Just as the size of the United States’ homeless population is difficult to calculate, assessing the economic and noneconomic costs of homelessness is a complex arithmetic. The direct economic costs include federal, state, and local government expenditures for housing, social services, public works, police and jails, food, and medical care. These government outlays are supplemented by private-sector expenditures by churches and other charitable institutions. In addition to money paid out, forgone economic opportunities enter into the costs of homelessness. Cities whose downtown streets are inhabited by homeless people, for example, forfeit sales tax and other revenue when homelessness leads to a decline in tourism or falling sales at local businesses.
The noneconomic costs of homelessness are both personal and social. Among communities, these include a degradation of the quality of life in public spaces where the homeless congregate. Among the newly homeless, the fiber of everyday life is entirely disrupted; dignity, choice, and ties to family and neighborhoods are lost. Those who remain homeless for long periods suffer a deterioration in mental and physical health, difficulties in finding and retaining employment, and a gradual alienation from everyday society. This chapter first looks at some of these costs, using San Francisco as an example. It concludes with a discussion of the cost of building housing for the homeless.