A new study shows that Denver’s efforts to expand housing through its Supportive Housing Social Impact Bond (SIB) Initiative is beginning to pay off for the city, its homeless and the investors who are banking on the social impact.
The program intends to help people who often cycle in and out of jail, detox and emergency medical facilities — namely those struggling with chronic homelessness, substance use and mental health issues. Being trapped in that cycle not only can have negative impacts on those within it; it can also come at a high cost to taxpayers.
To help people break free from the cycle, Denver SIB combines permanent, affordable housing with social services like case management, health care and mental health treatment.
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And it’s working, according to a November study published by the Urban Institute, a nonpartisan think tank based in Washington, D.C.
Between 2016 and 2018, 330 people have been housed through the Denver SIB, nearly 80% of whom are still housed.
“When we embarked on this initiative three years ago, our goal was to provide better outcomes for people experiencing chronic homelessness and frequently interacting with emergency services,” said Mayor Michael Hancock said in a statement. “This third-year independent evaluation shows it’s working, and participants are getting housed and staying housed.”
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The Denver SIB structure requires that, if the program is successful, the city make annual payment to SIB investors. This fall, the Urban Institute calculated the Denver SIB’s housing stability outcomes for the city’s third success payment. Success payments to date total more than $2.5 million, which is in line with forecasted returns to investors.
The program keeps tabs on the housing status of participants once they enter the program. Data shows that the 39 people who left the program did so for various reasons, including death, incarceration and for voluntary reasons. Nine percent of people who exited the program re-entered housing.
“The Denver SIB is an evidence-based example that, with the right housing and services, people previously caught in a cycle of homelessness and jail stays can remain housed up to two years after entering housing,” the Urban Institute's Mary Cunningham said in a statement.
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The SIB program was first announced by Hancock at the Clinton Global Initiative in 2014. The program is structured as a performance-based contract, meaning lenders loan funds for a specific purpose and are reimbursed when the program achieves its goals.
In 2016, eight private investors lent $8.6 million to the city and county of Denver to fund supportive housing for people experiencing homelessness for more than a year, or who had a disability and often used emergency systems.
The city agreed to pay investors more than $15 for each day every participant was housed and not in jail. More than 250 participants met the payment requirement.
In 2021, the Urban Institute will publish the final report of its evaluation. It will contain results from the Denver SIB’s randomized controlled trial analysis, including differences in the time spent in jail between a treatment group in the SIB program compared with a control group receiving services as usual. A final payment will be made based on jail day reduction outcomes.
“Stability starts with housing, and these are very promising interim results,” Cunningham said.