A word you’ll likely hear more and more in discussions about permanent supportive housing is “responsible.”
For good reason. The idea behind permanent supportive housing (PSH)—linking onsite social services with safe, clean affordable housing—has never been as relevant and pressing. Throughout the nation, more and more individuals and families are falling into homelessness, and among them there is an increase in people struggling with high acuity issues, especially mental health challenges, that test a community’s safety net. Affordable housing is necessary, but it’s only part of a long-term solution to ending homelessness: It must be done right.
The good news is PSH is a proven, time-tested solution that works. However, the conversation around PSH has become even more difficult in recent months as affordable housing developers struggle to finance operations in a sustainable manner amid high insurance, payroll, and service costs. Fallouts have been reported, and these should act as a reminder to all stakeholders of the necessity to prioritize long-term operations in any policy and funding initiative. It’s estimated that 30% of the nation’s homeless reside in California, a fact that magnifies the challenges as well as the successes any PSH strategy should take in consideration.
For Cécile Chalifour, head of the West Region team of JPMorgan Chase Community Development Real Estate, the news should not distract from many successful PSH initiatives throughout the West. “We need more supportive housing. As a nation, we have no choice, and it must be built and developed in a thoughtful, responsible manner. That means acknowledging the true cost of PSH, making more meaningful investments in operating subsidies, funding for supportive services and staffing, and working with experienced service providers to design policies and projects that will be successful for years. Addressing homelessness is not just about opening a new building, it’s about effectively supporting the most vulnerable with what they need and creating long-term assets for communities,” Chalifour explains.
Dave Walsh, Chalifour’s counterpart for JPMorgan Chase’s East Region, agrees. “The amount of capital flowing into the development of supportive housing is like nothing we’ve seen before,” Walsh reports. “It’s the least expensive homeless solution available, and the outcomes are much more humane for the individual as well as the community.”
Chalifour points to numerous projects that illustrate PSH success. The states of California, Oregon, and Washington and major cities and counties have substantially increased funding for PSH in the last few years (e.g. Prop HHH in Los Angeles has funded over 7,400 units with an additional 3,000 under construction and 3,000 more in the design phase), including:
- Hobson Place Phase II, in Seattle. Phase I and II total 177 units, all restricted to 30% of the area median income (AMI). The development includes an integrated primary and behavioral health clinic. Developer: Downtown Emergency Service Center;
- City Center Apartments in Fremont, California. The development features 60 studio and one-bedroom units restricted to homeless, veterans, and general low-income individuals, with a capitalized operating subsidy reserve for homeless services. Developer: Abode Services/Allied Housing; and
- San Julian Apartments in Los Angeles. The community’s 94 units are restricted to residents earning no more than 30% of the AMI. Onsite supportive services are included. Developer: Mercy Housing California
The East Coast is also advancing PSH initiatives. Walsh cites New York state’s $25 billion, five-year housing plan, inclusive of the Empire State Supportive Housing program, to develop 100,000 units of affordable housing with funding allocated to 10,000 supportive housing units and operating services. Furthermore, New York State has designated $100 million in capital toward Housing Our Neighbors with Dignity Act (HONDA) that’s available for the adaptive reuse of hotels and commercial buildings for affordable and supportive housing.
The success of several permanent supportive housing models in large cities such as New York include:
- Rockaway Avenue Apartments in Brownsville. The development has 174 supportive housing units on top of a 39,000-square-foot manufacturing facility leased to a not-for-profit group specializing in supporting small design and manufacturing tenants.
- 90 Sands in Brooklyn. A former hotel in DUMBO was converted into 493 units of affordable and supportive housing; 300 units are designated for formerly homeless and 193 for low-to-moderate income individuals.
Brenda Rosen, president and CEO of Breaking Ground in New York recalls working on 90 Sands. “Getting a project like 90 Sands done, at scale, in the midst of a global pandemic is a minor miracle. It requires grit, a sense of urgency, and a relentless focus on helping people come indoors, off the streets to an apartment where they can rebuild their lives with dignity. And it only came together thanks to the collaborative and nimble efforts of the JPMorgan Chase Community Development Real Estate team working closely with our partners in government and the trades.”
Rosen and Vivian Wan, chief operating officer of Abode Services in Fremont, are supportive housing leaders who collaborate with mission-driven partners to advance PSH initiatives. Wan shares, “Often ‘innovation’ is deemed the responsibility of the developer. In reality, legislation, improved government processes, and streamlined funding is what drives our ability to build high-quality housing much more quickly. Likewise, it is through the authentic collaboration between developers, service providers, government, regulatory agencies, lenders, and investors that beautiful PSH is built and well maintained, providing the supportive services uniquely tailored to the residents in each building.”
Walsh notes that the key to launching any supportive housing project is assembling an experienced development team that understands the population. Tackling homelessness requires a social service dimension that should drive the building design, property management approach, and tenant programs available.
Solving homelessness and addressing the needs of the most vulnerable can be, and should be, done compassionately and responsibly. It’s time to reaffirm the power of permanent supportive housing and work together to craft solutions that serve the interests of all in our communities, today and tomorrow.
To learn more, get in touch with the JPMorgan Chase Community Development Banking team.