Social Impact Bonds and Housing First: A match made for Alberta?

Abstract

In Alberta, homelessness is a persistent social issue that affects over 8,000 people directly. Not only is this emotionally, physically and mentally taxing on the person experiencing homelessness, but it also takes its toll on the public purse. It is estimated that the cost of supporting a chronically homeless person can be as high as $100,000 annually when you take all of the publically provided services that are used. To address this problem, in 2009 Alberta initiated a 10 year plan to end homelessness in the province. This plan uses a Housing First approach, which focuses on providing housing before any other social supports, and has been proven to be a more cost effective way of addressing homelessness than the traditional model. While Housing First may reduce the cost of addressing homelessness, the Alberta Government is facing tightening budgetary restraints and a growing deficit due to the low cost of oil. Social Impact Bonds, a financial tool that can be used to harness private capital to fund public services, could provide the capital necessary to sustain these programs as the province weathers the economic recession.