Perspective: Short-term financial assistance outshines PSH/quick-build approaches to homelessness

Louis V. Gerstner Jr.—chairman of a NY philanthropic fundraising nonprofit—has seen firsthand how temporary financial aid programs are a cheap and effective way to keep folks from falling into the poverty cycle, tackling homelessness before it's an issue. Contrarily, putting unhoused people in shelters (whether long-term or quick-build, as advocated by SJ mayor Mahan) can cost taxpayers over 100x more. Gerstner Jr.'s analysis in the Wall Street Journal.

Shelter services for a family in New York City cost $191 a day, or nearly $70,000 a year, according to the mayor’s office. That adds up to a total annual cost of $1.2 billion. And the problem isn’t limited to big cities. Vermont has the nation’s second-highest rate of homelessness per capita and spent more than $140 million addressing homelessness in 2022.

The best way to help is by preventing homelessness in the first place. Gerstner Philanthropies has spent more than $36 million on a program called Helping Hands. It provides small amounts of money to help otherwise stable people overcome short-term emergencies and stay out of shelters. Over the past decade, we have helped more than 22,000 households for an average cost of $1,023.

We distribute funds to nonprofit organizations that are trained to identify people who have an emergency that could start them on the cycle of poverty, shelters and homelessness. Often our grants are sufficient to prevent a family from entering a shelter. Sometimes, they are combined with additional sources to resolve the emergency fully. In all cases, clients receive support services and counseling to ensure they have a path toward long-term stability....

For $1,467, both recipients and their children avoided entering the shelter system. Had they entered a shelter in New York City, it would cost the city’s Department of Homeless Services an estimated $140,000 to house them for a year.

Our program focuses on a small group of people—those who have been pushed to the brink of homelessness by unforeseen hardships and limited resources. It won’t solve the shelter problem, but it will prevent some people in need from spiraling into poverty, saving public money in the process.

This article originally appeared in the Wall Street Journal. Read the whole thing here.

Read more local perspectives on SJ’s quick-build vs. PSH debate here, here, and here.

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