Sherman, a Pay for Success tenant through a partnership with MHSA member agency HomeStart
The first-in-the-nation Pay for Success (PFS) initiative to address chronic homelessness, which is being implemented by the Massachusetts Alliance for Supportive Housing (MASH) for the Commonwealth of Massachusetts, focuses on providing low-threshold, permanent supportive housing to those who would otherwise rely on costly emergency resources, enabling them to address their often-complex health issues more effectively than they would on the streets or in shelters. The PFS initiative will provide at least 500 units of permanent supportive housing for up to 800 individuals over six years. MASH is an LLC - a wholly owned subsidiary of the Massachusetts Housing & Shelter Alliance (MHSA) - that is managed by MHSA, United Way of Massachusetts Bay and Merrimack Valley (United Way) and CSH.
The innovative PFS initiative leverages a mix of philanthropic funding and private investor capital from United Way, Santander Bank and CSH to provide the upfront funding for the initiative. The initiative also leverages public resources, including Massachusetts Rental Voucher Program subsidies from the Department of Housing and Community Development. MHSA’s advocacy throughout the PFS contracting process has resulted in the expansion of the Community Support Program for People Experiencing Chronic Homelessness (CSPECH) to additional health insurance providers in Massachusetts. The expansion of CSPECH means that more individuals will have access to Medicaid-reimbursed supportive services in permanent housing.
For this initiative, the Commonwealth contracts with an intermediary - in this case, MASH - that is responsible for operating the program. Investors provide upfront funding for the initiative. Then, if the program is successful, the Commonwealth will reimburse the intermediary, which will repay the investors. An independent evaluator, Root Cause, will determine if the Pay for Success initiative has achieved its goals.
The initiative is based on MHSA’s successful Home & Healthy for Good (HHG) program, which initially began as a pilot in 2006. Funded through a line item in the state budget, HHG provides flexible funding for permanent supportive housing for chronically homeless individuals. Since 2006, HHG has placed over 1,045 individuals into permanent housing. Results show a trend toward tremendous savings in health care costs, especially hospitalizations, when chronically homeless individuals are placed into supportive housing.
MHSA is grateful for the many public and private partners who have made this PFS initiative a reality.
Highlights of the October 2019 PFS Fact Sheet
In the six months prior to entering housing, the 903 individuals housed through the PFS initiative as of October 2019, had accumulated:
- 67,641 nights in shelter
- 4,060 days in the hospital
- 1,649 emergency room visits
- 1,275 nights in detox
- 746 ambulance calls
Of the 903 tenants, 702 have been enrolled in the Community Support Program for People Experiencing Chronic Homelessness (CSPECH), an innovation of the Massachusetts Behavioral Health Partnership and MHSA that is recognized nationally as a model for funding the support services component of permanent supportive housing with Medicaid dollars.
"The Massachusetts PFS Story: Social Innovation Financing as a Catalyst for Change?" - Journal of Affordable Housing and Community Development Law, Volume 27 Number 2
Effects of Social Innovation Financed “Housing First” Programs on Retention, Utilization of Services and Cost-Savings: The Case of the Pay for Success program - Social Innovations Journal, December 2017
"Chronic Homelessness: A New Solution to an Old Problem" - Jesse Marcus, United Way Blog, January 2017
"MA Pay for Success Worth Watching" - Deborah De Santis, CSH, The Huffington Post, August 2016
MHSA Launches Pay for Success Program to Combat Chronic Homelessness - Press Release, June 2015
"Patrick announces $3.5 million to reduce chronic homelessness" - Katie Johnston, The Boston Globe, December 2014
Massachusetts Launches Pay For Success Initiative to Reduce Chronic Individual Homelessness - Press Release, Commonwealth of Massachusetts, December 2014