Can Pay for Success Scale Supportive Housing for a Reentry Population?

people walking in a urban neighborhood as the sun comes up

Research shows that permanent supportive housing (PSH) is an effective approach to addressing homelessness. In the PSH model, affordable housing with no time limit is created through rental subsidies, and supportive services focus on areas such as mental health, substance abuse treatment, and employment. Providing people with a home and the option for services ensures they receive the care they need and that they aren’t relying on costly public services, such as emergency rooms, to survive.

In some jurisdictions, creating more PSH can be cost neutral or could even create cost savings because costs of expensive public services, including criminal justice and health care, decrease as people move off the streets. But any potential savings may accrue gradually or go to systems other than the one footing the bill for the intervention. Because of these qualities, PSH can be difficult to scale or implement in new communities.

Because of its ability to cover up-front costs for a demonstrably effective program before savings kick in, pay for success (PFS) has emerged as one potential financing strategy to bring PSH to more communities and increase existing PSH capacity to serve new people. In June 2016, the US Department of Housing and Urban Development (HUD) and the US Department of Justice (DOJ) announced that they were awarding $8.7 million to seven demonstration sites across the country to use PFS to expand PSH.

The Urban Institute is conducting a national evaluation of the demonstration to understand how PFS is implemented in the different demonstration sites, capture the lessons learned across sites, and examine the feasibility of using PFS for a high-need, high-cost, homeless, reentry population. Through the national evaluation, HUD and DOJ seek to assess whether PFS is a viable financing model for increasing the scale of supportive housing for a reentry population. The evaluation seeks to document the reality on the ground as each community began its PFS project, describe the projects that develop in each site, and, in hindsight, understand how each community’s unique context may have affected the PFS project as it moved through each phase.

Reports

Evaluation of the HUD-DOJ Pay for Success Permanent Supportive Housing Demonstration: Baseline Report
This report examines grantees’ early progress and challenges during the initial grant period (October 2016–December 2017) as sites established partnerships, gathered and analyzed data, conducted feasibility analyses, and worked toward launching their permanent supportive housing projects.

Data Use and Challenges Using Pay for Success to Implement Permanent Supportive Housing: Lessons from the HUD-DOJ Demonstration
This brief discusses unique aspects and challenges of using cross-sector data to determine the feasibility of using pay for success to scale permanent supportive housing in a jurisdiction and how projects might continue to use data through implementation. (December 2018)

 

Project leaders:

Mary Cunningham—Principal investigator
Akiva Liberman—Principal investigator
Kelly Walsh—Project director
Nicole DuBois—Project manager

Project staff members:

Samantha Batko
Brian Bieretz
Matthew Eldridge
Lauren Farrell
Sarah Gillespie
Evelyn McCoy
Eleanor Noble
Alexandra Ricks
Clare Salerno

 

This page will be updated as new reports and products are made public. Last updated on November 19, 2019.

Photo Credit: Maura Friedman/Urban Institute