By Jon Murray
A story Tuesday morning in The Denver Post previewed new details for Denver’s proposed $8.7 million social impact bond contract, aimed at housing some of the city’s most chronically homeless.
Later this morning, the City Council’s Finance and Services committee advanced the contract, along with another set at $937,500 for an independent program evaluator (led by the Urban Institute). But it was clear that council members, new and returning alike, still have plenty of questions about how the five-year program would work — and about how the program fits into larger homelessness efforts underway in the city.
City officials are pushing for quick final approval of the contracts on Jan. 25 by the full council. But some members expressed a reluctance to vote until after Jan. 27, when the council is set to hold the second installment in a separate discussion of city homelessness policy that began with a retreat last month.
How that dynamic will play out is unclear, though the committee opted not to hold back the contracts for now. At-large Councilwoman Debbie Ortega abstained from that vote.
Simply put, the arrangement would draw money from private sources (including a bank and a foundation) and use it to start a new supportive housing program serving about 250 chronically homeless individuals who typically cost the city millions of dollars each year by cycling through jails, detox and emergency rooms. The city would repay the upfront investors by tapping the savings from lower arrest rates and other use of city services by the participant.
The investors — who haven’t yet been disclosed — would get repaid based on the participants’ stability in the housing provided by the city’s nonprofit partners as well as their ability to stay out of jail. The full contract is being finalized, and Deputy Mayor Cary Kennedy says the administration plans to submit it to the council and identify the investors soon.
The backers could receive as much as $11.7 million back with bonuses if the program outperforms projections, or as little as $2.6 million if it’s a failure. If the city’s goals are met, including a 40 percent reduction in expected days in jail by participants, then the city would repay $9.7 million, providing a $1 million profit to the investors.