A Prescription for Healthy Housing

4 min read

Developers, like renown bank robber Willy Sutton, naturally go where the money is. Yet for far too long, one place they have not been able to go as a potentially huge source of money to create quality affordable housing has been health care. That may be changing, and for the better.

Anyone who has spent time around the housing in which millions of low and moderate income Americans live knows intuitively that there is a strong link between poor living conditions and poor health. Lead paint, mold and other contaminants that cause or exacerbate asthma, rodents, and a whole host of other indoor environmental hazards are a significant contributor to bad health among low income families, and particularly among children.

For the most part, however, capital to remove these hazards from millions of living units in order to create healthy living environments has been pigeon-holed as a housing finance issue, separate from our spending on healthcare.

Encouragingly, more recently a number of academics, policymakers and public officials have recognized that renovating rundown housing to a higher quality condition is one of the best and most cost effective ways to prevent vast amounts of avoidable health care spending on poor children and families.

Medicaid – which provides access to health care for over 70 million of the poorest Americans – now tops $500 billion annually in spending. Yet no one knows precisely how much of that spending is on health care costs attributable to children ingesting lead, or suffering chronic lung afflictions due to indoor conditions at home, or coming down with serious illness simply from living in a perpetually cold and drafty apartment. Most studies to date of the benefits of removing hazards from housing have focused on a single source of illness and rarely followed through to account for the full range of benefits from a healthy housing makeover.

But one authoritative analyst summarized the results after comparing health outcomes for over 800 individuals, some of whom moved into housing renovated to a “green and healthy” standard: “We found that housing conditions and self-reported physical and mental health improved significantly in the green healthy housing study group compared to both the control group and the dilapidated public housing from which the residents moved, as did hay fever, headaches, sinusitis, angina, and respiratory allergy.”

Similar results in reducing bad health among the poor, and thereby lowering costs to the Medicaid healthcare system, were found when homeless individuals were able to access healthy housing. One study in Denver illustrated the magnitude of savings, finding that “housing chronically homeless individuals in supportive housing resulted in an average of $31,545 of emergency services savings per person over two years.”

If the potential savings from improving housing quality are so great, why can’t doctors simply write a prescription for an apartment renovation? For over 20 years, for example, doctors at Boston Medical Center have recognized that homelessness is bad for health (and that many homeless people were high cost users of emergency room services) and teamed up with lawyers to keep low income families from ending up on the street.

The passage of Obamacare – the Affordable Care Act – has opened the door to the potential for shifting some healthcare funding to be directly used to renovate and improve housing to a healthy standard and thereby capture substantial savings.

As highlighted by an excellent analysis from the National Housing Conference, New York has begun an innovative set of reforms designed to generate over $8 billion in Medicaid savings over five years for the state. The state further decided to couple this effort with the creation of a Supportive Housing Initiative employing over $300 million of those savings to create affordable supportive housing for individuals with expensive health needs, especially homelessness.

The New York approach, however, is both virtually alone among states, and one that requires a Rube Goldberg-like work around to a basic ongoing barrier within Medicaid – no matter how determined a state may be nor how much evidence there is that suggests large savings would result, Medicaid funds cannot be reallocated to the bricks and mortar renovation of illness-inducing housing into green and healthy housing.

The housing community has only barely begun to focus on the potential capital trapped within the healthcare system. That effort needs to be spread widely and ramped up rapidly.

David M. Abromowitz is a nationally known affordable housing attorney at Goulston & Storrs.