Building Up: Developing a Supportive Housing Project Alison Recca-Ryan Leslie Wise John Rowland NATIONAL ALLIANCE TO END HOMELESSNESS CONFERENCE – JULY 12, 2005 Corporation for Supportive Housing

2 Overview of the Agenda Who is CSH Defining Supportive Housing –What is Supportive Housing –Population served Who Creates and Runs SH Models of Housing and Services The Environment for Supportive Housing –Systems Fragmented vs. Systems Integrated –Funding environment –Planning & Systems environment Small Group Break-Out Discussion Financing of SH

3 CSH helps communities create permanent housing with services to prevent and end homelessness Our Mission

4 Project development and finance assistance Organizational/industry capacity building Advocacy/public policy reform CSH’s Core Services

5 A cost-effective combination of permanent affordable housing with services that helps people live more stable, productive lives. What is Supportive Housing?

6 A Distinctive Solution Temporary/ Transitional Interventions Uncertain length of stay Program requirements Isolated Reinforce dependency Supportive Housing Stable, no time limits Independent living Belong to a community Personal responsibility for behavior and rent New approach to services

7 Who Lives There? Formerly homeless individuals, families, youth People with serious, persistent issues: substance use, mental illness, HIV/AIDS People being discharged into homelessness from the criminal justice system or other institutional settings

8  57%  emergency room visits  85%  emergency detox services  50%  incarceration rate  50%  in earned income  More than 80% stay housed for at least one year Supportive Housing Works for people

9  Increased property values  Neighborhood beautification  Lower crime rates  Overall economic impact  More effective use of public resources Supportive Housing Works for communities

10 Dedicated buildings Rent-subsidized apartments Mixed-income buildings Long-term set asides Single-family homes Supportive Housing Types

11 Flexible, voluntary Counseling Health and mental health Alcohol and substance use Independent living skills Community building Vocational counseling and job placement Services Make the Difference

12 In Supportive Housing, Tenants Choose to:  Access appropriate care for and manage chronic health and mental health conditions  Take steps toward achieving and maintaining sobriety  Achieve housing stability  Work  Socialize  Be leaders in their community  Connect with the wider world  Pursue goals and interests

13 “I have 2 years clean and sober, a steady job, I pay my own rent – all of which I could not have done without supportive housing.” Charlie Miller, Tenant Canon Kip, CA Tenant Commentary

Models of Supportive Housing

15 Models for Supportive Housing: Traditional Development Creates a permanent asset to the community Involves acquisition and construction and the full compliment of development activities. Can take 2-3 years (or more!) to develop Involves establishing on-going funding sources and providers for operating and services Creates a permanent asset to the community

16 Models for Supportive Housing: Traditional Development Developing Project Concept/Assessing Feasibility Building a Development Team Identifying and Securing Resources Program Design and Construction Preparing for Operations Lease-up

17 25 units Urban, single structure Combines Residential & Day Center Homeless individuals with HIV/AIDS On- and off-site services provided by consortium of local agencies TDC $4.5 million; HUD SHP, LIHTC, HOME, Balanced Housing, FHLB Center House, Asbury Park, NJ

18 Targeted tenancy: Formerly incarcerated men and women, including PWAs Model: Single-site supportive housing (41 units) and Shelter (18 beds) Funding: –Capital: HHAP, LIHTC, Historic Tax Credits –Operating: HOPWA, HUD S+C (pending) –Services: HUD SHP, HOPWA SPNS, HOPWA, Existing agency services The Fortune Society “The Castle”

efficiency apartments 50% for chronically homeless men and women, 50% for low income people Community room, linkage to healthcare, education, and employment services Faith-based sponsor Columbus, Ohio

20 Models for Supportive Housing: Accessing Existing Housing Sometimes referred to as “Housing First”, also might be referred to as Scattered Site Housing Integrates residents into the community Can “retrofit” existing affordable housing and add services in a single site Once secure rental subsidy, can move very quickly Involves establishing ongoing funding sources and providers for operating and services

21 Accessing Existing Housing: Opportunities Without Building Turn-key development –Don’t develop, but get the building…. Master Leasing –Often times fast and easy… Scattered-Site –The model of choice for many residents

22 Models for Supportive Housing: Accessing Existing Housing Accessing existing rental units in the community and adding wrap around services Integrates residents into the community Once secure rental subsidy, can move very quickly Involves establishing on-going funding sources and providers for operating and services

23 Using existing apartments in the community Provider does not own units but might master lease No rehabilitation or construction involved – take apartments “as is” Owner of apartments typically private landlords who own large and small apartment buildings or 2-4 family houses Scattered Site: One Example

24 The city of SF acquires sites for the DAH program through “master leasing” Most units have private baths and shared cooking facilities DAH housing presently includes: –The Camelot Hotel (51) –Windsor Hotel (78 units) –Star Hotel (54 units) –Pacific Bay Inn (75 units) –Le Nain Hotel (86 units) –Broderick Street Adult Residential Care Facility (34 units). Direct Access to Housing in CA

25 LA: “No Fail” Housing Lamp Lodge is the permanent housing component of LAMP Inc.’s continuum of housing opportunities for people with mental illnesses in Los Angeles All are homeless when they arrive, and have a history of mental illness; they may have substance use issues as well LAMP focuses on a philosophy of “no fail” housing and a “non-linear case management” model

26 Sunshine Terrace: A Partnership with a PHA in Ohio Columbus Metropolitan Housing Authority and the YMCA of Central Ohio partnered to convert Sunshine Terrace into supportive housing 50 units for formerly homeless, services and security, retraining of on-site staff Project is now fully occupied

Who Creates Supportive Housing

28 A wide variety of entities can create and operate supportive housing The deciding factors include the type of SH and the population to be served, the organization’s experience and capacity, the competitive environment, and even the funding sources Partnerships are also prevalent in SH creation Who Creates Supportive Housing

29 Mental Health and other Service Providers Homeless Service Providers NFP Affordable Housing Provider Public Housing Authorities Private Developers and Private Landlords SH providers who only create and run SH Who Creates Supportive Housing

30 In some locales, there is a targeted initiative which creates the environment for supportive housing creation: In CT, the state agencies came together to create a Demonstration and then the PILOTS initiative In NJ, the state created a “Long Term Support Program” and put out an RFQ to find providers In CA, San Francisco and surrounding counties have done targeted SH initiatives called HHISN Who Creates Supportive Housing

The Environment for Supportive Housing

32 Challenges to Supportive Housing Integrated services and supportive housing are products with proven effectiveness ending chronic homelessness – but without a system to produce them Siting/NIMBYism Services funding Sustainability Results take time Political will and support Often, success means using money for purposed that weren’t officially intended Systems Fragmentation vs. Systems Integration:

33 Systems Fragmentation vs. Systems Integration: Many systems share responsibility and serve many of the same clients Homeless services Social services Employment Child welfare Education Mental health Substance abuse Housing development and finance Rent subsidy Hospitals, clinics, public health Criminal justice

34 Supportive housing as “standard response” New and reliable sources of funding Streamlined process for approving service and housing funds Supportive housing as a tool for community development A Vision for a Better System

35  New federal, state, and local investments  Increased corporate and foundation funding  Pressure to access Medicaid and other mainstream funding sources for services and operation  Services for Ending Long-Term Homelessness Act  Modifications to Existing Sources – LIHTC, HUD McKinney-Vento Homeless Asst., DOL Funding Environment

36  New federal, state, and local investments  Increased corporate and foundation funding  U.S. Conference of Mayors  Interagency Council on Homelessness  New Freedom Mental Health Commission  Samaritan Initiative  Services for Ending Long-Term Homelessness Act National Momentum

37  City, County and State 10-Year Plans to End Homelessness  State Interagency Council on Homelessness  Continuum of Care Planning Groups & Process  State Policy Academies on Chronic Homelessness and Family Homelessness Local Planning & Momentum

Supportive Housing Development In Your Community: Key Partnerships and the impact of Federal, State, Local Environments Small Group Discussion

The Financing of Supportive Housing

40 Financing of Supportive Housing Supportive housing requires the financing of three distinct components – development, operating and services Generally the projects require deep subsidies and ongoing intensive services The average # of funders for a supportive housing project is 7 but it can range from 2 to 10

41 Financing Plan

42

43 Identifying & Securing Resources

44  Type of project  Population served  Eligible applicant  Experience and team  Compliance/regulations  Geography Funding Considerations

45 Capital – The Bricks and Mortar Capital costs are directly tied to the acquisition and development of the project, including “hard” costs and “soft” costs.

46 Capital Potential Funding Sources

47 Operating Subsidy The difference between the rents paid by the tenants and the cost of operating the completed building

48 Operating Subsidy Potential Funding Sources

49 Support Services What services will be made available to building residents  General Supportive Services  Independent Living Skills  Health Medical Services  Substance Abuse Services  Vocational Services  Services for Families

50 Support Services Potential Funding Sources

51 Challenges of Supportive Housing Complex Financing High Capital Costs  Community/program space, security measures, durable materials High Operating Costs / Low Revenue  Serves very low income tenants  Cannot carry debt  Needs deep rent subsidies Support Services  Few sources for non-institutional settings  Need long-term availability

52 Development (sources and uses) Operating (sources and uses) Services (sources and uses) Population (physical, financial, support) Property (rehab scope, acquisition price, site) Timing (when $ and resources) Organization (capacity, staffing, consultants, partners…) Community (input, approval, acceptance) The Development Puzzle

53 Michigan Example: Heritage H.O.M.E.S. Inc. Formed through the 1997 merger of two well established Western Michigan nonprofits New organization combined the missions of the original groups Selected by the Allegan County consortium as its nonprofit sponsor, developer, and property manager for supportive housing

54 Heritage H.O.M.E.S. Multi-Site Project Profile 47-unit multi-site project part of CSH’s Michigan Demonstration Project New construction, one-story units across five rural sites Target: people with special needs, people who are homeless, and those at risk of homelessness

55 Capital:  MI State Hsg Dev Authority (Home)  FHLB Affordable Housing Program  Allegan County General funds  Low Income Housing Tax Credit equity Total Capital Costs $2,800,000 $25,000 $15,000 $2,700,000 $5,600,000 Heritage Homes Scattered Site Financing Profile:

56 Operating: A capitalized revenue deficit reserve was established to maintain reduced rents for the units over the 15-year tax credit period. This reserve will act as a source of subsidy to the project and will offset the low rents. Rents are set at 30% of income for residents Heritage Homes Scattered Site Financing Profile:

57 Services  Community Mental Health Family Independence Agency  Family Independence Agency  McKinney-Vento Federal Supportive Housing Program Grant  Center for Independent Living  Allegan Behavioral Health  ACRDC (Transportation Grant) Total Service Costs $775,000 $200, 000 $276,000 $10,000 $15,000 $84,000 $1,360,000 Heritage Homes Scattered Site Financing Profile:

For More Information: Check out the following resources at  SH Financing Guide  Toolkit for Ending Long Term Homelessness  CSH Policy Pages