Homelessness: a $194 million problem for Victoria

EXCLUSIVE: FAILING to provide beds to homeless Victorians costs the state almost $200 million a year amid a spike in rough sleeper numbers, says a landmark study.

• Homelessness extends past Melbourne CBD

FAILING to provide beds to homeless Victorians costs the state almost $200 million a year amid a spike in rough sleeper numbers, says a landmark study.

In a national first, the cost of homelessness has been measured in terms of healthcare, crime, unemployment and other factors.

A team of experts led by Melbourne University commissioned consulting firm SGS Economics and Planning to do a cost-benefit analysis of providing “last resort” accommodation like emergency, rooming and boarding house beds to the homeless.

It was cheaper for society to supply such beds than leave people on the streets, said the groundbreaking report The Case for Investing in Last Resort Housing to be launched on Thursday.

Affordable housing advocate and former boss of Frasers Property Australia Robert Pradolin urged governments to act, or face burdening future generations with massive social costs.

“The homelessness we see on our streets today is the lack of investment in social and affordable housing which has happened over a period of several decades by successive Labor and Liberal governments,” he said.

Rough sleeper numbers in Melbourne have jumped by over 70 per cent over the last two years, and it’s estimated that some 7600 Victorians are homeless.

The City of Melbourne is proposing beefed up anti-camping laws after a squalid homeless camp ran for weeks outside Flinders St Station.

The analysis done for the university’s Melbourne Sustainable Society Institute said that the cost of not housing each rough sleeper was an extra $25,615 a year, including $8429 in healthcare and $6182 in crime-related costs.

Homeless people in the Melbourne CBD have set up camp under the railway bridge on the cnr of Flinders and William Streets. Picture: Jake Nowakowski

This represented about $194 million a year in extra costs due to the state’s homeless population.

But the study found that providing a last resort bed would generate a net benefit to the person and society of $10,800 a year, or $1 invested reaping $2.70 in benefits like lower health and crime costs.

Lead author and SGS Economics and Planning senior associate Ellen Witte said there had been a reduction in the supply of last resort housing in recent years, with an average 40 requests turned down each day in Victoria.

“Increasingly not-for-profit providers and community housing providers have stepped up and they are effective in delivering those services, but they still need funding and that needs to come from government,” she said.

“There is much to gain in economic and social terms, both for government and society, by assisting the homeless,” she said.

However, Ms Witte stressed that the homeless scourge would never be totally eradicated because some people refused offers of beds.

The homeless camp on Flinders street. Picture: Nicole Garmston

“There’s a very small percentage of people with such difficult issues and who are so disengaged from service providers that they actually choose not to live there,” she said.

Experts who contributed to the report included Melbourne University’s Professor Brendan Gleeson and Professor Carolyn Whitzman, Launch Housing’s Dr Heather Holst and Rob McGauran from MGS Architects.

ANNUAL BENEFITS PER NEW BED

Health: $8429

Reduced crime: $6182

Job-related: $4236

Other: $6768

Total: $25,615

Source: SGS Economics and Planning

@JMasanauskas