By Deborah De Santis, President and CEO of CSH (Corporation for Supportive Housing)
This past week, Denver Mayor Michael Hancock unveiled a new initiative in his city that could significantly alter the way communities provide affordable housing and services for homeless people and others in need.
With former President Bill Clinton by his side, Mayor Hancock detailed a groundbreaking $8 million funding plan focused on Denver's chronically homeless - those who find themselves caught in continuous crises and the revolving door of expensive emergent care.
CSH is partnering with Denver to implement a Social Impact Bond for the development of much-needed supportive housing.
Although the commitment in dollars is quite impressive, the program will not initially burden local taxpayers. Under this paradigm, investors, such as large investment banks and foundations, provide money upfront while relying on a contract that commits taxpayers to repaying them later, but only if the effort proves successful.
Social Impact Bonds or, as they are sometimes called, Pay for Success contracts, combine nonprofit expertise, private sector funding, and rigorous evaluation to transform the way government and society respond to protracted social problems.
As Mayor Hancock so aptly stated, Denver's primary goal must be to "stop the perpetual cycle of (people) going from the streets to jails to emergency rooms and back to the street" by building and providing supportive housing.
In addition to new housing, the project will include case management teams to help those who are in need of attention tackle substance abuse, physical and behavioral health challenges, and other issues.
Denver officials have every reason to pursue this cutting-edge idea and new methods to help those experiencing homelessness. A local commission has reported that the 300 homeless people who most often interact with authorities collectively spend more than 14,000 nights in jail and visit detox facilities more than 2,000 times annually, translating into an estimated $11 million per year in city resources.
As every elected official knows all too well in these tough budgetary times, Denver, and other cities, could better use such monies to address many long-term problems. Denver says the program will be judged a success if it reduces the skyrocketing criminal justice and healthcare costs that they are now facing.
CSH applauds the City of Denver, Mayor Hancock and his incredible staff, for visionary leadership in working to address perhaps the most vulnerable and costly segment of the homeless population.
CSH is proud to collaborate with Mayor Hancock and his team in developing a long-term, data-driven response that has the potential to become a national trend.
We believe it is time for leaders in other communities to double-down on interventions that work, and consider Social Impact Bond programs and other unique concepts.
CSH has a rich history of pioneering answers that maximize supportive housing as an intervention and effective solution for those facing the tragedies of homelessness, many of whom are cycling almost endlessly through institutions and high-cost care.
As we realize the potential to overcome obstacles and transform the development and impact of supportive housing, the new financing mechanisms and collaborations found in Social Impact Bond funding are motivating us to raise our expectations and the bar even higher.