Finally, we are beginning to have numbers that show similar savings in Los Angeles. Last month, United Way of Greater Los Angeles released a case study report of four individuals that showed a 40% decline in public costs.

Economic Roundtable’s Where We Sleep report shows similar levels of savings, but with a much more comprehensive data set (including 10,000 recipients of General Relief in the County). This chart from the report shows how much public costs decline after someone is placed into supportive housing.

Average Monthly Public Costs for Persons in Supportive Housing and Comparable Homeless Persons

Source: Economic Roundtable, Where We Sleep, 2009

That’s a 79% reduction in average public costs. Even when accounting for the cost to provide permanent housing (average of $750 for capital and $352 for operational costs per month), there is a 41% decline in costs.

For years, studies around the country have shown similar cost savings; but a common response in Los Angeles has been, “well, we don’t know if that’s true for L.A.” (we are special here after all). With this evidence, what’s our excuse for not doing everything we can to provide permanent supportive housing for those who need it? Not only is it the right thing to do: it’s the smart thing to do.

Probably like most everyone, I personally know people who have lost their homes or are at serious risk of doing so. Besides the obvious financial drain, there are social and emotional costs of losing a home and having to move. The consequences are not just personal, of course, as declining property values mean reduced property tax revenue for local governments and the credit meltdown contributes to rising unemployment and overall insecurity in financial markets: a truly vicious cycle.

What surprised me most during the early stages of the meltdown was the, well, surprise with which policymakers, economic and financial “experts,” and the media reacted. It wasn’t as if plenty of researchers, analysts, activists and even some policymakers hadn’t been sounding alarm bells about the dangers of the housing boom. Even my 2004 dissertation highlighted the dangers of subprime lending for minority and low-income communities (further evidence that no one besides those who have to read those things…).

Now that things have (hopefully) stabilized somewhat, some are questioning whether the American-Dreamy promotion and prioritization of home ownership is in the best interest of society. U Penn Historian and Sociologist Thomas Sugrue had an interesting piece in the Wall Street Journal titled, “The New American Dream: Renting.” Sugrue traces how home ownership became so intertwined with American mythology:

The story of how the dream became a reality is not one of independence, self-sufficiency, and entrepreneurial pluck. It’s not the story of the inexorable march of the free market. It’s a different kind of American story, of government, financial regulation, and taxation.

We are a nation of homeowners and home-speculators because of Uncle Sam.

The mortgage interest tax deduction has helped subsidize increasing home ownership rates and suburbanization in the U.S., but also costs the federal government tens of billions of dollars in revenue. In a 2005 article in Shelterforce, Peter Dreier highlights the disparities in how homeowners and renters fare in help from the government:

Of the hundreds of tax breaks (what economists call “tax expenditures”) for corporations and individuals in the nation’s tax code, the largest are the subsidies for homeowners. The two major homeowner tax breaks cost the federal government almost $90 billion last year – $70.1 billion for the mortgage interest deduction and $19.3 billion for the property tax deduction – according to a report by the Congressional Joint Committee on Taxation. That would be ok if most of it helped middle- and working-class people. But it doesn’t. Those with the highest incomes and the most expensive homes (including second homes) get the largest subsidy.

Most Americans think that federal housing assistance is a poor people’s program. In fact, less than one-fourth of all low-income Americans (those who have Section 8 rental vouchers or who live in government-assisted developments) receive federal housing subsidies. In contrast, almost two-thirds of wealthy Americans – many living in mansions – get housing aid from Washington.

Even the sacred cow of mortgage deduction has come under attack and been subjected to possible revision by the federal government. Even though, having bought a town home several years ago, I benefit greatly from this federal subsidy, I have to agree with Thomas Sugrue that “if there’s one lesson from the real-estate bust of the last few years, it might be time to downsize the dream, to make it a little more realistic.” Or, I might add, at least make access to it a little more equal.