It costs society more than $10,000 per person per annum more to allow people to remain homeless than it does to provide them with “last resort” housing, such as in a caravan parks and boarding houses, a report from the Melbourne Sustainable Society Institute has found.

It is the first time a cost-benefit analysis has been done in Australia addressing the issue of sleeping rough. The analysis shows that providing one person with a last-resort bed would generate a net benefit of $216,000 over 20 years. That averages to a net benefit of $10,800 per year.

The report found that a 75% of those benefits flow to society and the remainder to the individual.

“For every $1 invested in last-resort beds to address the homelessness crisis, $2.70-worth of benefits are generated for the community over 20 years,” the analysis found.

“There is much to gain in economic and social terms, both for government and society, by assisting the homeless. This is because if homeless individuals find stable accommodation they require less healthcare and fewer emergency admissions, and they are less likely to be involved in crime, both as victims and perpetrators.

“They are more likely to reconnect with employment and education. Importantly, last-resort housing can greatly improve the quality of life of individuals.”

Prof Brendan Gleeson, a contributor to the report from the University of Melbourne, said the University’s Melbourne Sustainable Society Institute said homelessness was an issue central to the sustainability of cities.



“Vulnerable populations like homeless people and street sleepers are particularly exposed to sustainability problems like climate change,” Gleeson said.

“We are concerned about the evolution of Australian cities and the challenges they face. Obviously, homelessness is one of the biggest and most pressing problems we face. We thought that by commissioning this analysis, we could provide a firmer evidence-base for creating policies to respond to homelessness.”



Homelessness has been a particular issue in Melbourne, where recent months have seen the state government and city council grappling to address a growing number of rough sleepers.

The number of people sleeping rough in Melbourne’s streets has increased by over 70% in the last two years. Last-resort housing stock has decreased as land has been bought by developers, and as new regulatory requirements to improve housing standards has seen some social housing buildings sold.

In a bid to address this, last month the Victorian government announced it would use its borrowing power to act as guarantor for up to $1bn worth of low-interest loans to help registered housing associations secure new social and affordable housing stock.

Meanwhile, Melbourne City Council is accepting submissions in response to proposed changes to council laws that if introduced would see the belongings of homeless people removed from the streets. The council is struggling to cope with homeless camps around the city.

The proposed laws drew the attention of the United Nations this week, with the UN special rapporteur on the right to housing, Leilani Farha, saying it would lead to the criminalisation of homeless people.

“It’s bad enough that homeless people are being swept off the streets by city officials,” she said. “The proposed law goes further and is discriminatory – stopping people from engaging in life-sustaining activities, and penalising them because they are poor and have no place to live.”

But the City of Melbourne’s lord mayor, Robert Doyle, told radio 3AW on Thursday: “I take it the United Nations has successfully solved Syria, Afghanistan, Pakistan, most of Africa, Myanmar and now they can turn their attention to the bylaws of the City of Melbourne.”

In 2016 it was estimated that 250 people were sleeping rough in the city of Melbourne.