A Denver chronic-homelessness initiative that aims to keep participants in housing and out of jail has seen “promising” early results, according to evaluators hired to assess its performance.
The city said Monday it has cut the first check — amounting to $188,000 — to begin repaying philanthropic foundations and a national bank that fronted about $8.6 million in funding for the five-year program. Since launching in early 2016, the “housing-first” program has moved about 200 people into apartments that come with addiction and mental health services, with officials aiming to hit the initial target of 250 participants early next year.
“The first 18 months of the program provide promising evidence that the program is exceeding or meeting its housing stability goals,” said Sarah Gillespie, a senior research associate from the Urban Institute who was one of the report’s authors, during a media briefing. “So participants are getting housed and staying housed.”
That’s the main goal: to encourage people known as frequent arrestees and visitors to emergency rooms and detox centers to stay in the newly provided housing, as well as get help.
Manuel Valdez, 40, moved into an Englewood apartment that’s covered using a program voucher in late August. Program outreach workers found him at a bus stop, matching him to a photo. He had been living on the streets most recently since March, unable to work because of medical issues, but his homeless experience goes back three years.
He spent much of last year in the Adams County jail on old warrants, he said.
“I haven’t been in trouble lately, especially now that I have a roof over my head,” Valdez said after participating in Monday’s briefing. “I have food in my fridge. It’s kept me out of the hospital, out of detox. … They’re helping me with mental health — with my depression. They’re helping me a lot with my psoriatic arthritis and my psoriasis, which is just physical. But while I was on the streets, I wasn’t able to keep my medications and stuff because people kept stealing them.”
Meet Manuel Valdez, whom social workers found on the street in August. He now lives in a supportive housing apartment in Englewood. pic.twitter.com/B54gGjM6Bn
— Jon Murray (@JonMurray) October 30, 2017
Program uses unusual funding model
What’s unorthodox about the program is how it’s paid for.
Called a “social impact bond” or a “pay-for-success” program, the initiative makes use of a newer financial model that draws on private investors to front the money for social programs. Repayment is based on the expectation that, in the long term, the government will save money — in Denver’s case, by spending less on jail beds and emergency services.
Critics say that governments should just pay for such programs themselves because the ones chosen for such arrangements tend to be based on proven models — and would cost less without the promise of investment returns to the outside funders.
Indeed, John Parvensky, the longtime president of a program partner, the Colorado Coalition for the Homeless, said his group previously had a lot of success with housing-first programs that wrap in supportive services, but it lacked the resources to expand them.
Measuring the Denver program’s success is a little tricky this early.
The new reports from the Urban Institute and its local evaluation partners found that of the first 100 referrals to the program, social workers were able to locate 93 individuals. But only 73 ended up having their housing applications approved, and 66 actually signed a lease and moved into one of the participating buildings (some of which were constructed by nonprofit partners for the program).
And of those, just 33 participants “have been stably housed for at least a year,” one new report says, providing the basis for the program’s first in-depth evaluation.
Program leaders say an additional six people who would have been counted in that group died soon after entering the program, typically from instances of cancer or liver disease that were detected too late.
For all the health challenges and other risks facing people living on the streets, getting into housing “is not a magic bullet,” Parvensky said.
City leaders want to expand the initiative
But officials from Mayor Michael Hancock’s administration like what they’re seeing so far. They’re ready to bet more on the program, proposing in the city’s 2018 budget to set aside $670,000 to secure 100 more supportive housing units, increasing the program’s capacity to 350 people.
One marker portrayed as an indicator of success is that among the small full-year group of participants studied by evaluators, the average number of days spent in jail was eight — actually lower than predicted by officials before the program began.
The first payment to the investors was based on 12,457 days spent in the program-provided housing by 39 qualifying participants who had been in the program long enough.
Asked whether Denver was saving money yet, Tyler Jaeckel, who has coordinated the program’s development in the city’s finance department, said it was too soon to tell. Future evaluations could begin estimating whether the city is saving money, and how much, in the third or fourth year of the program, he said.
For now, Jaeckel said, “the city is paying (investors) for ‘housing stability’ days. And the more that the city pays (it) means that we’re getting more outcomes that are of value to the city.”
In Denver’s contract with the program funders, their initial $8.6 million investment could result in a return of as much as $11.7 million, including up to $3 million in bonuses, depending on the results of evaluations in coming years. But the investors could earn less than they fronted if the program ends up being ineffective.
Here is a fact sheet produced by the program evaluators:
