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Three Years Into Denver’s Innovative Social Impact Bond Program, Independent Report Points to Continued Success

Program has housed 330 people previously caught in the homelessness-jail cycle

DENVER – A third independent evaluation report by the Urban Institute released today shows most residents of Denver’s Social Impact Bond (SIB) funded supportive housing program remain housed three years into the innovative housing-first initiative. Due to this continued success, the city has made a third payment to investors of $1.5 million. In total, the city has made $2.5 million in success payments to date.

“When we embarked on this initiative three years ago, our goal was to provide better outcomes for people experiencing chronic homelessness and frequently interacting with emergency services, and ultimately save taxpayers money. This third-year independent evaluation shows it’s working and participants are getting housed and staying housed,” Mayor Michael B. Hancock said. “This is another important milestone toward the ultimate goal of breaking the homelessness-emergency services cycle, and I am so proud of the individuals who have embraced this opportunity to connect to housing and supportive services and make a new start on life through this innovative work.”

Between January 1, 2016 and December 31, 2018, 330 people moved into SIB-funded supportive housing, usually within six months of being referred to the program. The SIB program tracks the housing status of participants at various intervals once they enter the program. Two years after entering housing, 79 percent of participants are still housed. The 39 people who exited the program did so for a variety of reasons including death, incarceration, lease violations, or voluntary exit. Nine percent of those who exited the program re-entered housing.  

“The Denver SIB is an evidence-based example that, with the right housing and services, people previously caught in a cycle of homelessness and jail stays can remain housed up to two years after entering housing. Stability starts with housing, and these are very promising interim results.,” said Mary Cunningham, Vice President of the Urban Institute’s Metropolitan Housing and Communities Policy Center.

Social Impact Bonds are a unique type of performance-based contract where private and/or philanthropic lenders loan funds to accomplish a specific objective and are repaid based on whether the program achieves its goals. In 2016, the City and County of Denver and eight private investors closed on the city’s first SIB program, an $8.6 million investment to fund supportive housing for people who were homeless for more than a year or had a disabling condition and were frequent users of emergency systems. An additional $15 million in federal resources are being leveraged over five years. Based on the SIB contract, the investors provided funding to support the program. If the program meets the goals of housing stability and decreased jail stays, the city makes outcome payments to the investors. If the program does not meet its outcome goals, the city does not repay the investors.

The Denver SIB program, first announced by Mayor Hancock at the Clinton Global Initiative in June 2014 and launched in 2016, is an initiative aimed at measurably improving the lives of people most in need by driving resources towards better, more effective programs.

“At the Colorado Coalition for the Homeless, we know that housing is an essential component to overall health and when we combine effective supportive and therapeutic services with housing for our residents, we know both their housing stability and health outcomes will improve,” said John Parvensky, President/CEO of the Colorado Coalition for the Homeless. “Three years into this program, it is clear that our work to pair healthcare, critical supportive services, and housing is a viable, common-sense solution that provides lasting solutions for those experiencing homelessness and we welcome the opportunity to continue and expand the program.”

“We have seen firsthand the positive influence that permanent supportive housing has on a person’s life. For the participants we have housed, two-thirds of residents are either employed or attending vocational activities. The Social Impact Bond has afforded more than 300 individuals a chance to access preventive services, gain housing stability and improve their well-being,” said Carl Clark, MD, president and CEO, Mental Health Center of Denver.

Through the Social Impact Bond contract, the city agreed to pay investors $15.12 for each day each qualifying participant was stably housed and not in jail. Qualifying participants are those who spent at least one year in housing or had a planned exit. The Housing Stability Payment report found that 257 participants met the payment requirement. After subtracting days in jail and days already paid for the first through tenth quarters of the project, the outcomes call for a third success payment of just over $1.5 million from the city to investors. In prior years, the first success payment was $188,000 and the second success payment was $837,600.

Before supportive housing, program participants’ experiences of homelessness and housing instability were closely linked to their criminal justice involvement. The SIB program was designed to reduce their jail stays by providing housing stability and wrap around case management services. Denver SIB service providers spend considerable time establishing relationships with judges, public defenders, city attorneys, and police officers and educating them about the program. This cross-system collaboration is crucial for the success of the program, according to SIB service providers.

In 2021, the evaluation will report on results from the Denver SIB’s randomized controlled trial analysis, including differences in jail days between people in supportive housing and those receiving services as usual. In addition to annual payments linked to housing stability outcomes, the city will make a final payment based on jail day reduction outcomes.

The partners involved in this program include:

  • Colorado Coalition for the Homeless (Service Provider)
  • Corporation for Supportive Housing (Project Manager)
  • Enterprise Community Partners, Inc. (Fiscal Agent)
  • Mental Health Center for Denver (Service Provider)
  • Social Impact Solutions (Project Development)
  • Urban Institute with local partner the University of Colorado Denver and the Burnes Institute (Independent Evaluators)
  • Colorado Access (Managed Care Organization)

The investors involved in this contract include:

  • The Denver Foundation
  • The Piton Foundation
  • The Ben and Lucy Ana Walton Fund of the Walton Family Foundation
  • Laura and John Arnold Foundation
  • Living Cities Blended Catalyst Fund LLC
  • Nonprofit Finance Fund
  • The Colorado Health Foundation
  • The Northern Trust Company

Additional Support Provided by:

  • Harvard Kennedy School Government Performance Lab
  • Colorado Division of Housing and Colorado Governor’s Office
  • Colorado Housing Finance Authority
  • Denver Housing Authority
  • Denver Crime Prevention and Control Commission
  • Feasibility Grants: The Piton Foundation, Kaiser Permanente, The Denver Foundation, The Colorado Health Foundation, and the Rose Community Foundation
  • Transaction Structuring Grant: Nonprofit Finance Fund and the Social Innovation Fund at the Corporation for National and Community Service