Over the next year, Denver commits to fully developing a Social Impact Bond to ensure the City is delivering the most effective services, paying for results, 'Paying for Success,' and shifting its spending from short-term band-aids to long-term, sustainable solutions. The supportive housing initiative will target chronically homeless individuals who also struggle with mental health and substance abuse challenges. Denver is committed to addressing the challenge of chronic homelessness through the very best, evidenced-based, data-driven programs and the most innovative and modern funding mechanisms.
Through its partner organizations, the Corporation for Supportive Housing and Enterprise Community Partners, the City & County of Denver will implement an initiative to serve 200-300 chronically homeless individuals over the next six years using Social Impact Bond financing. The program will be based upon various proven models that combine the approaches of Housing First with intensive case management. Given the overall affordable housing needs of Denver, the initiative will likely make use of a combined housing approach; using an existing scattered-site housing units in the short-term and building new permanent supportive housing units for the long-term. Both housing models will include either mobile or onsite units that will provide intensive case management that will focus on physical health, behavioral health, substance abuse, and daily needs. Over the next year, the City and its partners will work together to develop the program model, the housing financing needed to build new, permanent supportive housing units, and develop a market-ready structure for the Social Impact Bond. The City brings a vast knowledge of the population to be served and a commitment to funding preventative solutions, which will combine with its partners' strong housing expertise and resources to create long-term solutions for the City's vulnerable population.
The initiative will attempt to combine existing services and housing development resources together with new innovative funding structures in order develop a new model for increasing supportive housing. Through its continued work to promote supportive housing, the State of Colorado has made great progress in using Low-Income Housing Tax Credits and Medicaid reimbursement of behavioral health treatment to promote supportive housing across the state. Denver will work to build upon this framework using Social Impact Bond financing to raise -15 million in financing.
This initiative will expand upon Denver's Road Home and other past efforts by leveraging the new financial tool of Social Impact Bonds, scaling up existing programs targeting this population, and bringing in new expertise and best practices to help target this vulnerable population. The City has recently completed a feasibility analysis of conducting a Social Impact Bond for chronically homeless individuals in Denver.
The City and its partners will continue to engage national and local investors. The types of investment desired include risk-mitigating grants, Program Related Investments, Mission Related Investments, and other private investments. The City has made it a priority to engage local investment opportunities and work to develop a mechanism for community businesses to engage in the process.
Once the development process is complete, the City and its partners will begin to implement a five to six year program.
In order to move towards implementation of actual program services, the City will work with its partners on the following development steps:
Selection of Housing/Service Provider(s) (Fall 2014): A single organization or multiple organizations will be selected and the specific housing development and program design will be decided. This may be one organization that is both a housing developer and an ongoing operator and service provider or may be a separate housing developer and service provider.
Commitment of Investors to Social Impact Bond (Early 2014): The City and its partners will continue to engage national and local investors. The types of investment desired include risk-mitigating grants, Program Related Investments, Mission Related Investments, and other private investments. The City has made it a priority to engage local investment opportunities and work to develop a mechanism for community businesses to engage in the process.
Contract negotiations (June 2015): A contract between the City and its partners will be completed. The contract will outline all terms of the implementation phase, including the evaluation plan, payment schedule, outcome ranges, responsibilities, and reporting structures.
The City of Denver, like many other America communities, faces limited resources to invest in existing preventive programs for the chronically homeless and individuals who struggle from mental health and substance abuse challenges. As a result, too many of these individuals frequently interact with the police, jail, detox, and emergency care systems. These current interactions are extremely costly and ineffective. The Denver Crime Control and Prevention Commission (DCCPC) has tracked these interactions across systems for the last four years and has calculated that the top 300 heavy-utilizers cost upwards of .4 million per year. Lacking an effective intervention, they will continue to be very costly to the City - including the cost of police time, jail days, detox programs, emergency room visits, and other health care expenses. On a given year, DCCPC has calculated that the top 300 individuals spend over 14,000 nights in jail and visit detox facilities over 2,000 times. Without an appropriate intervention, the City and its taxpayers will continue to pay a high cost for ineffective remedial and emergency care systems.
In addition, supportive housing resources available for operation and services have decreased, forcing many providers and housing developers to scrap together various grants or abandon plans for the creation of new housing and programming. Without a consistent source of funding, future housing programs targeting the most vulnerable homeless populations may not move forward.
The project will be seeking financial resources in the form of grants and/or investments (including Program Related Investments, Mission Related Investments, and other types of private investment). The financial resources will be needed either for the development of new housing and/or the implementation of a Social Impact Bond.
As a part of the Denver's planning process, the City was able to bring national experts to Denver to take part in a best practice convening. This event had a tremendous outcome of generating excitement and developing new ideas around solutions for homelessness in Denver. The City would actively like to partner with other cities/governments and organizations working on similar initiatives to share knowledge, create new ideas to the underlying causes of homelessness, and generating a network to distribute lessons learned. In addition, the City is always interested in partnership opportunities to develop new resources and learn best practices.