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City initiating pay-for-success project

Thursday, March 28, 2019 by Jo Clifton

Council is moving forward on a new program designed to provide housing and supportive services for 250 chronically homeless citizens who frequently end up in jail, the emergency room, or both. What is unique about this program, called the pay-for-success model, is that investors put money in and the city, among others, will repay the investors only if positive outcomes are achieved as measured by an independent evaluator. Besides the city, the other entities that will repay investors include Travis County, Central Health, Community Care Collaborative, the Episcopal Health Foundation and the U.S. Department of Housing and Urban Development/Department of Justice. The city will put $1.2 million into the PFS reserve fund for the current year. Austin Public Health Director Stephanie Hayden reported in a memo to the mayor and Council that an additional $1.2 million would be available for the program each year through 2024. “The project requires $16.3 million in private funds, including $4.8 million in grants from the St. David’s Foundation and $11.5 million from national and/or local impact investors,” according to Hayden. In order to have a positive outcome, the previously homeless individuals would have to have a minimum of six months of housing stability before the city would owe any payments. The city’s first potential payment to an investor will be due in May 2021, assuming the program is launched in June. The state of Oklahoma is also trying a variant of the program.

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