People experiencing chronic homelessness often cycle in and out of jail, detox centers and emergency care. This cycle harms people’s health and well-being, and it can be costly for city budgets.
In 2014, Denver Mayor Michael B. Hancock announced a plan to better serve some of the city’s most vulnerable residents with supportive housing and intensive services. The Denver Supportive Housing Social Impact Bond Initiative (Denver SIB) fulfilled this commitment through innovative pay-for-success financing that helped fund supportive housing for hundreds of individuals who were experiencing chronic homelessness and frequently interacting with police, jails, and emergency rooms. A new, five-year study demonstrated the remarkable success of the Denver SIB.
In partnership with the city and using funding from the Social Impact Bond, the Mental Health Center of Denver built Sanderson Apartments. This permanent supportive housing community specializes in trauma-informed architecture and services, providing wraparound care for residents.
Supportive housing, through a Housing First approach, aims to stabilize people caught in a homelessness-jail cycle through housing assistance and intensive services. Before the SIB launched, Denver calculated that providing safety net services to 250 people experiencing long-term homelessness cost the city an average of $7.3 million a year.
What have we found?
The SIB program has been a remarkable success. It has helped people break out of the homelessness-jail cycle and saved the city money over time.
When people experiencing homelessness were offered housing, most accepted and stayed for the long term. Of those housed through the program, 86% of participants remained in stable housing at one year. At two years, 81% remained in stable housing, and at three years, 77% remained. Additionally:
- The SIB program significantly increased access to housing assistance.
- SIB participants spent significantly fewer nights in shelters.
- Participants had fewer interactions with police.
- Participants spent less time in jail.
- Participants spent less time in detox facilities.
The trauma-informed services provided by the SIB program and Mental Health Center of Denver, such as therapy, education and employment support, psychiatry and more, helped participants integrate back into our communities successfully.
The SIB program also saved taxpayers money. The costs associated with jail time, detox facilities and emergency room visits are often put back onto taxpayers. More than half of the total per-person, annual cost of the SIB was offset by reductions in jail time, detox facilities and emergency room visits.
SIB participants had $7,860 less in annual, per-person costs associated with those outcomes compared with people experiencing homelessness who did not access the SIB program, with the biggest reductions in jail and ambulance costs.
In other words, the SIB program is a prevention-based method that uses the housing-first model, which saves Denver residents money long-term.
Almost all of Denver’s supportive housing costs were offset by reductions in costs for other local services. Because housing assistance was provided through vouchers funded at the state and federal levels, almost all of Denver’s local costs for SIB supportive services were offset by reductions in costs for local emergency services.