By Laurence Boone, BorisCournède, OECD Economics Department;and MarissaPlouin,OECD Directorate for Employment, Labour and Social Affairs
Following a period when homelessness rose in many countries, the onset of the COVID-19 pandemic prompted governments across the OECDareato provide unprecedented public support – including to the homeless. In theUnited Kingdom, for instance, people who had been living on the streets or in shelters were housed in individual accommodations in a matter of days. And in cities and towns across the OECD, public authorities worked closely with service providers and other partners to provide support to the homeless that had previously been considered impossible.
How cancountriesbuild on this momentum andensure more durable outcomes? The experience of Finland over the past several decades – during which the country has nearly eradicated homelessness – provides a glimpse of what can be possible with a sustained national strategy and enduring political will.
The number of homeless people in Finland hascontinuously decreasedover the past three decadesfrom over 16 000 in 1989to around 4 000,or 0.08% of the population(Figure 1). This is a very low number, especially considering that Finland uses arelativelybroad definition of homelessness, whereby in particular itincludespeople temporarily living with friends and relativesin its officialhomelessness count.In 2020, practically no-onewassleeping rough on a given night in Finland.
Figure1. Homelessness has shrunk remarkably in Finland
This is undoubtedly a remarkable success, even if comparing homelessness statistics across countries is fraught with difficulties (OECD, 2020).Many homeless peoplelive precariously,with the implication that statistical tools such as household surveys typically fail to accurately measuretheir living conditions.Furthermore,countries definehomelessnessvery differently, for instance counting people who temporarily livewithfriends or relativesas homeless(as Finland does) or excluding them from homelessness statistics.Whilethere is no OECD-wideaverage against which tocompare Finland’s homeless rateof 0.08%,other countrieswith similarlybroad definitions of homelessness provide points of reference, such as neighbouring Sweden(0.33%)orthe Netherlands (0.23%).1
Finland’s success is nota matterofluckor the outcome of “quick fixes.”Rather, it isthe result of a sustained, well-resourcednationalstrategy, driven by a “Housing First” approach, which provides people experiencing homelessness with immediate, independent, permanent housing, rather than temporary accommodation(OECD, 2020). A key pillarof this efforthas been to combine emergency assistance with thesupply of rentals to host previously homeless people, either byconvertingsome existing shelters into residential buildings with independent apartments (Kaakinen, 2019)or by buildingnew flatsby a government agency (ARA, 2021).Buildingflatsis key:otherwise, especially if housing supply is particularly rigid, the funding of rentalscanrisk drivingup rents(OECD, 2021a), thusreducingthe “bang for the buck” ofpublic spending.
The Finnish experience demonstrates theeffectiveness of tacklinghomelessness througha combination of financialassistance, integratedand targetedsupport servicesandmore supply: usingjust oneof these leversisunlikely to work.Financial assistance comes from the social benefits systems, which includes a housing allowance for low-income people (mostly jobless persons with no or low unemployment benefits)covering about 80% of housing costs(Kangas and Kalliomaa-Puha, 2019).Emergency socialassistance fundingcan complementthe housing allowanceif it is insufficient. Social services provide housing before other interventionsthataretargeted to beneficiaries’ needs(such as,topickone example,providing health services to help overcome substance abuse).These efforts requiredwellings: investment grants by Finland’s Housing Finance and Development Centre financed the construction of 2 200 flats over 2016-19 for long-term homeless people (ARA, 2021).Indeed, investing in housing development should be a priority for OECD governments as they navigate the recovery from the crisis: over the past two decades, public investment in housing developmenthas dropped to just 0.06% of GDP across the OECD on average(OECD, 2021b).
Another important driver of Finland’s success is the integration of efforts to fight homelessness with other parts of the social safety net. Whena housingneed is identified in any part of the social service system, housing is provided first,toprovide a solid basis foremployment, long-term healthand/or family assistance(OECD, 2020).This integrated approach avoids the pitfalls that can arise,for instance,when benefits are preconditioned onhaving an address, or when obtaininga flat requiresaminimum income. There are indications that, by facilitatingtheintegration of previously homeless people in society, the upfront Finnish investmentthat provides people withhousingfirst,pays off by reducing subsequent costs incurred by social services.Evaluations point toannualsavingsin public expenditure in the range ofEUR 9 600-15 000per personwhohadpreviouslyexperiencedhomelessness(Y-Foundation, 2017; Ministry of the Environment, 2011).
Overall, Finland’s achievements illustrate the benefits of integration, balanceand continuity in policies totacklehomelessness:integrationacrosshousing andsocial assistance programmes,balancebetween demand and supply, andpoliticalcontinuityover time have helped to maximise the results of the country’s investment toendhomelessness.Not only has this approach resulted in a steady decline in homelessness, but it has also made the system more resilient to shocks, includingthe COVID-19crisis. Indeed, the pandemic was less of astrainto Finland’s homeless support systemcompared to other countries, given that many vulnerable people were already housed and supported in individual flats (FondationAbbé Pierre – FEANTSA, 2021).
Theselessonscan be transposed to otherOECDcountriesas they look to build on the momentum and lessons learned from the COVID crisis.
References
ARA (2021),Report 2021: Homelessness in Finland 2020,The Housing Finance and Development Centre of Finland (ARA).FondationAbbé Pierre – FEANTSA (2021),Sixth Overview of Housing Exclusion in Europe, FEANTSA – Abbé Pierre.
Kaakinen, J. (2019), “Time to act:Let’s end homelessness for good,” OECD Forum Network Series on the New Societal Contract.
Kangas, O. and L. Kalliomaa-Puha(2019), “ESPN Thematic Report on National Strategies to Fight Homelessness and Housing Exclusion: Finland”, European Social Policy Network (ESPN), European Commission, Brussels.
Ministry of the Environment (2011), Asunnottomuuden vähentämisen taloudelliset [Economic effects of reducing homelessness], Ympäristöministeriön.
OECD (2020),“Better data and policies to fight homelessness in the OECD”, Policy Brief on Affordable Housing, OECD, Paris,http://oe.cd/homelessness-2020.
OECD (2021a),Brick by Brick: Building Better Housing Policies,OECD, Paris.
OECD (2021b),OECD Affordable Housing Database, indicator PH1.1, OECD, Paris.
Pleace, N. et al. (2021),European Homelessness and COVID 19, European Observatory on Homelessness.
- The data for Finland refers to 2020 and comes from ARA (2021). The data for the Netherlands, New Zealand and Sweden refer to 2018, 2018 and 2017 and come from the OECD Affordable Housing Database, Indicator HC 3.1
