It is generally accepted that it costs the State of Illinois between $40,000 and $70,000 a year to keep a person with mental illness in a nursing home, while the cost of high quality PSH is only about $20,000 per person. Medicaid also regards nursing home placements for younger people with mental illness as substandard care, and so will not reimburse the State for its cost. Illinois, then, must bear those costs alone. Comparatively, Medicaid will reimburse the state for the costs of PSH on the same bases as other medical treatments.

The Supportive Housing Providers Association recently found that it costs the State of Illinois $116 per day to keep a person with mental illness in a nursing home, while keeping the same person in permanent supportive housing costs only $27 per day. With 17,000 people with mental illness in nursing homes in Illinois, the need for PSH is clear.

In addition, a recent study by the National Governors Association Center for Best Practices compares the cost of PSH to the costs of other typical types of housing for people with mental illness. PSH is better therapeutically and is also significantly cheaper than the alternatives. The report entitled Supportive Housing for People with Mental Illness: Regaining a Life in the Community is well worth reading.

Permanent supportive housing also results in cost savings for other public services. Recently the Heartland Alliance conducted a large study comparing permanent supportive housing to the typical disorganized mix of shelter and haphazard care. The study found that Illinois saw an overall 39% cost reduction in the use of public services, such as inpatient mental health care, nursing homes, and criminal justice, over a two-year period after a sample of 177 individuals were moved into supportive housing. The shrunken need for public services yielded a total overall cost savings of more than $850,000 – an average savings per resident of $2,400 per year.

Mental illness is the leading cause of disability among people ages 18 to 44. Because of this, many people with mental illness in typical settings are unable to work and have to rely on Supplemental Security Income (SSI) a part of the Social Security system. But SSI isn’t enough to live on.

In their biannual study of housing for people with disabilities, Priced Out in 2008, the Technical Assistance Collaborative found that in Illinois SSI monthly stipends were $637, while at the same time the typical one bedroom apartment in the Chicago metro area rented for $893 per month. So a person living on SSI must pay 140% of their income in rent – an obvious impossibility. The Technical Assistance Collaborative puts it this way: “The general shortage of affordable rental housing hits with particular virulence at people with disabilities. Federal and state support for people with disabilities provides them with incomes far too low to access most decent market rate housing.”

Supportive housing provides subsidized rent control. A person in a permanent supportive housing apartment pays 30% of his or her monthly income in rent, so the person on SSI would pay only about $200 per month. The rest is subsidized by various units of government. Those rent subsidies are included in the cost savings mentioned in the previous section. Unfortunately, there is almost no PSH facilities in the northwest suburbs of Chicago. The few facilities available are concentrated in Chicago and near Lake Michigan. However, even those places report waiting lists between three and five years long.

So what is the impact of this lack of permanent supportive housing?

One Task Force member put it this way, in a letter from November, 2009:
”It sounds like wonderful things are coming together and I hope that someday, this will provide some shelter, safety and nurturing for my daughter and others like her. The struggles she continues to endure are mostly because of the housing shortage and absence of continuity of care. She is a breath away from being homeless and the strain of each day not knowing, each day not understanding who is responsible for her psychiatric needs, her med management, each day being as bleak and without answers as one could possibly imagine, has rendered our family broke, broken and without direction.”

Our task force advocates for families like these every day to provide PSH solutions.