Beyond the moral reasons for the humane treatment of our homeless populations in the US, chronically homeless people can be prohibitive cost burdens to many cities and urban areas.
High Costs, Low Returns
In a study cited last year, San Francisco spends more than $240 million per year, almost half of which $112 million alone was spent on supportive housing. Yet for all it spends, San Francisco remains high in a ranking among cities in the U.S. with the most homeless, second to New York, according to a report in June 2016.
Denver is no stranger to these high costs. A city commission has calculated that the top 10 percent of its homeless population, in terms of the number of times those people spend in jail and rehab, costs the city “upwards of $11.4 million per year.”
Bonds That Measure Outcomes
Attempting to address the issue, an initiative to pursue using Social Impact bonds was started last year, and its results are being closely watched. Investors are reimbursed by the city based on impact measures such as home retention rates, or reduction in days spent in jail by participants in the initiatives.
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“How successful is the SIB initiative so far? “Since the first participants moved in this March, no one has left voluntarily,” said Cathy Alderman, vice president of communications and public policy for the Colorado Coalition for the Homeless (CCH), the initiative’s primary service provider partner.
“Anecdotally, it’s making a huge difference, though we can’t say for certain if the model is exactly right yet. Bringing people in from the streets, we stay pretty close to them for awhile to make sure they are adjusting and making their doctor appointments. They have nothing, so they need a bed.
Case managers teach life skills, like maintaining their space and grocery shopping. They get vocational training. Re-connections with family are made if possible. It is intensive case management upfront, then less as they settle in.”
Investors that will be repaid based on retention rates include Northern Trust Co., a Chicago-based bank with a local office (providing $3 million); and the Denver Foundation and Piton Foundation, both locally based, providing $500,000 each. Five more investors will be repaid based on the reduction in days spent in jail by participants: the Houston-based Laura and John Arnold Foundation (providing $1.7 million); the Colorado Health Foundation ($1 million); the Walton Family Foundation ($1 million); the New York-based Nonprofit Finance Fund ($434,695); and the Living Cities Blended Catalyst Fund ($500,000).
Helping the homeless begins with compassionate intervention, Alderman said. “The co-responder model works, where a mental health worker goes out with police. It’s important to identify people’s needs instead of just moving them along.”
Source: North Denver Tribune
