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The Denver Social Impact Bond (SIB) program shows that supportive housing gets homeless individuals off the streets and reduces the public costs of emergency services.

After entering supportive housing, program participants maintained high housing stability rates, with 86% of the formerly homeless individuals remaining in stable housing after one year. At two years, 81% continued to be in stable housing, and, at three years, 77% remained housed, reports the Urban Institute, which partnered with The Evaluation Center at the University of Colorado Denver to track the results.

The Denver SIB study is one of the most rigorous evaluations of how supportive housing affects people’s interactions with the criminal justice system and emergency health services, according to the researchers.

Launched in 2016, the Denver SIB used a Housing First approach, providing a permanent housing subsidy and intensive services to help people who were experiencing chronic homelessness stay housed.

“The program’s results disrupt the false narrative that homeless is an unsolvable problem and that people who experience chronic homelessness choose to live on the street,” said Mayor Michael B. Hancock. “With the offer of housing first and the right supports in place, people can and did exit homelessness and remained housed.”

The program not only ended chronic homelessness for many, it also reduced days in jail and lowered the public costs associated with jail stays, detox, and emergency care.

“Rather than paying for the consequences of leaving people in homelessness, communities could learn from Denver and invest in housing and supportive services that end the harmful homelessness-jail cycle,” said Mary Cunningham, Urban Institute’s vice president for metropolitan housing and communities policy. “Results from our evaluation of the five-year Denver SIB show how both people and public budgets benefit when communities take this proactive approach.”

The randomized controlled trial included 724 people: 363 people were in the treatment group (referred to the supportive housing program), and 361 were in the control group (received services as usual in the community). Of the people in the treatment group, most were housed through two local service providers, Colorado Coalition for the Homeless and the Mental Health Center of Denver.

Key findings include:

  • The Denver SIB significantly increased participants’ access to housing assistance. Over three years, people referred to supportive housing received an average of 560 more days of permanent housing assistance per person than those who received services as usual in the community, demonstrating the scarcity of housing assistance outside of a program like this.
  • Denver SIB participants spent significantly less time in shelters. When counting all instances of shelter use during the day and at night over a three-year period, those referred to supportive housing had an average of 127 fewer unique shelter visits and 95 fewer days with any shelter stays than their peers in the control group. This represents a 40% reduction in shelter visits and a 35% reduction in days with any shelter stays.
  • Supportive housing reduced people’s interactions with the criminal justice system. In the three years after being randomized into the evaluation, people referred to supportive housing had an average of eight fewer police contacts and four fewer arrests than those who received services as usual in the community. This represents a 34% reduction in police contacts and a 40% reduction in arrests because of supportive housing.
  • Denver SIB participants spent less time in jail. In the three years after being randomized into the evaluation, participants who were referred to supportive housing had an average of almost two fewer jail stays and spent an average of 38 fewer days in jail than those who received services as usual in the community. This represents a 30% reduction in unique jail stays and a 27% reduction in total jail days.
  • Supportive housing helped people use less emergency health care and more office-based health care. Two years after Denver SIB participants were referred to supportive housing, they had an average of six fewer emergency department visits than people who received services as usual in the community, and they had eight more office-based health care visits with a psychiatric diagnosis. Participants also received an average of three more unique prescription medications over two years than those in the control group. This represents a 40% decrease in emergency department visits, a 155% increase in office-based visits, and a 29% increase in unique prescription medications.

Overall, Denver SIB participants had $6,876 less in total annual, per-person costs associated with other emergency public services compared with the control group, with some of the biggest avoidances in reduced jail,
ambulance, and emergency department costs. That means about half of the total per-person annual cost of the Denver SIB was offset by cost avoidances in other public services, said researchers.

Housing assistance was provided through vouchers funded at the state and federal levels, so most of Denver’s local costs for SIB supportive services were offset by reductions in costs for local emergency services. To fund the program, Denver leveraged local housing resources and $8.6 million from eight private investors, making the initiative one of the first supportive housing programs funded through a social impact bond.

According to the SIB contract, if the program met its goals for keeping people housed and reducing their number of days in jail, the city would make outcome payments to the investors. If the program did not meet its outcome goals, the city would not repay the investors.The “pay-for-success” arranged was managed by an intermediary entity comprising the Corporation for Supportive Housing and Enterprise Community Partners.

Because of the program's success, the city will repay the initial investment and more than $1 million more than the investors contributed. The project passed the contract threshold in which investors agreed to share success payments with the providers.