Long Beach explores new funding tool to alleviate homeless problem (Press Telegram)

By Courtney Tompkins, Long Beach Press Telegram

An emerging tool may help Long Beach solve pressing social issues such as homelessness.

City Council members Suzie Price, Daryl Supernaw and Roberto Uranga asked city staff this week to explore the possibility of using “social impact bonds,” which involve private or philanthropic groups lending money to accomplish a specific social objective. The government would repay the funds if and when the objective is met, but if goals are not achieved, the government is off the hook for the bill.

For example, in February Denver began using the bonds for a supportive housing program that would use money from lenders to provide case management services and housing to 250 people who are deemed chronically homeless. If the program goes as planned, the city would repay the bonds with the estimated $7 million in annual savings in emergency services, — including jail, courts and emergency rooms — that would normally be spent on those individuals.

Other cities and states, such as New York City, Salt Lake City and Massachusetts, have used the bonds to help fund various preventative programs related to homelessness, early childhood education and decreasing recidivism.

It isn’t clear specifically how Long Beach plans to use the funds, but the focus would be efforts on homelessness, an issue that residents from downtown to Belmont Shore and East Long Beach have expressed concerns about.

The city housed 1,738 people in shelters from Jan.  1 through August, and officials say Long Beach has received about $8.9 million this year in funding — most of it from the federal government — to combat homelessness.

While the city offers a number of social programs, Price said new ideas need to be considered.

“The ideas that are stale are no longer applicable to today’s homeless population,” Price said. “If we’re going to address this using creative, out-of-the box ideas, we need to explore other alternatives.”

Price said she came across the funding tool through a podcast created by Harvard University’s John F. Kennedy School of Government, which published a guide on social impact bonds for state and local governments in June 2013.

“Each year, governments spend hundreds of billions of dollars addressing social problems,” the report states. “But in most cases, we have no idea how effective this spending is. Performance is rarely assessed, and measurement tends to focus on tracking the number of people served and the amount of service provided rather than the outcomes that are achieved.”

In Long Beach, a variety of social services funnel through the Multi-Service Center. Kelly Colopy, director of the city’s Health Department, said she is aware of how the “pay-for-success” model works but stressed that the city would need to show how it could save money through new programs.

“We would need to show savings in other areas such as public safety and health resources,” she said. “People invest with an expectation of being paid back.”

The City Council is expecting a report back from staff on the financing tool in the next 60 days, Price said.