Report Shows Good Results in Denver’s Pay for Success Housing Model

June 20, 2024

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In 2022, a group of partner organizations launched Denver’s Housing to Health (H2H) pilot program to serve populations experiencing chronic homelessness. Particularly those who also experience a disproportionate share of arrests for offenses associated with homelessness and are at high risk for avoidable and high-cost health services.

“Our community has shown time and time again that when you offer housing and intensive wraparound services to individuals facing the most trying episodes of homelessness, you can save lives and build a more vibrant city,” said Mayor Mike Johnston. “In Denver, we believe that our toughest problems are solvable, and this innovative, Housing First model shows that we can deliver housing outcomes for Denverites that are not only successful, but reduce costs across the system.”

The program leverages local housing resources, $11.75 million from six private funders, including an impact investment from The Denver Foundation, and up to $5.5 million in the form of a Social Impact Partnership Pay for Results Act (SIPPRA) grant from the U.S. Department of the Treasury.

In 2016, The Denver Foundation had the opportunity to participate in funding the Denver Supportive Housing Social Impact Bond Initiative (Denver SIB). The success of this project showed a hopeful path forward as an innovative solution to address homelessness in Denver, and became the model for the Denver H2H program. Affordable housing is also a funding priority area for The Denver Foundation, so investing in the H2H program was a natural extension of its commitment to this issue. For this second round of investment, the foundation deployed funds from both its Impact Investing Pool and its Colorado Health Access Fund, along with a grant from an anonymous donor-advised fundholder. 

The H2H program is Denver’s second pay-for-success initiative, which means investors are paid back based upon participant outcomes, including increasing housing stability, reducing time in jail, and reducing emergency federal health care expenditures.

According to the first report from the Urban Institute research team conducting the independent evaluation, the program has had early success, achieving 29,459 days of housing for participants in its first six quarters, resulting in a payment to investors of $567,085.75.

The companion report on the H2H program model details partners’ initial success engaging and housing program participants. The report shows most participants—80 %—who entered housing were able to successfully retain their housing after six months.

The Urban Institute team’s evaluation work will continue through the end of the program in 2029 and will include reports on housing stability outcomes annually through the program’s completion. Jail day payment outcomes will be reported in 2026 and 2029, and Medicaid cost reduction payment outcomes will be reported at program completion. Subsequent payments to investors are anticipated to occur annually.