Denver Social Impact Bond Program

The Problem

Individuals experiencing chronic homelessness disproportionately utilize significant public and private government resources in the form of emergency room visits, mental health services, substance abuse detoxification and treatment, criminal justice resources, and other services. The cost of providing safety-net services to 250 of Denver’s homeless individuals is approximately $7 million per year. This includes 14,000 days in jail, 2,200 visits to detox facilities, 1,500 arrests, and 500 emergency room visits. These services add up to an average yearly cost to taxpayers per individual of $29,000. Further compounding the problem, Denver’s supportive housing resources have decreased in recent years, leaving providers and housing developers without consistent funding.

The Basics

Location: City and County of Denver, CO

Policy area: Homelessness

Population served: 250 individuals experiencing chronic homelessness

Service providers: Colorado Coalition for the HomelessMental Health Center of Denver

Size of investment: $23.7 million ($15 million in federal resources)

Maximum success payments possible: $11.42 million

Investors: The Denver FoundationThe Pinton FoundationBen and Lucy Ana Walton Fund of the Walton Family FoundationLaura and John Arnold FoundationLiving CitiesNonprofit Finance FundThe Colorado Health Foundation, the Northern Trust Company

Intermediaries: Corporation for Supportive HousingEnterprise Community Partners (fiscal agent)

Other partners: Harvard Kennedy School SIB Lab (technical assistance), Social Impact Solutions (project development), Colorado Access (Managed Care Organization)

Evaluator: Urban Institute

Evaluation methodology: Randomized control trial

Outcome payor: City and County of Denver

Outcomes that yield payments: (1) Reduction in jail bed days, (2) housing stability

Timeframe: 5 year service delivery and repayment term; 5.25 year evaluation period

Date announced: February 2016

Photo via Shutterstock.

The Intervention

Intervention: This PFS project scales Housing First and a modified Assertive Community Treatment (ACT) model. Housing First provides permanent housing to individuals experiencing homelessness, simplifying the process of accessing housing by streamlining the application process and removing unnecessary barriers to accessing housing. In Housing First, treatment or services are not a requirement of tenancy. ACT is a multidisciplinary team-based approach with assertive outreach that delivers supportive services including case management, crisis intervention, substance use counseling, mental health treatment, peer support, skills building, and connection to primary care, among others. Services are designed to address barriers to housing stability, manage mental illness, reduce interaction with the criminal justice system, and improve health outcomes. A combination of housing and supportive services is referred to as Permanent Supportive Housing (PSH). 

Evidence base behind the intervention: Multiple quasi-experimental studies and pre/post designs show PSH has positive outcomes for housing and recidivism. In general, studies show that over 12 months, 74-91 percent of participants remained in the supportive housing programs studied, and shelter use decreased 61-98 percent. Quasi-experimental studies show 38-40 percent reductions in jail days as compared to comparison groups, and pre/post studies show 42-87 percent reductions in jail days post-housing interventions.  PSH has a strong evidence base, including multiple randomized control trials. These studies were selected because they are closely aligned in either target population or outcomes of interest in the Denver Social Impact Bond Initiative.  

The effectiveness of this intervention for the target population had been evaluated, and the service provider had provided this intervention previously.