A new study makes the case that permanent supportive housing dramatically reduces health-care costs and saves taxpayers’ money.

The latest findings come at The Apartments at Bud Clark Commons, which has been home to some of Portland, Ore.’s most vulnerable residents since 2011.

There, researchers found that health-care expenses, including emergency room visits and hospitalizations, declined by about 46 percent in the first year after a resident moved into stable housing and continued to fall in the second and third years after moving in, reports the Center for Outcomes Research and Education at Providence Portland Medical Center.

The study looked at 99 residents at Bud Clark Commons, a 130-unit permanent supportive housing project that's a partnership of the Home Forward, Multnomah County, Portland Housing Bureau, and Transition Projects. The development is one of many Housing First/harm reduction-based programs across the country. This model prioritizes housing for the homeless and does not screen out residents who are struggling with addiction.

Prior to moving into Bud Clark Commons, residents were homeless, with many having complex health issues. They were high scorers on an assessment that measures vulnerability, says Rachael Duke, supportive housing program director at Home Forward, the largest affordable housing provider in Oregon. The development, which has a pretty even mix of men and women, is the group’s first Housing First project.

Residents typically receive medical services off site in the community. They are also offered a variety of critical programs, including mental and behavioral health services, on site. The staff includes case managers and a resident community services coordinator, says Duke.

In the year prior to moving into Bud Clark Commons, residents on Medicaid averaged total health-care costs of $1,626 per month, about 3.6 times more than the average Medicaid member.  In the year after moving in, average costs fell to $899, a 45 percent decline, report researchers. Total Medicaid cost reductions were more than $500,000 in the first year.

The study indicates the average resident saw a reduction of $8,724 in annual claims, a significant amount of the estimated $11,600 to house a resident at the development. Additionally, the reduction in claims was maintained into and beyond the second year of residency, suggesting that supportive housing has an ongoing impact on health-care costs.

The findings also make the case that health-care reformers would be well served to think about the relationship between housing and health, particularly for vulnerable populations. Studies at other Housing First communities have shown a similar drop in health-care expenses.

“The results of this study reinforce what we already know about what impacts an individual’s health outcomes,” says Janet Meyer, CEO of Health Share of Oregon, a communitywide health-care partnership. “You can’t begin to help someone get their chronic health conditions under control when they’re living in a doorway or under a bridge. Stable housing, along with other social determinants such as adequate food and transportation, is critical in improving outcomes by helping to manage chronic health conditions.”

Bud Clark Commons also recently was honored as a 2014 AIA COTE Top Ten Green Project and was featured by Hanley Wood's EcoBuilding Pulse. To read more about the development's green features, visit  www.ecobuildingpulse.com/awards/aia-cote-top-ten-bud-clark-commons.aspx?dfpzone=general.

Connect with Donna Kimura, deputy editor of Affordable Housing Finance, on Twitter @DKimura_AHF.