Permanent Supportive Housing: A Terner Center Report on the Impact of Funding on Resident Outcomes

When it comes to permanent supportive housing, what conditions provide the most support and offer residents the best chances for permanent housing? These questions are at the heart of a new UC Berkeley Terner Center on Housing Innovation study that examines data on operating and supportive services expenses in a cohort of seven affordable housing developers in the Bay area.

California now prioritizes the development of permanent supportive housing (PSH) units in its affordable housing programs. These units provide residents with a range of services that can include mental health and substance use treatment, case management and financial literacy classes. The Center has authored a new report, “Permanent Supportive Housing as a Solution to Homelessness: The Critical Role of Long-Term Operating Subsidies” that examines one aspect of the study: how access to funding impacts the outcomes for residents.

The study’s report, written by Carolina Reid, UC Berkeley’s Donald Terner Distinguished Professor of Affordable Housing and Urban Policy, describes how it found that “sustained investments in the day-to-day costs of operating PSH properties and providing high quality supportive services are critical to the long-term success of the PSH model.” The report’s key points include:

• Properties in urban areas, as well as those that serve multiple distinct homeless populations (e.g., those that serve transitional age youth, veterans, and survivors of domestic violence at one site), have higher costs than those focused on one population.

• Properties with lower resources have higher rates of rent arrears and moveouts, increasing the risk of returns to homelessness.

• It would be advantageous for the Department of Housing and Community Development to consider giving developers of PSH more direct access to additional funding for supportive services and to expand the limits for properties that require higher operating resources to meet residents’ needs.

• People experiencing chronic homelessness who move to PSH experience marked reductions in shelter use, hospitalizations, length of stay per hospitalization, and time incarcerated, resulting in a significant reduction in the cost of public services.

• Black and Hispanic people are most likely to exit PSH back into homelessness and experience worse health outcomes due to differences in how PSH and supportive services are provided.

• Residents consistently shared that they felt that they “had won the lottery” in receiving a permanent housing unit and highlighted the importance of being housed in improving their wellbeing and sense of self-efficacy.

The report concludes with recommendations for helping affordable housing developers solve the problems of insufficient funding for operating expenses. While this report focuses on the role of long-term subsidies in PSH, subsequent reports will focus on other factors that provide optimal outcomes.

Read the full Terner Center report here.