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The real cost

Foreclosures and homelessness impose significant financial and social costs on cities, states, and the country as a whole. These costs encompass direct expenses, such as emergency services and housing programs, as well as indirect impacts, including lost tax revenue and increased healthcare expenses.

Costs to Cities

Emergency Services

Cities often bear the brunt of the immediate costs associated with homelessness. Emergency services such as shelters, emergency medical care, and law enforcement resources are frequently utilized by homeless individuals. For instance, a study by the United States Interagency Council on Homelessness found that chronically homeless individuals can cost cities between $30,000 to $50,000 per person annually due to their reliance on emergency services.

Housing and Social Services

Municipalities invest heavily in social services and temporary housing solutions. Programs aimed at preventing homelessness or rehousing individuals can be costly. For example, the cost of operating homeless shelters in large cities like New York can amount to several hundred million dollars per year. In 2019, New York City spent nearly $3 billion on homeless services

Costs to States


Homeless individuals often have higher rates of chronic health conditions and mental health issues, leading to increased healthcare costs for states. Medicaid spending is significantly higher for homeless populations. A report by the National Alliance to End Homelessness highlighted that states like California spend billions annually on healthcare costs related to homelessness

Housing Programs

States fund various programs aimed at reducing homelessness, such as affordable housing projects and rental assistance programs. These initiatives require substantial financial resources. For instance, California allocated $1 billion in its 2020 budget for homelessness prevention and assistance programs

Costs to the Country

Economic Impact

Foreclosures and homelessness can lead to broader economic consequences, including reduced consumer spending and lower economic productivity. The housing market instability caused by foreclosures can affect national economic growth. According to the Joint Center for Housing Studies at Harvard University, the foreclosure crisis following the 2008 financial collapse led to a significant economic downturn

Social Services and Safety Nets

The federal government spends billions on social safety nets designed to support homeless individuals and those at risk of homelessness. Programs such as the Housing Choice Voucher Program (Section 8) and various HUD initiatives are crucial but costly. The annual federal budget for homelessness-related programs exceeds $6 billion

Lost Tax Revenue

Homelessness and foreclosures result in lost tax revenue from property taxes, income taxes, and sales taxes. When properties are foreclosed and left vacant, they do not contribute to local property tax revenues. Additionally, homeless individuals often lack stable employment, reducing their contribution to income taxes.


The costs of foreclosures and homelessness are extensive and multifaceted, affecting local, state, and national economies. Addressing these issues requires substantial financial investment in preventive measures, healthcare, housing, and social services. Long-term solutions, such as increasing affordable housing and providing comprehensive support services, are essential to mitigate these costs and improve overall societal well-being.

By investing in effective strategies to prevent and address homelessness and foreclosure, governments can reduce these financial burdens and enhance the quality of life for all citizens.

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