by Nonprofit Finance Fund (08/05/2015)
NFF spoke with Victoria Shire, Vice President at Enterprise Community Partners, Inc. about the Housing to Health initiative in Denver, Colorado. You can read more about the project here. This is the first blog in an interview series with selected project partners from our Social Innovation Fund transaction structuring competition.
NFF: Tell us about the genesis of the Housing to Health project in Denver. What was the original impetus for this project? How were the project stakeholders brought together?
Enterprise: As a part of their ongoing efforts to find innovative ways to support the work of nonprofits in Denver, the Denver Office of Strategic Partnerships (DOSP) applied for technical assistance for Pay for Success (PFS) work on behalf of the City and County of Denver. In January 2013, DOSP received a grant from Harvard Kennedy School SIB Lab for placement of a Government Innovation Fellow, who has since been vested responsibility to coordinate Denver’s PFS activity. In 2013, the City conducted public outreach and a Request for Information (RFI) process to gather ideas from city agencies, local providers, and national organizations. As a part of that process, the City created workshops and committees to explain PFS and generate feedback from nonprofits, local investors, and government officials.
At the conclusion of the RFI process, the City identified a proposal submitted by the Denver Crime Prevention and Control Commission to address homeless individuals who frequently interacted with multiple services, including the criminal justice system, detox, and emergency rooms. This selection was informed by early work of a Recovery Court pilot, which showed early success in reducing jail bed days using a housing and intensive case management intervention. Further needs analysis showed that the proportion of chronically homeless individuals experiencing behavioral health issues in Denver was increasing rapidly, while the resources to serve such individuals were declining.
In more practical terms, the City found that if the demand on jail bed days continued to climb, there would be a need for a new facility. This was the right moment to investigate better preventative solutions. Supportive housing was a natural fit because of decades of evidence that demonstrated its effectiveness in achieving housing stability while reducing usage of emergency health and criminal justice systems.
Enterprise was selected by the City in early 2014 to serve as one of three organizations filling the role of transaction coordinator for this project. Our other two partners are Corporation for Supportive Housing (CSH), and Social Impact Solutions (SIS). This partnership of three organizations was assembled by the City for our combination of national and local knowledge, experience with the issue areas, and familiarity with PFS contracting and financing.
In keeping with our mission to end housing insecurity, Enterprise is leveraging its Denver-based staff and knowledge of the local housing market with the PFS expertise of national staff. Enterprise has engaged on four PFS projects in varying stages of development from feasibility to execution, including the Cuyahoga County Partnering for Family Success program.
CSH is the nation’s leading expert in supportive housing and the frequent user model, and is involved in PFS in multiple ways, including as one of eight Social Innovation Fund PFS grantees, as partner and advisor to states exploring PFS, and an investor in Massachusetts Chronic Homelessness Pay for Success Project launched in late 2015.
The transaction team is completed with Social Impact Solutions, a local consulting team that leads the team’s efforts to secure transaction financing. SIS staff has a combined several decades of high-level policy development, financing and implementation experience, and are leading PFS efforts throughout Colorado. They support clients in positioning successful programs for innovative financing mechanism through feasibility studies, financial modeling, identification of funders, and deal structuring.
NFF: One of the things that struck us as innovative about this project was that it is part of a larger initiative that aims to increase the supply of permanent supportive housing in Colorado and capitalize on the connections between housing and improved health and criminal justice outcomes. Can you describe the broader goals for this work and describe how PFS fits in? And how does the project team you’ve assembled reflect the broader scope of work?
Enterprise: The Housing to Health effort will inform and be informed by a number of related efforts at the city and state levels, all of which aim to increase the supply of, or improve the delivery of, supportive housing in Colorado. At the state level, Enterprise is implementing our Supportive Housing Toolkit, a partnership model that provides technical assistance to nonprofit, community-based organizations to develop supportive housing projects. Two cohorts have completed the curriculum and another cohort is scheduled.
Also at the state level, our partner CSH is leading the Medicaid Crosswalk, a project to determine how best to utilize Medicaid resources through existing and future state Medicaid waivers. The State Department of Health Care Policy and Financing has been working with the project to identify how the expansion of eligibility under the Affordable Care Act will be able to fund supportive services connected to the project’s housing.
At the city level, the new Division of Behavioral Health Strategies, which includes the Denver Crime Prevention and Control Commission, has been established in the Department of Human Services. With Denver’s Road Home and the regional Continuum of Care, along with city and state housing agencies, there is a renewed focus on utilizing evidence-based practices to address and end homelessness.
NFF: As you know, the road to launching a PFS project is a long one! Can you share with us what the biggest challenge to date has been? How have you and your partners overcome this challenge?
Enterprise: As with any PFS project, it’s been key to finely define the eligibility criteria and intake process for the PFS-funded intervention. At the same time, there are broader systems in flux, including the introduction of coordinated assessment and placement in the homelessness system and changes in Medicaid rules, which we have to remain cognizant of in our program design.
On top of this, the Denver housing market and affordable housing resources are incredibly tight. This presents challenges to securing the units and subsidy needed to provide housing which are critical to our program’s success, although the financing for new units is not part of the PFS transaction. One way we mitigated risk was in our service provider selection process: the pipeline of units in development and the experience of providers in developing supportive housing were key considerations. Additionally, both CSH and Enterprise are experienced financial intermediaries in the affordable and supportive housing development fields, so we are well equipped to monitor this aspect of the project and institute course corrections as necessary.