Denver Supportive Housing Social Impact Bond Initiative
People who experience chronic homelessness and co-occurring challenges such as persistent mental illness and substance abuse often cycle in and out of jail, which affects their well-being and comes at an enormous cost to taxpayers.
In response to this problem, the City of Denver and eight private investors launched the city’s first social impact bond (SIB) in 2016, for which these investors provided $8.6 million in upfront capital for services. The project leveraged additional federal, state, and local resources for permanent housing subsidies for 250 of the city’s most frequent users of the criminal justice system. The city will repay the investors if specific performance outcomes are achieved for housing stability and reductions in jail days.
By definition, the target population for the SIB includes people who cycle in and out of public systems, primarily homeless shelters, criminal justice, and emergency health services. Common terms for this population include “frequent users” or “super-utilizers” to describe the disproportionate share of emergency services and resources they require because their housing and mental health needs are not being met. The SIB targets people who have had at least eight arrests in the past three years and who are experiencing homelessness. In a given year, the Denver Crime Prevention and Control Commission calculated that a cohort of 250 people in this target population spent an average of 56 nights in jail each year and interacted with other systems, such as detoxification and emergency care, costing the city $7.3 million a year on average. As of December 2018, the SIB had over 250 people in supportive housing using both project-based and scattered-site housing and an assertive community treatment model.