Penny Wise But Pound Foolish: How Permanent Supportive Housing Can Prevent a World of Hurt

56 Pages Posted: 14 Jul 2019

See all articles by Lavena Staten

Lavena Staten

Homeless Rights Advocacy Project

Sara Rankin

Seattle University School of Law

Date Written: July 12, 2019


People experiencing chronic homelessness are trapped in a cycle of homelessness and trauma. Traditional approaches to homelessness attempt to address people’s trauma first and use housing as a reward for complying with treatment; such approaches fail because people cannot improve physically or psychologically while they are actively experiencing the trauma of homelessness. Our current responses to chronic homelessness do not work, but cities often justify the status quo as the only fiscally responsible option. Instead, these approaches are among the most expensive and least effective.

Permanent Supportive Housing (PSH) flips the traditional order in which homelessness and trauma are addressed by providing non-time limited, low barrier housing, and offering — but not mandating — supportive services. Once housed, people formerly experiencing chronic homelessness can then improve their physical and mental health, address substance use, and seek education or employment. Research shows that PSH results in better housing stability than housing interventions that require sobriety or treatment compliance. Further, PSH is associated with better outcomes related to quality of life, emergency services, physical and psychiatric hospitalizations, and substance use.

Better outcomes for residents also save money, making PSH the most cost-effective, long-term solution to chronic homelessness. When people experiencing chronic homelessness receive PSH, they are less likely to use emergency departments, hospitals, detoxification facilities, and shelters. PSH residents are also less likely to interact with law enforcement, get arrested, and be incarcerated.

The decreased use of these expensive services is dramatic and results in savings. Often, cost savings equal or exceed the cost of PSH. PSH is a front-loaded investment that can replace ineffective traditional programming, show significant and persistent results, and save cities, states, and the federal government money over time.

Although PSH is proven to be most cost-effective solution to chronic homelessness, existing studies radically underestimate the benefits. Most studies focus on just one or a few typical cost drivers associated with chronic homelessness, such as emergency services. No study accounts for the millions of dollars cities spend on sweeping encampments; the substantial costs for the entire criminal justice system process (from arrest through probation); the extraordinary demand for police and outreach services that do not result in issuing citations or criminal charges; the drag on each entity within the emergency response system (fire departments, EMTs, police, emergency rooms); the overtaxing of volunteers, members of the faith community, and community service providers; the clear economic impacts on local businesses, tourism, and travel; and the significant psychological and emotional tolls exacted from unsheltered people as well as the surrounding community. Thus, even the already impressive evaluations of PSH’s cost-effectiveness are vast underestimations of its impact.

PSH is the most humane and cost-effective solution to chronic homelessness. Indeed, it is the most studied intervention in all of homelessness policy. Federal, state, and local governments must stop being pennywise but pound foolish, and instead take bold steps to bring PSH to scale to finally stem the crisis.

Keywords: homeless, homelessness, supportive housing, mental health, mental illness, substance use, constitutional law, criminalization

Suggested Citation

Staten, Lavena and Rankin, Sara, Penny Wise But Pound Foolish: How Permanent Supportive Housing Can Prevent a World of Hurt (July 12, 2019). Available at SSRN: or

Lavena Staten

Homeless Rights Advocacy Project ( email )

1112 E. Columbia
Seattle, WA Washington 98122
United States

Sara Rankin (Contact Author)

Seattle University School of Law ( email )

901 12th Avenue, Sullivan Hall
P.O. Box 222000
Seattle, WA n/a 98122-1090
United States

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