HUD Report cover costs and benefits

The City of Chicago’s HomeMod Program provides home modifications for low- and moderate-income people under the age of 60 who have disabilities. With funding from the Department of Housing and Urban Development, Woodstock evaluated the program to determine whether the home modifications might save more in avoided future costs for services, such as home health aides or nursing home care, than the upfront costs of the modifications.

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Woodstock Institute occasionally undertakes contract analysis work for clients and projects compatible with our mission. That was the case for an analysis done for HUD’s Office of Policy Development & Research.

Summary of Findings

  • The average cost of the modifications was between $12,200 and $15,150 per unit.
  • The estimated benefit in cost savings from the reduced use of services for three years was between $7,427 and $8,891 per program participant.
  • Based on those estimates, if between 2.5 and 4.6 percent of program participants defer moving to an assisted living facility for five years, or between 0.5 and 1.0 percent of program participants defer moving to a nursing home for a period of eight years, the program would save the government more in costs avoided than it paid for the modifications.

The findings suggest that the HomeMod Program likely saves the government money over time, even when considering only a limited range of benefits. The analysis does not include additional savings on medications or other medical expenses, nor does it include the value of direct benefits, such as increased safety or independence, to the participants.

Understanding the benefits of the HomeMod Program go beyond whether the program itself saves the government money. The population is aging, and, as people age, they are more likely to have or develop a mobility impairment. Making homes suitable for people with mobility impairments will address the drastic shortage of accessible units. Unless the supply of accessible units is increased, more people with disabilities will need to move to assisted living facilities or nursing homes in the near future.