Research shows that permanent supportive housing (PSH) can effectively address homelessness. In the PSH model, affordable housing with no time limit is created through rental subsidies, and supportive services focus on such areas as mental health, substance abuse treatment, and employment. Providing people with a home and the option for services ensures they receive the care they need and that they aren’t relying on costly public services, such as emergency rooms, to survive.
In some jurisdictions, creating more PSH can be cost-neutral or even create savings because the costs of expensive public services, including criminal justice and health care, decrease as people move off the streets. But any potential savings may accrue gradually or go to systems other than the one footing the bill for the intervention. Because of these qualities, PSH can be difficult to scale or implement in new communities.
Because of its ability to cover up-front costs for a demonstrably effective program before savings kick in, pay for success (PFS) has emerged as one potential financing strategy to bring PSH to more communities and increase existing PSH capacity to serve new people. In June 2016, the US Department of Housing and Urban Development (HUD) and the US Department of Justice (DOJ) announced that they were awarding $8.7 million to seven demonstration sites across the country to use PFS to expand PSH.
The Urban Institute has conducted a national evaluation to understand how PFS was implemented in the different demonstration sites, capture the lessons learned across sites, and examine the feasibility of using PFS for a high-need, high-cost, homeless, reentry population. Through the national evaluation, HUD and DOJ sought to assess whether PFS is a viable financing model for increasing the scale of supportive housing for a reentry population. The evaluation documents the reality on the ground as each community began its PFS project, describes the projects that develop in each site, and, in hindsight, understand how each community’s unique context may have affected the PFS project as it moved through each phase.
Annual Reports
Evaluation of the HUD-DOJ Pay for Success Permanent Supportive Housing Demonstration: Years 4 & 5 Report
This report summarizes years 4 and 5 of the demonstration (2020–21) as the remaining sites continued to make progress in the implementation phase or transitioned from the pilot phase to full implementation, with special attention to the effect of the COVID-19 pandemic on PFS collaboration, planning, and implementation.
Evaluation of the HUD-DOJ Pay for Success Permanent Supportive Housing Demonstration: Year 3 Report
This report summarizes the grantees' progress in year 3 of the demonstration (2019) as four of the six remaining demonstration sites remained in the transaction structuring phase, including two that launched pilot programs. The two remaining sites continued to progress through implementation.
Evaluation of the HUD-DOJ Pay for Success Permanent Supportive Housing Demonstration: Year 2 Report
This report summarizes year 2 of the demonstration (2018) as most sites progressed from the feasibility to the transaction structuring phase, and the requirements, accomplishments and challenges grantees faced as they moved closer to implementing their projects.
Evaluation of the HUD-DOJ Pay for Success Permanent Supportive Housing Demonstration: Baseline Report
This report examines grantees’ early progress and challenges during the initial grant period (October 2016–December 2017) as sites established partnerships, gathered and analyzed data, conducted feasibility analyses, and worked toward launching their permanent supportive housing projects.
Related Publications
Pay for Success Permanent Supportive Hosing Demonstration Infographic
This infographic provides a quick glance at key project details and milestones. The graphic is updated annually; this version reflects progress through February 2024.
Data Use and Challenges Using Pay for Success to Implement Permanent Supportive Housing: Lessons from the HUD-DOJ Demonstration
This December 2018 brief discusses unique aspects and challenges of using cross-sector data to determine the feasibility of using pay for success to scale permanent supportive housing in a jurisdiction and how projects might continue to use data through implementation.
Project team:
Kelly Walsh—Principal investigator
Samantha Batko—Principal investigator
Katie Elder—Project manager
Brendan Chen
Anna Doñate
Devlin Hansen
Jesse Janetta
Pear Moraras
Mary Cunningham
Previous team members:
Brian Bieretz
Nicole DuBois
Matthew Eldridge
Lauren Farrell
Sarah Gillespie
Kaela Girod
Akiva Liberman
Evelyn McCoy
Owen Noble
Rudy Perez
Alexandra Ricks
Clare Salerno
Photo Credit: Maura Friedman/Urban Institute
