San Diego has a growing, silent crisis. The high cost of living in San Diego, combined with skyrocketing medical costs, is resulting in a growing population of homeless seniors. In fact, San Diego ranks third in the nation for the number of homeless, and seniors make up 25 percent of the local homeless population.
Living on the streets can be a scary experience for anyone, but for seniors who are often frail and with physical limitations, the experience is downright terrifying.
In 1987, funding for supportive housing was authorized by the federal government as a demonstration project under the Stuart B. McKinney Homeless Assistance Act. Seniors who qualify for supportive housing have low incomes, serious and persistent health issues, and were once homeless or at risk of homelessness.
The supportive housing model provides apartment-style living with personal care and wrap-around services to successfully transition at-risk seniors into a stable residential environment. At Senior Community Centers, we’ve proven this to be true — nine in 10 homeless clients transition into long-term housing with our assistance. The success rate is 86 percent for residents who have been housed for one year or more.
Supportive housing services typically include an on-site social worker, nutritious meals, health and wellness assessments, and programs, life skills training and other social services. The model is intended to be a pragmatic solution to help people live better lives while reducing the cost of care.
Supportive housing is a more cost-effective option to nursing home care for those seniors who do not require skilled nursing services. It also saves taxpayers money and is a sound investment for businesses and investment groups.
Major cost savings
A 2009 study by United Way of San Diego found the total cost of public services for one chronically homeless person for two years on the streets was $187,288. This, compared to $107,032 for two years in permanent housing with support services, was a savings of $80,256 or almost 43 percent.
The study found that chronically homeless individuals with a disability who are long-term or repeatedly homeless are the most costly and present the most complex challenges among the homeless populations.
A study by the Economic Roundtable in Los Angeles found that supportive housing reduces public costs by as much as 79 percent for those who are chronically homeless. The reason is the significant decrease in the use of emergency homeless shelters, hospitals, emergency room visits, jails and prisons. Homeless individuals disproportionately use shelters, emergency health care and public mental health services and often cycle through public institutions and facilities, at significant cost to taxpayers.
Why businesses should invest
Beyond the significant cost savings to the community and the altruistic reasons for investing in supportive housing, it is simply a sound investment. The market value of the senior housing and care industry is about $300 billion and growing. Economists note private and public investment returns in senior housing have outperformed other commercial real estate property investments in the past five years.
Supportive housing for seniors continues to be a resilient real estate sector even during the economic recession. In fact, three of the 10 largest REITs (real estate investment trusts) are now health care REITs. Further, unlike many other housing facilities, owners of permanent, supportive housing residences have the ability to secure additional funding from philanthropy.
Seniors are the fastest growing population on earth, with the number of seniors in the United States to reach historic numbers by 2020. According to the U.S. Census Bureau's "middle series" projections, the country’s elderly population will more than double between now and the year 2050, to 80 million.
As the senior population increases, so will the need for supportive housing, thus creating even more sound investment opportunities while ensuring a brighter future for vulnerable seniors.
Downey is president and CEO of Senior Community Centers, a nonprofit agency dedicated to keeping San Diego seniors healthy and independent. Learn more at www.servingseniors.org.