Denver Housing to Health Initiative

Last updated Wednesday, December 20, 2017

Quick Facts

Current Phase
Issue Area
Service Period
Project Scope
Implementation Start
Housing to Health Initiative building in Denver

Taxpayers end up spending millions of dollars each year on emergency services for homeless people.  In Denver, it costs approximately $7 million per year to serve just 250 homeless people with temporary fixes that do not ultimately help them lead safer or more stable lives.  The Housing to Health Initiative aims to provide much needed supportive services that will help keep Denver’s homeless population out of the criminal justice system, while providing stable housing for those in need.  Through a five-year, $8.7 million social impact bond, 250 individuals who frequently use safety-net services will receive Assertive Community Treatment, an evidence-based model designed to provide treatment, rehabilitation and support services to people with mental health needs, ultimately reducing time spent in jail, detox programs, and emergency rooms.  A successful outcome will mean a better quality of life for these 250 individuals and potential to broaden the program’s reach to a larger population in need.       


  • Market Overview

    • Year Launched
    • Service Delivery Term (Years)
    • Motivation for Project
      The City of Denver spends $7 million annually on emergency and criminal justice services for 250 chronically homeless people who lack access to affordable housing and supportive services.
    • Project Objective(s)
      Achieve housing stability; Decrease jail bed days; Access to affordable housing and supportive services
    • Individuals Served
    • Geography
      Denver, CO
    • Issue Area
    • Initial Investment ($ millions) [Note 2]
    • [2] This category captures the initial private investment raised to support the project that has the potential to be repaid if the project achieves its pre-determined outcomes. Many projects, particularly those in the supportive housing and health arenas, leverage existing public resources, such as subsidized housing and health insurance, to achieve program impact; the value of these resources is not included in these dollar values but are discussed in more detail in Sections 7, 8 and 9 of this report.
  • Project Partners

    • Service Provider(s) [Note 1]
      Colorado Coalition for the Homeless; Mental Health Center of Denver
    • Payor(s) [Note 2]
      City/County of Denver, Colorado
    • Transaction Coordinator(s) [Note 3]
      Enterprise Community Partners; CSH; Social Impact Solutions, Inc.
    • Evaluator [Note 4]
      Urban Institute
    • Validator [Note 5]
    • Project Manager [Note 6]
      Enterprise Community Partners; CSH
    • External Legal Counsel [Note 7]
      Kutak Rock
    • Technical Assistance Provider(s) [Note 8]
      Government Performance Lab
    • [1] Delivers program interventions to target population over the course of the PFS contract
    • [2] Makes payments when pre-determined outcomes have been met
    • [3]Roles and responsibilities may include: design and structure of PFS project and financing model; capital raise; stakeholder management; on-going performance management
    • [4] Design and implement plan for determining whether outcomes have been met
    • [5] Verify accuracy of data used in evaluation plan, or evaluation plan itself
    • [6] Intermediary during service delivery phase, and/or fiscal sponsor for project funds
    • [7] Provide assistance in drafting, reviewing and negotiating PFS contracts
    • [8] Provide support and expertise to project stakeholders in the project development and/or project implementation phases
  • Evidence and Program Design

    • Service Intervention(s) Model and/or Type
      Permanent supportive housing; Assertive Community Treatment
    • Evidence base for intervention
      Permanent Supportive Housing: 15 experimental/quasi-experimental studies [Note 7]; Assertive Community Treatment: 27 experimental/quasi-experimental studies [Note 8]
    • Has effectiveness of the intervention for PFS project target population been evaluated?
    • Has the service provider provided this intervention previously?
    • Is PFS project: Scaling an existing intervention by replicating at a larger scale? Demonstrating the effect of a new program model or combination of services? Transplanting an existing intervention(s) to a new target population and/or service delivery setting?
      Demonstrating; Scaling
    • [7] The evidence base for permanent supportive housing is summarized by the Washington State Institute for Public Policy, which includes a cost-benefit analysis based on studies using a comparison and treatment group, available at:
  • Evaluation

    • Evaluation Design Methodology
      Validated service provider data; RCT [Note 5]
    • Data Source(s) for Evaluation
      Service providers; Denver Sherriff Department
    • Outcomes Tied to Success Payments
      1) Housing stability; 2) Jail days
    • Outcomes Tracked, Not Tied to Success Payments
      Emergency services, shelter and criminal justice system utilization
    • Length of Evaluation Period
      5.25 years
    • [5] The evaluator will also implement a process study to collect data on program implementation. Data collected through this study will be used to institute mid-course corrections as necessary and help interpret results of the RCT.
  • Service Provider Characteristics and Service Delivery

    • Single or multiple service providers?
    • Service provider type(s) (nonprofit, government, private)
    • Service provider OR site selection method
    • Service Provider Experience with PFS Intervention
      Experienced providers of ACT, permanent supportive housing and other health and supportive services
    • Referral Method for PFS Target Population
      Voluntary enrollment of participants identified by Denver Police Department with referrals coordinated by Denver Crime Prevention and Control Commission
    • Did the project have a ramp-up phase? (Y/N; brief description)
      Yes: 6-month pilot period after project start date, prior to transaction launch; Individuals engaged during pilot period included only in housing success payments
  • Investors

    • Senior Investor/ Lender and Total Senior Investment ($MM)
      Housing Stability Outcome: Northern Trust ($3); Walton Family Foundation ($1); Piton Foundation ($0.5); Jail Bed Day Outcome: Laura and John Arnold Foundation ($1.7); Colorado Health Foundation ($1); Living Cities ($0.5); Denver Foundation ($0.5); Nonprofit Finance Fund ($0.435); ($8.6 total)
    • Subordinate Investor/ Lender and Total Subordinate Investment ($MM)
    • Deferred Fee Source and Total Deferred Fees ($MM)[Note 1]
    • Recoverable Grant Source and Total Recoverable Grants($MM)[Note 2]
    • Non-recoverable Grant Source and Total Non-recoverable Grants ($MM)[Note 3]
    • Guarantor and Guarantee ($MM) [Note 4]
    • Illinois Dually-Involved Youth Project
    • [1] Deferred fees are delayed payments for the services provided by service providers, transaction coordinators and/or project managers. Deferred fees are one way of structuring projects so that more stakeholders have a financial interest in ensuring project success.
    • [2]Philanthropies can use either their regular grant making protocols, or protocols for program-related investments (PRIs), to contribute to PFS capital stacks. If a foundation does not use a PRI, their investment may be structured as either a loan or a recoverable grant. The distinction between the two is in the expectation of repayment. A loan, even if from a philanthropic source, is expected to be repaid, and structured accordingly. A recoverable grant does not bear the same expectation of repayment.
    • [3] Non-recoverable grants are traditional grants contributed to capital stacks; if the project is successful and generates full repayment, the non-recoverable grants can remain with the service provider or project manager, or be recycled by the original funder.
  • Basic Repayment Structure

    • Initial Investment ($Millions)
    • Maximum Repayment Funds Committed by Payor ($Millions)
    • Full service delivery term (years)
    • Full repayment period (years)
    • Interim outcomes reported? Tied to payments?
      Yes/Yes [Note 6]
    • Sustainability/ Recycling of Funds
      None specified
  • Detailed Repayment Terms

    • Interest
    • Trigger for initial repayment of principal [Note 1]
      1) Housing Stability: Client achievement of 12 months of housing stability; 2) Jail Days: 20% reduction
    • Threshold for full repayment of principal
      1) Housing Stability: 83%; 2) Jail Days: 30% reduction
    • Threshold for full repayment of principal plus maximum success payments
      1) Housing Stability: 100%; 2) Jail Days: 65% reduction
    • Repayment timing
      1) Housing Stability: annually, starting after Quarter 6; 2) Jail Days: after Year 5
    • Return to Investor [Note 2]
      3.5% (expected rate of return)
    • Success Payment to Other Stakeholders? [Note 3]
    • [1] Initial repayment does not equate to full principal return. Investors may recover only part of their principal if projects do not meet a certain level of success.
    • [2] There is no standard methodology for calculating investor return. These numbers are what is publically reported, and comparing from one project to another may not be an apples-to-apples comparison for the reason of potentially different calculation methodologies. Calculation methodologies may be provided in investor agreements, which are not available publically and were not available for this report’s analysis.
    • [3] Success payments for other stakeholders such as project managers and service providers create a financial incentive for project success.
  • Project Costs

    • Project Development Costs Not Covered by PFS Capital Raise
      Evaluation design; Evidence review; Legal services; Government Performance Lab fellow; Transaction coordinator fees
    • Funding source(s) for project development costs, if any
      Urban Institute (partial in-kind services); Pro bono legal support; Social Innovation Fund; The Piton Foundation; Denver Foundation; Kaiser Permanente; Rose Community Foundation
    • Project Implementation Costs not covered by PFS Capital
      $10.8 million in housing vouchers; $5.2 million in Medicaid funding; Evaluation
    • Funding sources for implementation costs not covered by PFS capital
      State of Colorado; City of Denver
  • Results and Lessons Learned

    • Outcomes Measured
      1.) By 12/31/2017: 255 frequent users of emergency services in Denver were housed; 2.) After one year, 89% of participants had no exits; 3.) After six months, 95% of participants had no exits
    • Trigger for initial repayment of principal met
      1) 33 individuals stably housed for at least a year (6 planned exits, 1 unplanned exit) resulting in 12,457 days in stable housing 2) TBD
    • Outcomes payments made
      2017, Housing Stability Success Payment, $188,000 ($15.12 for each day each qualifying participant was stably housed)
    • Lessons learned in service of clients
      1.) Broad stakeholder engagement required, particularly with criminal justice system (PD, courts - DA/judges/pubic defenders, jail) to help with jail in-reach/access, sentencing and location of clients; 2.) Pilot period (ramp up) very helpful - in housing projects with new developments, plan for delays in construction
    • Partner-to-partner operational lessons learned
      1.) Simplify where possible: many project partners may make communications and decision making with stakeholders & investors difficult at times; 2.)Strive for contract consistencies: ensure similar activities have similar due dates/periods for delivery throughout all contract docs
    • Contract Amendments [Y/N; brief explanation]
      Yes - 1.) Evaluation plan changes: a.) pre-screening added for open felony charges in the last two years; b.) assisted living facilities added as stable housing source. 2.) Amendments to the Operating Agreement: amendments where made to replace SPV officers due to staff turnover (twice)
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