Life-Cycle Costs of Housing for the Mentally Ill

This paper estimates the life-cycle costs of housing for persons with mental illness using 5-year and 30-year holding periods and discount rates of 3.5, 5.75, and 8.0%. Life-cycle costs are between 5 and 7% higher in buildings occupied only by mentally ill tenants compared to buildings with no mentally ill tenants. However, the economies of scale in maintenance and repair that exist in buildings occupied by the non-mentally ill are not observed in buildings with mentally ill tenants. Additionally, buildings located in lower-quality neighborhoods have lower life-cycle costs when the tenants are mentally ill, just the reverse of the case for the general population.