Housing for Homeless Alcoholics Can Reduce Costs to Taxpayers

JAMA study finds drinking goes down even if residents are allowed to drink.

    • March 31, 2009

Providing housing and support services for homeless alcoholics costs taxpayers less than leaving them on the street, where taxpayer money goes toward police and emergency health care. Stable housing also results in reduced drinking among homeless alcoholics, according to a Seattle-based study published today in the Journal of the American Medical Association (JAMA).

The study found that the program saved taxpayers more than $4 million dollars over the first year of operation. During the first six months, even after considering the cost of administering housing for the 95 residents in a Housing First program in downtown Seattle, the study reported an average cost-savings of 53 percent—nearly $2,500 per month per person in health and social services, compared to the costs of a wait-list control group of 39 homeless people. 

“Our study suggests that homeless alcoholics who qualify to take part in Housing First can stay out of jails and emergency rooms, and cost the taxpayer a lot less money as a result,” said Mary E. Larimer, Ph.D., professor of psychiatry and behavioral sciences and adjunct professor of psychology at the University of Washington and lead author of the study. “We also found that these benefits increase over time and that they are possible without requiring that participants stop drinking. And yet, the longer the participants stay in the housing program, the less they drink.”

“The Housing First model was developed in response to the problem of long-term homelessness among those living with severe mental illnesses and substance abuse problems,” said William G. Hobson, a co-author on the JAMA paper and executive director of Downtown Emergency Service Center in Seattle. “In most U.S. cities, people with behavioral health disabilities die on the streets far more frequently than any other subset of the homeless population. Before they die, they use large amounts of taxpayer-funded services in our health care and criminal justice systems. The housing program, known in Seattle as the 1811 Eastlake project, was created to stabilize people and stop them from endlessly cycling through emergency rooms, prisons and other crisis institutions, reducing the amount of taxpayer money spent on them.”

The Housing First approach offers stable housing to chronically homeless, alcohol-dependent individuals without requirements of abstinence or treatment. It is being implemented in major cities throughout the United States. Initiatives that have adopted the comprehensive model have been criticized for allowing enrollees—virtually all with severe substance abuse problems—to continue to consume alcohol in their new quarters. The 1811 Eastlake study, funded by the Substance Abuse Policy Research Program (SAPRP) of the Robert Wood Johnson Foundation, represents the first U.S.-controlled assessment of the effectiveness of Housing First specifically targeting chronically homeless alcoholics. 

Researchers began enrolling people for the study and the control group in November 2005 and finished in March 2007. A list of the most expensive homeless users of health and social services in the community provided the target population from which participants were drawn.

“These findings suggest that stable housing provided to people who are still drinking and addicted to alcohol can reduce their use of crisis services and ultimately their consumption of alcohol,” Larimer said, noting that virtually every person invited to participate had agreed to enroll. The study also notes that restrictions on the consumption of alcohol in a housing environment may well prevent those most in need from accepting help.

The wait-list comparison study lasted six months, comparing usage of health and social services of participants in the program to those in the control group. But researchers also followed the enrollees for another six months, looking at the trend in alcohol consumption among residents and comparing their use of services to levels in the year before they enrolled in Housing First. After one year in the program, the 95 participants had reduced total costs relating to their care by more than $4 million compared to the year before.

“Each of them had cost state and local governments an average of $86,062 per year before being housed, compared to an average of $13,440 it costs per person per year to administer the housing program,” Larimer said.

In assessing utilization and cost of services, the researchers collected data from jail bookings, days incarcerated, shelter and sobering center use, hospital-based medical services, publicly-funded alcohol and drug detoxification and treatment, emergency medical services, and Medicaid-funded services.

Because health care and criminal justice system costs for the participants continued to decrease over time, as did their alcohol use, Larimer says, she and her co-authors concluded that permanent housing may be necessary in order to take full advantage of the cost-savings identified in the study.  The authors concluded that several factors were key to the success of the program, including the decision to limit rules and regulations on residents, and to provide them with supportive case managers, as well as easy access to providers of mental health and health care services within the housing program.

The authors started with a list of 388 of the most expensive users of hospitals, jails and sobering centers. The study enrolled every willing candidate until the downtown apartment building was filled up. Hobson said “we only had to offer housing to 79 people to get 75.” The waiting list was comprised of others who also wanted the housing.


The Substance Abuse Policy Research Program of the Robert Wood Johnson Foundation funds research into policies related to alcohol, tobacco and illegal drugs.

The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation's largest philanthropy devoted exclusively to improving the health and health care of all Americans, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, meaningful and timely change. For more than 30 years the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves, helping Americans lead healthier lives and get the care they need. The Foundation expects to make a difference in our lifetime.