The cost of diverting refugee claimants from homelessness: a simple case study
(Updated May 29th, 2024)
More refugee claimants are coming to Canada, and they face a high risk of homelessness when they first arrive (see “Opinion: Refugee claimants in Ottawa need not be homeless” some discussion on this situation in Ottawa).
In a recent article published in The Conversation called “Canada needs a national strategy for homeless refugee claimants”, one of our recommendations was that:
Effective programs that combine transitional housing and wrap-around support for homeless refugee claimants should be systematically funded, scaled up and replicated. Many of these organizations have decades of experience and expertise. Our preliminary findings suggest that the cost per bed in these programs is significantly less than alternatives currently being used by municipal and federal governments, including homeless shelters and hotel rooms.
I want to pick up on one point here regarding the cost per bed for providing shelter and wrap around supports to newly arrived refugee claimants.
While there is going to be significant variation across organizations, I thought it would be helpful to provide a quick breakdown of our refugee services program costs at Matthew House Ottawa, which can be used as one example.
Here are our (unaudited) numbers for the first 9 months of 2023:
monthly cost breakdown
A few things to highlight:
· Highest cost was April at $1,114/month. Lowest monthly cost was September at $801.
· The majority of expenses fall into 3 categories, roughly broken down as follows:
o About 1/2 of the cost is staffing
o About 1/3 of the program cost are leases and utilities (we rent all of our houses)
o Food and supplies were about 10% of the total (note that we get some food donated, and residents in about half of our houses are able to cover their own food costs, both of which bring down the cost of food and supplies)
· Total cost for those 9 months was roughly $619k. With an average number of beds at 74 beds, average monthly cost per beds lands around $930/month.
In a recent oped in The Hill Times I referred to a bed (along with food and supports) at Matthew House Ottawa costing less than $1000/month. As you can see in the period covered above it was meaningfully less than that for most months.
How does this compare to the alternatives, such as hotels and emergency shelters?
I don’t have a lot of hard data on this (so if someone does please point me in the right direction), but my understanding is that:
emergency shelter beds cost between $90-$100/night in major cities (about $2700-$3000/month).
IRCC funded hotel rooms are costing $5000-6000 per month. I haven’t been able to confirm that number nor the number of people in each hotel room on average (both of which are needed to provide a comparable).
So, in short, the cost per bed at Matthew House Ottawa was about 1/3rd of the cost of an emergency shelter bed last year. Until we have more hard data on the costs of putting refugee claimants up in hotels, it is hard to compare. But unless the average is 5-6 people per hotel room, then the cost/bed look to be significantly higher in hotels as well.
Furthermore, a recent study has shown that homelessness leads to higher health care costs (double the average time and cost for hospital stays compared to people who are housed), so by diverting refugee claimants from homelessness we are also reducing costs of (as well as overall strain on) the health care system. And what we see with costs to healthcare system can be applied more broadly: Homelessness is expensive.
When you look at all of the alternatives (e.g. high costs of emergency shelters) and negative outcomes that are reduced/avoided (e.g. high costs to healthcare system), it becomes clear that programs like ours that divert refugee claimants from homelessness provide an excellent return on investment.
Please comment below or be in touch with Allan Reesor-McDowell at arm@matthewhouseottawa.org if you have any questions, comments, or relevant data.