AHURI POLICY ANALYSIS

Delivering services for people at risk of homelessness

What is the policy issue?

At the time of the 2011 Census over 105,000 Australians were counted as homeless. While becoming homeless has terrible impacts and costs on individuals, it also increases costs for governments. Research shows the average annual costs to government for health, justice, and 'child placed in out-of-home' care costs was $25,343 per homeless person in the year before they accessed case managed support (in 2010 dollars). In contrast, the annual average cost to government for the whole Australian population for these services was $2,588 per person.

To reduce the impacts of homelessness on individuals, governments run a number of support programs. While these programs can be very beneficial in both saving money for governments and in assisting individuals, for policy-makers it is important to understand what support programs are effective in preventing homelessness and what is the cost effectiveness for different programs (such as for clients of supported accommodation services or for public housing tenancy support programs).

Key fact

In the year before they accessed support, clients of specialist homelessness services were heavy users of non-homelessness services such as health, justice and welfare services when compared with the Australian population average.

The health, justice and welfare costs (in 2010$)

When a client accessed support, the costs to government in providing supported accommodation was $4,890 (this included administration, cost of maintaining client accommodation and the cost of the capital employed)

The supported accommodation costs (in 2010$)

As a result of accessing supported accommodation, there was a reduction in the use of non-homelessness services (health, justice and welfare services) by clients and therefore a cost saving

The reduced health, justice and welfare costs (in 2010$)

Source: Zaretzky, K., Flatau, P., Clear, A., Conroy, E., Burns, L. and Spicer, B. (2013) The cost of homelessness and the net benefit of homelessness programs: a national study, AHURI Final Report no. 205 and Zaretzky, K. and Flatau, P. (2013) The cost of homelessness and the net benefit of homelessness programs: a national study, AHURI Final Report no. 218.

Policy development options

For policy-makers, the key is to prevent and reduce the impact of homelessness on people who are very vulnerable, and therefore reduce the impact of the costs of homelessness on both individuals and the community. Indeed, the longer a person experiences homelessness the more complicated it is to resolve their homelessness.

Consequently, ensuring people at risk of homelessness are able to access and maintain appropriate accommodation and other necessary services (such as mental health services or drug and alcohol rehabilitation) are key components of effective homelessness policy.

Policy options to reduce the likelihood of people becoming homeless, or the severity of episodes of homelessness, include:

  • Staying Home Leaving Violence models for women escaping domestic violence
  • Mental health housing support
  • Tenancy support programs
  • Rent Subsidy Scheme
1. Explanatory statement

Staying Home Leaving Violence (SHLV) schemes allow women and their children to remain in the family home (including rented and owned dwellings) when there has been an episode of violence for a period of time (or indefinitely) depending on economic circumstances.

Of those seeking help from specialist homelessness services, 55 per cent of women with children and 22 per cent of all cases were those escaping domestic violence. Preventing women and children from becoming homeless will alleviate pressure on the homelessness system and save the community financial and other resources.

2. A real world example

Staying Home Leaving Violence schemes operate in 23 locations across NSW.

SHLV staff members conduct risk assessments to assist the client in deciding whether to remain in the home (such as determining how aggressive the ex-partner is likely to be), ensure necessary protection orders are in place and conduct safety audits (such as installing security doors or ‘panic’ alarms), as well as providing ongoing emotional support, sometimes for several years.

The SHLV schemes involve collaboration and a degree of integration between the police, courts and SHLV staff, as legal issues such as the right to change door locks in rented dwellings are governed by legislation, which varies across different states and territories.

3. Scope of the practice

As an integrated practice the SHLV scheme is operating in NSW. While aspects of the scheme may operate in other states and territories, it is not widespread.

An evaluation of the NSW SHLV scheme between October 2012 and September 2013 identified that 1324 clients were assisted across the state and an additional 863 people received ‘referral only’ service (typically information or further referral). On average, each SHLV service had 60 clients during the year.

During the evaluation period 1532 women were referred to SHLV services across NSW, with 669 being taken on as new SHLV clients. The Police made the largest number of referrals (22.2%), followed by Women’s Domestic Violence Advocacy Service (20.3%). The average length of time clients received support was 7 months.

4. Effectiveness/impact

Qualitative research with 17 clients of SHLV services found that 14 of the women were living free from violence, and of the remaining three, one had ongoing family law issues, one had mental health issues caused by having lived with violence, and one still had an ongoing fear of her ex-partner. More than half remained in their family home long-term, which suggests that the SHLV scheme prevented them from becoming homeless.

Apart from the potential risks from ex-partners, the SHLV schemes also acknowledge that housing affordability affects the length of time women and children can remain in their home.

SHLV schemes may better prevent homelessness when they operate in conjunction with rent subsidy schemes, which are designed to assist by helping women enter, or remain in, the private rental sector. The schemes are intended to take pressure off the waiting list for public and community housing (e.g. recipients of the Start Safely funding in NSW must be eligible for social housing). They are intended to create time for women to either find work to afford the rent or to plan to leave for somewhere they can afford.

5. Guide to evidence

Evidence on the effectiveness of Staying Home Leaving Violence type models is found in AHURI Final Report no. 196 Home and safe? Policy and practice innovations to prevent women and children who have experienced domestic and family violence from becoming homeless.

1. Explanatory statement

A Mental health housing support program provides people with mental health problems access to stable housing linked to clinical and psychosocial rehabilitation services.

There are strong links between mental illness, unstable housing and homelessness, with an estimated 50 to 75 per cent of homeless young people experiencing some form of mental illness. A 2010 survey of 1825 adults (aged 18–64 years) with psychotic illnesses revealed that 5 per cent were homeless at the time of the study and 13 per cent had experienced homelessness during the previous year.

Having a mental illness can lead to problems maintaining rental housing due to periods of hospitalisation resulting in absence and possible non-payment of rent; reduced skills to live in the community; not maintaining the property to an acceptable standard; and exhibiting psychiatric behaviour which is problematic to owners, rental managers and neighbours.

2. A real world example

The NSW Housing and Accommodation Support Initiative (HASI) operates with the involvement of NSW Health, Housing NSW and various non-government organisations to provide people with mental health problems access to stable housing linked to clinical and psychosocial rehabilitation services. It is also designed to support people with mental illness to participate in the community, to improve their quality of life, maintain successful tenancies and, most importantly, assist people in their recovery from mental illness.

3. Scope of the practice

Other states have similar specific programs for housing and supporting people on low incomes who have mental health issues, including:

4. Effectiveness/impact

An evaluation of the NSW HASI in 2012 found that the majority of consumers (around 90 per cent) successfully maintained their tenancies, that their mental health was improving and that they were spending less time in hospital since joining the program. In addition, consumers were regularly using appropriate services in the community and demonstrating a high degree of independence in daily living.

AHURI research shows that, for a young person diagnosed with mental illness, having safe, secure and affordable housing is vital in helping with their recovery. Interviews with 38 young people aged 18 to 30 years who experienced a mental illness revealed that, while interviewees knew they were never likely to be cured of their mental illness, they could still aspire to recover in ways that allowed them to live a more ‘normal life’. Although interviewees acknowledged the importance of medication in managing the symptoms associated with mental illness and the support of good clinical care, they were adamant that recovery must be lived as part of everyday life including maintaining hope and confidence for the future. Secure housing goes a long way towards creating the conditions for individuals to work on their recovery.

5. Guide to evidence

Evidence on the impact of mental illness on housing is found in AHURI Final Report no. 199 The role of informal community resources in supporting stable housing for young people recovering from mental illness: key issues for housing policy-makers and practitioners

1. Explanatory statement

Tenancy support programs are prevention and early intervention initiatives aimed at preventing people at risk of eviction from losing their tenancy and becoming homeless. Typically the programs are short term and provide financial relief in the form of bond loans and rental grants, subsidies and relief.

Activities which are common in the programs include: support to maintain property, education in roles and responsibilities of tenant and landlord, assisting with concessions for and establishment of utilities, information for tenant and advocacy on tenant’s behalf, monitoring of lease and payments, attendance with tenant at property inspections and intensive tenancy support.

2. A real world example

One example of a tenancy support program is South Australia’s Private Rental Liaison Program, which provides advice, referral and practical assistance to private renters to help them find a property, understand their rights and responsibilities as a private tenant and link them to relevant community and social supports. It also provides assistance with bonds, rent in advance and rent in arrears.

The program includes specialised Private Rental Liaison Officers (PRLOs), whose role is to act as brokers, mediators and, in some cases, managers in the rental relationship between tenants, landlords and real estate agents, in order to provide sustainable (i.e. stable and claim-free) housing options and solutions for their clients. Targeted on-going supports were also provided for six months to tenants supported by state bonds whose tenancies were ‘at risk’ of failure.

3. Scope of the practice

The South Australian Housing Trust 2015 annual report details that in 2014–15 the Private Rental Liaison Program received 1,330 referrals, with 1,267 customers meeting the eligibility criteria for the program.

To be eligible for the program, applicants must:

  • lack financial skills but have sufficient financial resources, and be willing to engage with the appropriate supports (e.g. financial counselling) to address their issues
  • experience socio-cultural issues and need advocacy or support to overcome difficulties with landlords or real estate agents
  • lack the social skills to negotiate with landlords or real estate agents
  • have no rental history
  • be renting through the supportive housing program, or renting public housing and seeking private rental accommodation.

In Victoria, the Housing Establishment Fund (HEF), jointly funded by the Victorian and Australian governments under the National Affordable Housing Agreement, provides financial help to eligible people with a housing-related hardship. People apply through a community organisation to the Fund for a range of assistance measures including bond loans, rent in arrears, rent in advance and emergency accommodation.

The HEF also provides property and tenancy management; initial assessment and planning; housing information; referral to other homelessness and allied services; and housing advocacy to people who are homeless or at risk of homelessness.

4. Effectiveness/impact

While it is not possible to isolate the costs of the Private Rental Liaison Program, the SA Housing Trust 2014–15 annual report records that the cost of providing Private Rental Assistance (i.e. providing financial assistance such as bonds and rent grants, information, referral, advocacy and counselling to eligible households in the private rental market) was $33.3 million. This cost included $19.7 million paid out in grants, bonds and subsidies. However, $9.6 million was returned (which included the repayment of grants and bonds), which meant the total cost of the Private Rental Assistance program was $23.7 million.

Of those clients who applied for the program, 548 customers (43.2 per cent of eligible customers) successfully secured a private rental dwelling housing under the guidance of a Private Rental Liaison officer. If part of the rationale for the program is to divert people off public housing waiting lists then the program can be seen as effective.

Staff from South Australia’s Private Rental Liaison Program have identified a number of barriers limiting the program’s effectiveness, including:

  • absence of affordable rental housing, which requires sending clients into marginal accommodation/tertiary homelessness in (often overcrowded) sharing arrangements, boarding/rooming houses and caravan parks.
  • discrimination, stigma and stereotyping, especially for Indigenous Australians, clients with a refugee background, survivors of domestic violence and clients living with a disability (in particular a mental health condition).
  • lack of appropriate built form housing, especially for large family groups, cultural obligations or disability needs.
  • Lack of clients’ ‘rental readiness’. The program was not resourced to provide wrap-around services and saw clients with high and/or complex needs as needing social housing accommodation.
  • limited security of tenure (a standard 6 or 12 month lease has health and wellbeing impacts for many clients, especially older clients).
5. Guide to evidence

Evidence on the effectiveness of tenancy support programs is found in AHURI Final Report no. 263 The role of private rental brokerage in housing outcomes for vulnerable Australians.

1. Explanatory statement

As young people leaving state care are particularly vulnerable to becoming homeless, a Rent Subsidy Scheme could help them with rent during this transitional period. The scheme is a rent subsidy to ensure all young people leaving state care would pay no more than 25 per cent of their income for their housing up to the age of 25. The scheme could work in conjunction with Commonwealth Rent Assistance if the young person is eligible for that payment.

The scheme would give young people more reasonable accommodation choices and help them to avoid poor quality accommodation that, due to affordability or availability issues, is far from educational and employment opportunities.

2. A real world example

While no such Rent Subsidy Schemes are in practice the need is clear as seen in the number of young people leaving state care each year.

Over, 43,300 children and young people (aged 17 years or younger) were deemed by government to be at risk and were in formal out-of-home care at 30 June 2015. In that year about 3,700 young people aged 15 to 17 were discharged or, having turned 18, ‘aged out’ of the care system, a process marked by an abrupt transition from formal out-of-home care to independence. This abrupt ending of support is in contrast to many other young Australians who receive ongoing support from family and guardians—around one third are living at home well into their 20s; their transition to independent living can take up to 15 years.

A 2008 research survey found that 42 per cent of 1,689 people who had experienced homelessness before the age of 18 had previously been in the state care and protection system. Such findings suggest that the government, as the corporate parent, often fails in its duties to young people as they leave state care and try to manage moving into independent accommodation, leaving school, trying to find work or other means of support and becoming independent.

3. Scope of the practice

Currently there are no Rent Subsidy Schemes in operation.

4. Effectiveness/impact

The cost of failing to help young people after they leave state care is significant. If they become homeless their costs to government are estimated at around $12 000 per year per young person, or $738 741 over a lifetime (in 2010 dollars) if they reach the average Australian life expectancy. These costs are associated with people experiencing homelessness as they have poorer physical health and report higher rates of substance abuse problems when compared to their peers.

A rough estimate of the cost of running a Rent Subsidy Schemes is presented in Table 4.

Table 4. Rent subsidy scheme costs for single person, with no children, aged between 18 and 21 years and 22 - 25 years.
Single person, with no children, aged 18 to 21 years Single person, with no children, aged 22 to 25 years

Youth allowance income per week (at September 2016)

$216.60 per week

(paid as $433.20 per fortnight)

$263.50 per week

(paid as $526.30 per fortnight)

Maximum weekly rent to be paid—being 25% of income

$54.15 per week

$65.87 per week

Rent per week of 1 bedroom flat

$200 per week

(common figure for bottom of range in Melbourne rental market 2016)

$200 per week

Weekly cost of Rent Subsidy Schemes benefit

$200 – $54.15

= $145.85 per week

$200 – $65.87

= $134.13 per week

Annual cost of Rent Subsidy Schemes benefit

$7,584.20 per year

$6,974.76 per year

As can be seen, the $7,584 per year cost of the Rent Subsidy Schemes benefit is just over half (55.7%) the $13,600 per year (in $2015) cost of providing services to a homeless person.

5. Guide to evidence

Evidence on the proposal for Rent Subsidy Schemes is found in AHURI Final Report no. 147 Pathways from out-of-home care.

Background to the policy issue

People experiencing homelessness are not one homogenous group. Homelessness is caused by a combination of individual risk factors (including domestic and family violence, substance misuse, mental health issues, unemployment and a history of contact with institutions) and structural factors (such as weak labour markets, poor housing affordability and the demographic characteristics of certain geographical locations). Both individual and structural factors need to be addressed in key homelessness policy and strategies to effectively address homelessness.


The vast majority of people who experience homelessness will have only a brief episode and it will occur only once. Their homelessness may be caused by events such as sudden unemployment, illness, or family breakdown. For individuals without behavioural issues, the risk of becoming and remaining homeless is more closely tied to the condition of local housing and labour markets. The chance of becoming homeless is greater in regions with higher median rents and slack labour markets.

In contrast, chronic homelessness is defined as ‘an episode of homelessness lasting six months or longer or multiple episodes of homelessness over a 12-month period or greater'.

15 - 25%

of the homeless population in developed countries is chronically homeless.

People who experience chronic homelessness are likely to have ‘complex needs’, experiencing one or more of a range of mental and physical health issues including a history of abuse or trauma, addictions and literacy problems. For those with risky behaviours—drug use and alcohol dependence—the impact of housing and labour markets are uniform across these risk groups, suggesting it is less influential in determining homelessness.

Cost to governments of providing services

Services are still largely funded individually, and it is difficult to obtain a measure of the whole of government cost of providing support. Nevertheless, research estimates that in 2010–11 supported accommodation services cost Australian state and territory governments around $4,890 per client. These services, which were delivered by non-government organisations, included crisis accommodation for individuals and those with accompanying children, as well as more generic services to help people who are homeless or at risk of homelessness deal with underlying issues such as alcohol and drug abuse.

These homelessness programs do bring cost benefits for governments. For example, being in supported accommodation reduces health, justice and welfare costs for single women by $8,920. This more than offset the cost of homelessness support and potentially provides a net saving to government of around $4,030 per (single woman) client.

AHURI research incorporating the Australian Homelessness Funding and Delivery Survey found that government provided 84.6 per cent of recurrent funding received by Specialist Homelessness Services (SHSs) (i.e. services funded through targeted Commonwealth and state and territory government homelessness programs) and 60.6 per cent of funding for non-SHSs.

The survey also revealed that current levels of funding are estimated to be below levels required to meet client demand for homelessness services, with only about one-third (35.3%) of surveyed services able to meet 90 per cent or more of client demand. The services also revealed that they suffered high levels of funding instability, with 22 per cent of services reporting significant changes in funding between 2011–13 and 2013–15. Funding instability was more prominent among non-SHSs.

Other benefits of homelessness support services

Although there are economic benefits for the community, most importantly homelessness support services have an essential role in delivering better living outcomes for vulnerable people. The WA Department of Housing showed that 91 per cent of people who accessed a homelessness support service (between May 2010 and June 2011) were still housed 12 months later.

AHURI research also revealed that of people who were case managed by a homelessness support service (including single men, single women and tenancy support clients), 38 per cent believed that without help they would have ended up as primary homeless (e.g. sleeping rough); 17 per cent would have had poorer mental/ emotional health outcomes; 11 per cent would have had poorer physical health; and 10 per cent believed they would be dead.

Current research

The AHURI Inquiry into the funding and delivery of programs to reduce homelessness has released its three supporting research papers.

The Inquiry is providing evidence on the mix of government and non-government direct and indirect funding in the homelessness service system and across mainstream services and enterprises that support the homeless, including Indigenous people experiencing homelessness.

Relevant AHURI research

Homelessness and housing solutions