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One of the Social Impact Bond-funded apartment buildings. Photo courtesy of Colorado Coalition for the Homeless

Denver Invests Another $2.4 Million in the Housing First Model

By many measures, Denver's two-year-old housing first program, funded by a Social Impact Bond, can be considered a success. But not everyone is on board with expansion.

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Billy Jones didn’t sleep in his new Social Impact Bond-funded apartment the first night he had a key. He didn’t sleep there the second night either, or the third, or the fourth. The 50-year-old says he went “down the block,” where he’s spent much of his recent adult life living, loitering, and drinking, and camped out. It was a week before he could settle into the quiet and seclusion of his new home. A month later, he says he’s doing all he can keep the roof over his head. He’s finally receiving treatment for his unaddressed anemia, and working toward a part-time job.

“One step at a time,” Jones says.

The Colorado Coalition for the Homeless (CCH) has operated programs in Denver with a housing first model for more than 20 years. Housing first means that when an individual like Jones is given a place to live, it comes without strings: Residents don’t have to resolve legal issues if they have them, sign up for substance abuse or mental health treatment, or enroll in a program of any kind to get a key. “We’ve learned over the years that if you create all of those barriers up front, then you won’t get people into housing,” says Cathy Alderman, vice president of communications and public policy at CCH. “It’s too much to take on. If you’re living on the street, it is too difficult to address all of those issues before you are in a stable place.”

In addition to providing housing, CCH also gives residents access to a caseworker and social services. Individuals can choose to take advantage of that assistance, or not, though the vast majority do—and about 90 percent of CCH clients still have a roof over their head a year later. The housing first model has been used across the U.S. for about two decades and is generally regarded as a best practice for non-emergency services-based approaches to combatting homelessness. Recently, Utah saw a 72 percent reduction in homelessness after implementing an ambitious housing-first program.

In a City Council resolution passed July 9, Denver threw its weight behind the housing first model in the form of a $2.4 million expansion, funded through the general fund, of the $8.6 million Social Impact Bond (SIB) they passed about two years ago. An independent analysis of the program by the Urban Institute, a Washington, D.C.-based policy research organization contracted by the City of Denver, shows that in its first year, Denver’s SIB program has been successful in terms of participants remaining in stable housing and staying out of jail. But not everyone is happy to see the program expand in Denver.

The Denver SIB provides five years of housing to 250 chronically homeless individuals in the form of vouchers that ensure affordable rent—no more than 30 percent of residents’ income—at “scattered site” units across the metro area or at one of two buildings dedicated to this program. Candidates for the program are high utilizers of costly city and county public safety resources, like spending nights in detox, jail, or going to the emergency room. Many struggle with unaddressed mental health concerns and substance use disorders.

The program is grounded in the idea that it’s cheaper to provide this demographic supportive housing than letting them remain homeless. The city estimates that 250 high-utilizers on the streets cost taxpayers more than $7.3 million each year, or more than $29,000 per person. Giving someone who’s experiencing homelessness a place to live (and thus making them no longer homeless), on the other hand, only costs $18,000 per person. Supportive housing also includes “wrap-around” services from CCH and its community partners, such as Mental Health Partners of Denver, to help residents address issues that might have led to their homelessness in the first place. Eight private and philanthropic investors fronted money for the program, and at the end of each quarter, the city pays back investors based on the program’s success in keeping these individuals housed (calculated at $15.12 per person per night).

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The Denver SIB program surpassed its goals in the first year. Eighty-three percent of participants did not spend a single night in jail, according to the Urban Institute assessment. While living on the streets, Denver’s Crime Prevention and Control Commission estimates this demographic spent an average of 56 nights in jail per year. Alderman says the program also demonstrated an 87 percent housing retention rate—higher than the rate of 80 percent they had forecast. This means just 13 percent of participants left the program in an unplanned manner, which Alderman says could be attributed to imprisonment, death, or departure for other treatment programs.

The expansion passed on July 9 will extend supportive housing vouchers to an additional 75 homeless individuals identified as high utilizers of public safety resources. Councilman Kevin Flynn (District 2), who voted against the expansion, raised concerns at the City Council meeting that the program may be costing the city more than is being acknowledged.

Flynn’s district is home to the Sanderson Apartments, a complex of 60 units at 1601 S. Federal Blvd. built through the SIB. Crimes reported at that address and the surrounding neighborhood have increased significantly since the building opened. Flynn also noted that businesses nearby, like Torres Mexican Food and Little Einsteins Academy, have expressed concerns about losing customers. Flynn also says he is concerned about undesirable individuals visiting the building, and says police reports have shown serious crimes taking place, including stabbings and assaults.

Carrie Craig, CCH’s director of housing first and Assertive Community Treatment (ACT) services, says she doesn’t think that Flynn’s argument is a valid concern against the program. “It takes many, many years to damage people with trauma in their lives, and it takes many, many years to help them overcome trauma in their lives,” Craig says. “People get used to—just like Mr. Jones said—being on the street. It’s very hard to make that change. Ultimately, in order to make that change, you have to have consistent support and help. A lot of our clients don’t have that, so we’re here to be the support system.”

Craig points out that there are rules in place at the SIB-funded apartments to limit visitors, and it is possible that violating the terms of the lease could result in eviction.

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Flynn organized a registered neighborhood group, South Marlee/Brentwood/Sharon Park Neighbors, to negotiate a Good Neighbor Agreement with Mental Health Partners of Denver, which operates the Sanderson Apartments. The agreement hammers out details like fencing the yard, keeping noise down, and helping to clean up the gulch behind the building, which collects trash.

Council President Albus Brooks (District 9), said at the July 9 meeting that the two SIB sites in his district initially faced concern or opposition, as well, but that residents have since come around. Now, they tell him the buildings have actually cleaned up the block.

“This is not the suburbs. We live in a city of different perspectives, different cultures, different economic backgrounds,” Brooks said during the July 9 meeting. “We can no longer fight these things. We have to figure out how to live in a neighborhood where we all come together and figure out how all folks can live. And so, I’m telling my folks in District Nine that this is no longer a conversation about ‘hey these folks can’t live here.’ We’re gonna find out how to live together.”

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