Supporting Healthier Societies Through Housing

By: Tony Bertoldi, Chief Executive Officer

When considering the most significant expense categories for Americans, it would be expected to find housing and healthcare ranked highly, if not at the top of the list. Each of these sectors typically represents between 15% and 18% of the U.S. Gross Domestic Product (GDP) expenditures. While they are not traditionally viewed as belonging to the same category, there exists a noteworthy connection between them, particularly in the context of affordable housing and its positive influence on healthcare outcomes. This influence includes significant cost savings for the broader healthcare system, as well as taxpayers.

Amid ongoing reductions to public welfare and healthcare funding at the federal level -including proposed cuts to Medicaid, the Centers for Disease Control and Prevention (CDC), and other essential programs - millions of Americans face increased barriers to both stable housing and adequate healthcare. These policy shifts make the case for investing in affordable housing as a health strategy even more urgent, as vulnerable populations are at greater risk of poor health outcomes and higher public costs when safety nets are weakened.

In chapter four of my book, American Dream Come True, I open with the story of Gerard McCarthy, a Marine veteran who experienced housing insecurity before finding stable housing through the HUD-VASH program. His new living environment not only provided shelter but also included onsite healthcare services, significantly enhancing his quality of life. Gerard's story underscores an often-overlooked benefit of affordable housing: improved access to healthcare.

This example illustrates how affordable housing can lower healthcare costs by providing stability to vulnerable populations, such as low-income families, veterans, seniors, and people with disabilities. These groups are statistically more likely to require expensive emergency or long-term medical care if they lack stable housing.

Key points in the discussion of housing and healthcare include:

• Stable housing = better health: A clear example of this can be seen in the mental health challenges faced by children who lack stable housing. These challenges often hinder their ability to focus in school, build relationships, and establish the consistency necessary for their development. Additionally, children without stable housing are more likely to become ill or lag in their development compared to their peers. This situation marks the beginning of the cycle of poverty, from which it is difficult to escape.

  
  

• Better health = lower public costs: When fewer individuals rely on emergency services and hospital visits due to chronic conditions exacerbated by homelessness, taxpayers save money. Access to safe and affordable housing, especially when coupled with the availability of a service provider to assist residents in navigating the healthcare system, reduces healthcare costs. When individuals have stable housing, they are more likely to seek healthcare services early and have a suitable place to recuperate. According to the National Health Expenditure Accounts (NHEA), U.S. health care spending grew by 7.5% in 2023, reaching a total of $4.9 trillion, which equates to $14,570 per person. This figure serves as an average when compared to a 2016 study by the National Alliance to End Homelessness. That study calculated the total societal cost for an individual experiencing chronic homelessness - including social services, medical care, and mental health services - amounted to approximately $35,000 per year for American taxpayers. Given that this data is from 2016, it is important to consider how that cost may have evolved in nearly a decade.

  
  

• The cost argument is compelling: The point presented above leads us to a clear cost benefit. It’s far cheaper to provide housing (let’s say $16,000/year for a 2-bedroom apartment) than to continue covering the medical and societal costs of homelessness.

  
  

• Private sector alignment: Health insurance companies are increasingly recognizing the value of investing in affordable housing. By supporting initiatives like the LIHTC program, these companies can reduce their long-term costs. In plain terms, less illness means fewer claims. This strategic investment not only benefits the insured but also helps insurance providers lower their financial risk and expense.

Ultimately, investing in affordable housing is a health strategy. Recognizing that housing conditions have a substantial impact on health outcomes, it becomes clear that stable housing offers benefits that go beyond simply providing shelter. This highlights the critical need for more housing, particularly affordable options made possible through The Housing Credit.