The economic case for transitional and supportive housing

Transitional and supportive housing are not just compassionate solutions to homelessness and mental health challenges—they are also cost-effective investments. Communities across the United States are struggling with the long-term economic burdens of untreated mental health conditions, housing instability, and overburdened emergency services. Transitional and supportive housing programs offer a path forward that is both humane and financially sound.

The Cost of Inaction

In the United States, untreated mental health conditions cost the economy an estimated $57.5 billion annually, driven by emergency healthcare, law enforcement involvement, and social services. These reactive measures fail to address the underlying issues and result in a cycle of crisis. Similarly, homelessness costs taxpayers between $30,000 to $50,000 per person per year when accounting for emergency room visits, shelters, and policing.

The Savings of Supportive Housing

Research shows that transitional and supportive housing programs are far more cost-effective. On average, providing housing and support services costs $20,000 to $30,000 per person annually, significantly less than the costs of emergency interventions. For example, a study of supportive housing programs found that every dollar invested saved $2.70 in reduced healthcare and social service expenses.

By offering stable housing paired with mental health services, job training, and other supports, these programs reduce reliance on costly emergency systems while empowering individuals to regain independence.

A Better Future for Communities

Investing in transitional and supportive housing doesn’t just save money—it strengthens communities. These programs improve public health outcomes, reduce crime rates, and restore dignity to those in need. For far less than the cost of maintaining the status quo, we can create a system that works for everyone.

The numbers are clear: transitional and supportive housing is a smart investment, both financially and morally. Let’s start building a future where every dollar spent goes toward real solutions.