Social Return on Investment of Mutual Support Based Housing Projects: Potential for Socio-Economic Cost Savings and Higher Living Quality

The aging of populations in the demographic change in many industrialized countries will lead to increasing costs of professional support and care for frail elderly. In order to lower the resulting financial burden for the social security system, reforms are necessary. New housing projects which foster mutual support among neighbors might contribute to solve this problem in the future. By decreasing the need for professional care and help such housing projects could lead to lower costs for the support of frail elderly. Our paper describes the results of a Social Return on Investment (SROI) analysis of four housing projects in Germany. Their common feature is the promotion of mutual neighbourly assistance and joint activities among neighbors, which are coordinated and encouraged by social workers. Moreover, elder residents´ daily life is facilitated by infrastructural characteristics, among these accessibility, common meeting rooms and open contact space. Our analysis is based on a survey among residents and is complemented by a businesslevel analysis. This approach enables us to collect data on the residents’ need for assistance, on how this assistance is provided, and on community life within the projects. Furthermore, we gather information on costs and yields resulting from the housing projects. To identify the effects of living in one of the projects, we compare our results to a control group of individuals living in conventional settings. We apply the method of propensity score-matching to determine differences in the need for care, the patterns of care provision, as well as cost differentials between the two groups. Our results point to substantial socio-economic cost savings induced the living conditions in the new housing projects. The costs for supporting elderly are lower than in conventional settings, which is partly due to better health conditions of the residents. These differences may to some extent be ascribed to mutual support by neighbors which is explicitly encouraged in these housing projects. Moreover, residents seem to be more active and rate living conditions more positively. As residents and the social insurance system currently seem to profit most from these cost savings, it would be important to compensate the non-profit-organizations which run the housing projects for the additional expenses incurred for promoting and facilitating mutual neighborly assistance.

Borgloh, Sarah and Peter Westerheide (2010), Social Return on Investment of Mutual Support Based Housing Projects: Potential for Socio-Economic Cost Savings and Higher Living Quality, ZEW Discussion Paper No. 10-029, Mannheim.