An Innovative Path to Supportive Housing

Our guest blogger this week is Steve Lurie, the Executive Director of the Canadian Mental Health Association in Toronto, a post he has held since 1979. Steve mhc june 2011has played an integral role in the development of mental health policy both in Canada and abroad, writing and lecturing extensively. Notable contributions include principal authorship of Ontario’s Graham Report, Building Community Support for People (1988), technical assistance to the Senate Committee Report, Out of the Shadows At Last: Transforming Mental Health and Addiction Services in Canada (2006) and chairing the Service Systems Advisory Committee of the newly-established Mental Health Commission of Canada in 2007. Recently awarded the Canadian Mental Health Association’s CM Hincks award for national leadership in mental health, he shares his knowledge and expertise with students at the University of Toronto Faculty of Social Work where he is now an adjunct professor.

In his in-depth study of Toronto, The 3 Cities within Toronto, Income Polarization, international housing and neighbourhood expert David Hulchanski shows that Toronto is at risk of becoming a third-world city, where only a fortunate few enjoy prosperity, while the majority experience increasing poverty. Access to safe, affordable housing is recognized as an essential part of poverty reduction. Yet for the vulnerable group of people living with mental illness compounded by histories of homelessness, ensuring housing opportunities is particularly difficult. Today the situation is dire. People are often discharged from hospitals and safe bed facilities to homeless shelters or the streets. With a wait list for supportive housing at 8,000 and no increase in rent supplement funding in almost 10 years, current practice is not resulting in solutions.

In 2013, the Mental Health Commission report Turning the Key: Assessing Housing and Related Supports for Persons Living with Mental Health Problems and Illness identified the need for at least 100,000 new supportive housing units across the country to support 120,000 homeless and 520,000 people vulnerably housed and living with mental illness. Following the report’s release, a group of supportive housing providers partnered with MaRS Discovery District to investigate the opportunities to leverage private capital and impact investing to respond to this need. Together, we produced a report, Blended Financing for Impact: The Opportunity for Social Finance in Supportive Housing, with case studies exploring the potential of this approach.

It shows that housing is a good investment and that the social finance marketplace will grow from $3 billion to $30 billion over the next 10 years.

The message is clear that there is money available to finance new construction. However, a challenge remains: finding a way to ensure that rent and operating costs are covered either by government or philanthropy.

With this in mind, funding was received from United Way to study the feasibility of using a Social Impact Bond (SIB) for this purpose. Essentially, SIBs generate private investment to fund social programs, with governments providing repayment for successful programs that ultimately result in cost savings.

We are now building a model for an SIB using costing from the Mental Health Commission project National At Home/Chez Soi. This project was integral in proving the value of investing in housing and services, not only in cost reductions to the health and justice systems, but also in producing better social outcomes. Indeed, it is in meeting such long-term goals that the SIB offers the greatest potential benefit. While the At Home/Chez Soi findings did show a substantial cost savings was realized with high service users—an average savings of $23,000 per person—the achievement of 70% housing stability for SIB participants compared to about 30% for those in the control group is particularly promising.

The other significant issue is scale. 10,000 supportive housing units and support services would cost $3 billion over 5 years if capital costs were included and $954 million if costs were restricted to services and rent supplements. It remains to be seen what size of investment the private sector would support and what size governments would back.

Stay tuned. Our report will be available in August.