Using Pay-For-Success Financing For Supportive Housing Interventions

Overview

Paula Lantz and Samantha Iovan of the University of Michigan Research Hub published new findings in Behavioral Science & Policy as part of their ongoing study of pay for success (PFS) financing models for evidence-based interventions aimed at the social determinants of health. Lantz and Iovan used their innovative PFS surveillance system to identify strengths and challenges of several supportive housing interventions using PFS, and to assess whether PFS housing projects generally meet established criteria for improving social welfare.

Findings

As of May 1, 2018, 21 housing-related PFS projects have been launched globally, of which seven are in the U.S.:

All seven PFS housing projects include the delivery of evidence-based interventions to marginalized groups with complex needs. With the exception of REACH in Salt Lake County, all the projects use a housing-first approach combined with some variant of permanent or long-term supportive housing.

They deliver a range of supportive services to address the complex psychosocial, behavioral, and medical needs of the target population. Both nonprofit and for-profit investors have provided capital, and key agencies and organizations in the field of housing, including the Corporation for Supportive Housing, the Reinvestment Fund, and Enterprise Community Partners, have been involved in many of the projects. Success payments to the private investors are contingent on some measure of sustained housing in all but two projects.

Implications for Policy and Practice

Although PFS is in the early stages of development, evidence suggests it holds promise as a way to finance housing, a critical component of health and social equity. The long-term social, behavioral, and health impacts of these projects are not yet known, but it does appear that PFS has opened the door for evidence-based program delivery to populations who may not otherwise be served via traditional funding mechanisms. Although the early results are promising, the final evaluations will more fully reveal the potential of PFS financing for behavioral-based supportive housing and other social welfare interventions in high-need populations.