The Potential of Supportive Housing

1. The Potential of Supportive Housing NM LEGISLATIVE HEALTH AND HUMAN SERVICES COMMITTEE Marti Knisley The Technical Assistance Collaborative October 15, 2008 www.tacinc.org

2. What is Supportive Housing A cost-effective combination of permanent, affordable housing with services that helps people with disabilities and persons with limited incomes who have needs for supportive services live more stable, healthy productive lives

3. What is Supportive Housing ? It is permanent, meaning each tenant may stay as long as he or she pays rent and complies with terms of lease or rental agreement It is affordable, meaning each tenant pays no more than 30% to 50% of household income Tenants have access to an array of support services that are intended to support housing stability, recovery and resiliency, but participation in support services is not a requirement for tenancy Options are available for adults who are single, those who choose to share housing, youth transitioning out of juvenile or protective services and families with children “Housing First” & “low demand” models provide access for tenants with long histories of homelessness, incarceration, foster care institutionalization, residential treatment and significant obstacles to housing stability often at much lower cost than they are being served in traditional care

4. Supportive Housing is Cost Effective Medicaid, health and other human services systems incur substantial costs providing care often with mixed success: Costs of serving homeless people with serious mental illness up to $40,000 / year or more– mostly in health care systems $28,000 annual costs in Maine– mostly health care in hospitals $28,000 average annual health costs for Boston street dwellers Health care costs for public inebriates typically exceed $8,000/year $46,700 average Medicaid charges prior to supportive housing move-in for chronic alcoholics in Seattle

5. Supportive Housing is Cost Effective Supportive housing significantly reduces the need for costly emergency care and hospitalizations: 45% fewer days of nursing home care and 42% fewer days inpatient hospitalization in Chicago 56% fewer emergency room visits and 44% fewer inpatient admissions in San Francisco 77% fewer inpatient hospitalizations and 60% fewer ambulance transports in Maine 34% fewer emergency room visits and 40% fewer inpatient hospital days in Denver Health outcomes improve with better engagement in more appropriate outpatient care However, cost offsets only work when persons getting the supportive housing intervention have used or will use public services

6. The NM Purchasing Collaborative’s Approach to Supportive Housing The Behavioral Health Purchasing Collaborative is taking a very proactive, sensible approach to supportive housing The Collaborative began this approach by developing a Long Range Housing Plan in 2007 that began with an assessment of need, an inventory of what housing and services resources exist and a blueprint for: capacity building, new and use of available development and rental resources and implementing best practice service approaches The Plan provided insight to opportunities for leveraging resources, drawing down federal funds and efficient use of existing resources ---with one caveat: these opportunities are tied to successful partnerships between the services system and housing development and management systems—the MFA, local Public Housing Authorities, Community Development organizations and developers

7. The NM Purchasing Collaborative’s Approach to Supportive Housing The assessment was also revealed: • Over 30,000 New Mexicans with disabilities living on fixed incomes at 30% or below the Area Median Income are in need of supportive housing • Vets, tribal members, families in the protective services system have high service needs and low incomes • Most New Mexico communities have little capacity and infrastructure to create and sustain deeply affordable housing with services attached to their housing • Rental resources, the backbone of any supportive housing plan are scare and need to generated for the Plan to be successful • Based on these assessments, the Purchasing Collaborative immediately began implementing the Plan with a FY 2008 funding request of $750,000 to high priority areas and a focus on creating partnerships and a focus on capacity building and creating rental resources tied to services

8. The NM Purchasing Collaborative’s Approach to Supportive Housing The $750,000 Allocation was targeted to: • $150,000 in MFA Pre-development grant funds that was awarded to two developers who agreed to target units for persons needing supportive housing • $250,000 for Capacity Building grants also administered by MFA to two organizations who are developing housing and targeting units for supportive housing • $350,000 to pilot Linkages, a new bridge rental subsidyprogram jointly administered by local housing administrators and service providers to test out the feasibility of model that utilizes rental subsides and services funds---ultimately leading to a largely federally funded program once capacity is established • This program began with serving 30 persons in the Silver City and Demming area, Santa Fe and Albuquerque • The program is focused on seriously mentally ill persons (including those with substance abuse disorders) who are homeless, those at risk of homelessness and off reservation Native Americans

9. The NM Purchasing Collaborative’s Approach to Supportive Housing • In FY 2008, CYFD utilizing $150,000 of their own operating funds developed a small 20 youth rental assistance/services pilot in partnership with the Supportive Housing Coalition of New Mexico to test out the feasibility of this model for youth transitioning out of the juvenile services and protective service programs in Albuquerque • Early indications from both pilots: this is a feasible model and should be expanded across the state • Armed with this Plan and experience with pilots, the Collaborative is moving forwarded with:---a new partnership for with MFA in their 2009 Low Income Tax Credit Program application giving incentives to developers who “target” units for persons with disabilities ---work with local communities to build capacity ---preparing to take advantage of federal funding opportunities

10. Federal Housing Actions: Potential for New Mexico We are entering into an unusually positive and active period of supportive housing activity at the federal level: Greater Congressional interest due to: major alliances among national policy, advocacy and trade groups, very positive outcomes of supportive housing and the housing and credit crisis creating a need for more affordable housing and jobs This interest has translated into: Passage of the Housing and Economic Recovery Act which includes the National Housing Trust Fund, the Neighborhood Stabilization Program and many other provisions Movement on the Frank Melville Act

11. Federal Housing Actions: Potential for New Mexico The National Housing Trust Fund (part of Natl. Housing and Economic Recovery Act): • 90% of the funds must be used for production, preservation, rehabilitation or operation of rental housing • 75% of the funds must benefit extremely low income households (people at or below 30% of the AMI) and all funds must benefit very low income households. • It will be distributed by HUD in grants to the states • The HUD Secretary will establish a distribution formula within 12 months and the state has two years to spend its allocation  • Funds will be available in 2010/funding is generated on Fannie Mae and Freddie Mac “transactions” • States need capacity to use funds within allotted timeframes

12. Federal Housing Actions: Potential for New Mexico Neighborhood Stabilization Program (part of the Natl. Housing and Economic Recovery Act): • A $3.92 billion CDBG program for the redevelopment of abandoned and foreclosed properties • Grantees are CDBG jurisdictions (both state and local) • Funds can go toward both single family and rental properties and 25% of the resources must benefit people at 50% or below of Area Median Income • Based on huge rush to get these funds into communities and create construction jobs, many CDBG requirements can be waived and there is no one-for-one replacement requirement • Natl. disability groups are working this week to proposes mechanisms to assure people with disabilities will benefit from this program

13. Federal Housing Actions: Potential for New Mexico Section 811 Reform: Frank Melville Act (HR 5772): • Section 811 is a federally funded, deeply affordable permanent rental housing program for people with disabilities. Funding covers housing production, rental assistance and services • This bill reforming the Section 811 program has passed out of the House and just introduced in the Senate • It authorizes a new and innovative Section 811 Project Rental Assistance Contract (PRAC) Demonstration program to create thousands of new Section 811 units each year without substantially increasing Section 811 appropriations levels by leveraging new set-asides of supportive housing units in federal Low Income Housing Tax Credit (LIHTC) properties and HOME-funded projects • This program uses a competitive funding process and states with supportive housing capacity will likely be more successful