were for preservation cases in Connecticut, where supportive housing reduced placement costs by nearly $16,000 after 24 months.

Data on the length of time child welfare cases remained open was available only for three sites: Cedar Rapids, San Francisco, and Connecticut. In San Francisco and Connecticut, supportive housing did not affect the average length of time a child welfare case remained open and thus did not significantly affect the cost of a child welfare case. In Cedar Rapids, child welfare cases remained open longer for families in supportive housing, and the costs of an open child welfare case were more than $2,000 higher than the comparison group after 24 months.

Overall, our findings are consistent with prior research showing that offering supportive housing to vulnerable families can reduce some public costs through reduced use of homeless programs and outof-home placements. The savings are modest relative to the costs of the demonstration’s housing and services. While supportive housing greatly improved families’ housing stability, families that were not offered supportive housing were more likely to be living with family or friends than to have long, costly stays in homeless shelters or transitional housing. In many communities, the potential for significant child welfare system savings was also limited because the nightly costs of foster care are lower than the costs of supportive housing. In addition, the sites that saw the greatest savings in child welfare spending also invested the most per family in services through the demonstration. Thus, it appears that supportive housing can help keep families intact and improve their housing stability, but it does require greater investment than what is provided through business as usual.