Alberta's Challenge

Homelessness has many faces

Homelessness can affect anyone. It has many faces…

The family with children whose household income can’t afford rising bills...

The Albertan with a mental illness, addiction, or physical illness who needs treatment…

The victim of family violence or abuse, who can’t go home…

The disabled adult with special needs and few resources…

Homelessness is a complex problem that results from a number of complicated issues. Each homeless individual or family has a unique set of circumstances that contributed to their homelessness.

Many homeless are able to obtain limited employment. Others are unable to work full-time due to mental illness, addiction or other issues. Some homeless are confronting multiple challenges that are creating instability in their lives.

They are all our fellow Albertans. Each of them should have a place to call home, and access to support that will help them keep that home.

The scope of the challenge

As Alberta has grown, so has the scope of homelessness. It didn’t occur overnight.

A series of fiscal, social and policy decisions over many years contributed to today’s homelessness challenge.

The exact numbers are hard to determine, but we know that each night thousands of Albertans sleep in shelters or on the streets.

Based on homeless and shelter counts undertaken in 2006, it’s estimated there were 8,400 homeless in Alberta. We know this number is growing.

Each community has unique dynamics that impact the size and character of its homeless population, but we know the homeless population is diverse. For instance, recent studies provide a point-in-time snapshot of the homeless in Alberta:

  • 14% of homeless are living on the street;
  • 40% have some form of mental health problem;
  • 50% have some history of substance abuse;
  • 25% are employed;
  • 10% are young adults;
  • 11% are families with school age children;

There is also a large population of “hidden” homeless comprised largely of women, youth and families. These are homeless Albertans who avoid the homeless-serving system, often out of fear of authorities. Research will be needed to assess the impact this group has on the inflow of new homeless into the homeless-serving system.

In addition, many more Albertans are considered “at risk” of becoming homeless. That is, they spend more than 30% of their income on housing. Some of these Albertans will fall into homelessness.

The health, safety and dignity of homeless Albertans are compromised every night; and every day, the cost to Albertans keeps rising.

Homelessness in Alberta is growing, despite the efforts of many hard-working individuals and the funding efforts of government. This is because Alberta is simply working to manage homelessness, instead of working to end it.

We need to fundamentally change the way we tackle the homelessness challenge if we are going to solve it. If we don’t change the way we approach the issue, the number of homeless will continue to increase, and the costs of homelessness will skyrocket.

A fundamental shift in direction

Homelessness is a complex challenge, and there is no single solution – no silver bullet – that will solve the issue. Addressing homelessness requires integrated, cross-ministerial work, and efforts from a number of sectors and social organizations.

It will also require a fundamental change in thinking. This is the crux of the Plan for Alberta.

The Plan changes the way homelessness is addressed.

Rather than spending money on more shelter spaces to accommodate more homeless Albertans, the Plan shifts the system to focus on housing and moving the homeless to more self-reliance.

Spending is aimed at getting homeless Albertans into permanent housing, and connecting them with the supports they need to maintain that housing.

This double-barrelled approach is very important. Simply re-housing a homeless person isn’t enough. The underlying factors that originally contributed to their homelessness must also be addressed; otherwise, the person is at a high risk to fall back into homelessness.

Different levels of support are required for different homeless Albertans. In general, someone is “homeless” if they do not have a permanent residence to which they can return whenever they choose. For the purposes of this Plan, the major categories of homeless Albertans are defined as follows:

  • Chronic homeless – A person or family is considered chronically homeless if they have either been continuously homeless for a year or more, or have had at least four episodes of homelessness in the past three years. In order to be considered chronically homeless, a person must have been sleeping in a place not meant for human habitation (e.g. living on the streets) and/or in an emergency homeless shelter.
  • Transient homeless – A person who is homeless for less than a year and has fewer than four episodes of homelessness in the past three years.
  • Employable homeless – Those who do not suffer from any major barriers to employment (such as serious psychiatric, medical, or substance abuse problems, criminal histories, limited education, or lack of work experience), but who require assistance to find permanent housing and move to self-reliance.
  • Homeless families – Those who are homeless and are: parents with minor children; adults with legal custody of children; a couple in which one person is pregnant; multi-generational families. Many members of this group are women fleeing abusive domestic situations and struggling to re-establish independent homes for themselves and their children.

Ending homelessness makes sense

Bringing an end to homelessness is socially the right thing to do.

Our fellow citizens, their families and children, shouldn’t be living on the streets or in emergency shelters. Instead, they should be given the opportunity they need to re-establish stability in their lives and to maintain permanent housing. Every Albertan deserves the opportunity to succeed.

Ending homelessness also makes economic sense for Alberta taxpayers.

The savings expected from the Plan for Alberta, based on our current homeless population of 11,000 are outlined in Table 1.

If Alberta continues its current approach of simply managing our current homeless population, it’s estimated that the Alberta government will incur costs of $6.65 billion over 10 years.

This is because managing homelessness is extremely costly to taxpayers.

The Alberta government incurs direct costs relating to homelessness, such as the emergency shelter system, services for homeless Albertans, and programming to homeless-serving agencies.

The government also incurs expenses through indirect costs– that is, spending in other government systems such as the health system, corrections system, and justice system. Homeless Albertans utilize these systems in multiple ways that result in higher costs to the taxpayer. For example, without a home of their own, homeless Albertans will visit an emergency room when they are ill; this adds indirect costs to the health system.

Costs to manage homelessness are also higher because it’s less cost-effective to deliver programs and services to people without permanent homes. For instance, chronically homeless people – those facing the most challenges – cost taxpayers directly and indirectly over $100,000 a year per person.

Cumulatively, these direct and indirect costs add up, and without reducing the total number of homeless people.

Changing Alberta’s approach to homelessness – moving from managing homelessness to ending homelessness – will result in dramatic savings for Alberta taxpayers.

Implementing the Plan for Alberta will shift Alberta’s work approach and expenditure focus to endinghomelessness.

Investments will move homeless people off streets and out of shelters, and into permanent housing with supports. As homeless Albertans are moved into permanent housing, they will utilize services in more cost-effective ways, saving taxpayers money.

As shown in Table 1, moving 11,000 individuals and families out of homelessness will require investments of $3.316 billion. This is far lower than the cost of simply managing them ($6.65 billion). Over 10 years, this translates into savings of around $3.3 billion for taxpayers.

The savings are likely to be much higher. The cost savings described above relate to Alberta’s currenthomeless population. However, if we don’t shift our work approach by implementing the Plan for Alberta, the number of homeless Albertans will continue to grow over 10 years.

Modelling work commissioned by the Secretariat estimates that, under the status quo approach, homelessness in Alberta will grow at a conservative rate of 7% per year. By 2019, Alberta will be managing 21,222 homeless Albertans and families, and will have spent $13.6 billion on direct and indirect costs to manage them.1

By implementing the Plan for Alberta including targeted prevention services, homelessness will be reduced and ended over 10 years, rather than continue to grow. This will save Alberta taxpayers up to $7.1 billion, largely through indirect costs that would otherwise need to be spent.2

Although the Alberta government will face higher direct investment to re-house homeless Albertans, the government will realize substantial indirect cost savings over the term of the Plan.

Direct investments in the Plan for Alberta will be fully recovered by 2014, generating better value for taxpayers and achieving a valuable social goal.

Table 1: Comparative Cost of Managing versus Ending Homelessness

Cost to Manage

Groups of homeless Number per group Average annual cost per person or family Total Cost to manage homeless over 10 years Capital to build new units Cost to MANAGE homelessness over the next 10 years
Chronic 3,000 $114,850 $3.45 billion $0  
Transient 5,500 $39,680 $2.182 billion $0  
Employable 1,500 $21,600 $324 million $0  
Families 1,000 $69,600 $696 million $0  
  11,000   $6.65 billion $0 $6.65 billion

Cost to End

Groups of homeless Number per group Cost to provide housing and services Total Cost to provide support program Capital to build 8,000 new housing units for homeless Investment to END homelessness over the next 10 years
Chronic 3,000 $34,000 $1.02 billion $500 million  
Transient  5,500  $14,000  $770 million  $528 million   
Employable 1,500 $6,000  $90 million $30 million  
Families 1,000 $17,800 $178 million $200 million  
  11,000   $2.058 billion $1.28 billion $3.316 billion

Cost savings achieved by implementing 10 year plan to end homelessness based on today’s homeless population $3.334 billion

Projected Cost and Savings

Homeless Population Homeless Population in 2019 Projected cost to continue manageing homelessness (status quo approach) Total 10-year savings by implementing Plan for Alberta&
Future* 21,222 $13.6 billion $7.1 billion

* Estimates based on 7% annual growth in homeless population over 10 years. (Source: Homeless Management Model, prepared for the Secretariat.)

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PID: 14602