Pay For Success Initiatives Across CSH
Decades of research have shown that supportive housing reduces homelessness, carceral interactions, and the unnecessary use of crisis care like shelters or emergency rooms. Despite this strong evidence of positive impact and cost-effectiveness, there is insufficient funding for affordable housing and supportive services to meet the demand.
But thanks to the rising interest in impact investments which measure performance on a 'double bottom line' of social and financial impact, new strategies have emerged to help scale supportive housing. One of these strategies is called Social Impact Bonds or, more commonly, Pay for Success.
This approach pairs a performance-based contract with an upfront investment which has the potential to be re-paid based on the project's overall success. CSH has been at the forefront of using Pay for Success (PFS) as a strategy to scale supportive housing over the last eight years. We have participated in multiple PFS projects across the country, and each program has added to the evidence that supportive housing generates positive outcomes for both people and communities:
- In Massachusetts, Massachusetts Housing & Shelter Alliance, United Way of Massachusetts Bay and Merrimack Valley, and CSH introduced the nation's first PFS project focused on ending long-term homelessness. One thousand fifty-five individuals were provided housing, and 85% remained in housing or saw a "positive exit" to other permanent housing or more appropriate care after five years. The average savings in health care per tenant, with a significant shift from emergency and acute care to outpatient care, was $5,267 annually.
- In Denver, 346 people received supportive housing, and the evaluation showed that this group had a 40% decrease in emergency department visits, a 34% decrease in police contacts, a 40% decrease in arrests, and a 27% reduction in jail days compared to people who got usual services.
- In Santa Clara County, California, a group of 199 individuals who received housing through a PFS initiative were compared to a control group of 244 individuals who received usual care. Eighty-six percent of the participants randomized into supportive housing sustained it during the study period. Further, supportive housing reduced their use of shelter and psychiatric emergency departments.
- Denver has also recently launched its second PFS project, backed by federal funding through the Social Impact Partnerships to Pay for Results Act (SIPPRA), based on the strong results of its first project. Other regions like Los Angeles are also seeing positive results.
Final Report Recaps Results from Los Angeles Just in Reach Pay for Success Program
349 Individuals Access Homes and Supportive Services Through the Just in Reach Pay for Success Program in Los Angeles
Los Angeles County has one of the largest jail systems in the United States. About 20% of inmates experience homelessness or are at risk of homelessness upon reentry to their communities. Moreover, the population in jail with severe mental illness (SMI) has a higher recidivism rate than any other group. To break this cycle and involvement with the carceral system, partners in Los Angeles came together to develop a program modeled on two existing local initiatives, Los Angeles County's Housing for Health (HFH) and the CSH Just in Reach program. In 2015, the Los Angeles County Board of Supervisors approved the County CEO's recommendation to prioritize this initiative as the county's first PFS project.
The Just in Reach Pay for Success (JIR PFS) project used upfront funding from investors to provide supportive housing to 349 individuals with disabilities and histories of homelessness who were exiting the Los Angeles County jail system. These participants received services from Intensive Case Management Service (ICMS) providers aligned with housing subsidies to ease their transition from jail and reentry into the community. The program focused on two primary objectives for the participants: increasing their stay in homes long-term and reducing recidivism.
After four years of successful program operations, JIR PFS accomplished its objectives. A high percentage of the 349 individuals who received housing remained in their homes for at least one year. Further, the initiative saw participants avoiding a return to jail at an even higher rate than was initially projected. The project's success was sufficient to fully repay the amount provided by investors and yield a modest return on their investment.
We believe that PFS can be a successful funding strategy to scale supportive housing and bring diverse stakeholders around the table to define a shared vision for success. To learn whether and how PFS could be an approach to scale supportive housing and help people in your community thrive, email us at firstname.lastname@example.org.