People who receive emergency financial assistance are less likely to become homeless, a new study shows.

Homelessness has become an increasingly worrisome crisis in our nation over the past several years. The issue has reached such proportions in California, for example, that mayors of several major cities have declared a state of emergency on homelessness.

In response, leaders in California have invested billions in homelessness programs, including some that target prevention.

Prevention efforts, however, have led to questions—even from organizations committed to addressing homelessness—as to whether such programs are effective, due to the difficulty of targeting assistance to those with the greatest risk of becoming homeless.

To test the impact of providing financial assistance to those susceptible to losing their housing, researchers conducted a randomized controlled trial to evaluate the effect of emergency financial assistance (EFA) on families receiving support through the Santa Clara County Homelessness Prevention System, which is co-led by Destination: Home, a nonprofit organization dedicated to ending homelessness in Silicon Valley.

David Phillips, a research professor in the Wilson Sheehan Lab for Economic Opportunities (LEO) within the economics department at the University of Notre Dame, and James Sullivan, a professor of economics and co-founder of LEO, found that people offered EFA were 81% less likely to become homeless within six months of enrollment and 73% less likely within 12 months.

The study appears in the Review of Economics and Statistics.

The study evaluated individuals and families at imminent risk of being evicted or becoming homeless who were allocated EFA between July 2019 and December 2020, with the average household receiving nearly $2,000.

Recipients were chosen from among a larger group of people eligible for the program based on their vulnerability to homelessness and on a randomized system set up by LEO and Destination: Home. This temporary financial assistance helped pay rent, utilities, or other housing-related expenses on their behalf.

A common approach to fighting homelessness is to provide shelter to those who are already homeless, but the researchers argued that once a family or individual becomes homeless, they face even more difficulties—such as finding permanent housing, basic necessities, and health care. They are also more likely to become involved in the criminal justice system and experience frequent hospital visits. The study found that a preventive approach focusing directly on helping those who are on the brink of homelessness can also be effective.

Read the full article about homelessness emergency aid by Tracy Destazio at Futurity.