Permanent Supportive Housing (PSH) is an evidence-based practice that meets the housing preferences of many individuals with serious mental illness (SMI) and demonstrates positive outcomes such as reduced hospitalizations and homelessness, increased housing stability, and improved behavioral and physical health. In 2017, the General Assembly requested the Department of Housing and Community Development (DHCD) work with state agencies and other stakeholders to develop and implement strategies to expand PSH for individuals with SMI. This third report to the General Assembly provides the state’s 2019 accomplishments as well as recommendations to continue to expand PSH to meet the long-term 5,000-unit need for PSH.

During CY 2019, the PSH Steering Committee established five goals to continue to expand PSH:

• Goal #1 - Increase Services and Supports to Assist Individuals with SMI to Gain Access to and Maintain Supportive Housing
• Goal #2 - Provide Capital Subsidies to Expand PSH
• Goal #3 - Increase Rental Assistance to make Units Affordable
• Goal #4 - Increase PSH through Preferential Access to Existing Affordable Housing Programs
• Goal #5 - Strategies to Increase PSH through Enhancing System Capacity

The Committee developed a three-year Action Plan with 57 specific strategies and action items to reach these goals. The Action Plan was approved by the Interagency Leadership Team (ILT). The lead state agencies designated for the strategies began providing quarterly updates which will be shared with the Housing Virginians with SMI Strategy Group.

Working collaboratively, the state agencies that comprise the PSH Steering Committee made significant progress towards meeting each of these goals. Highlights of the CY 19 accomplishments include:

DBHDS PSH SMI Program Outcomes: The PSH SMI Program currently has funding obligated to serve 1,027 individuals. Outcomes for the 950 individual participants in the PSH SMI program, who were housed between February 6, 2016 and July 1, 2019 include:

• One hundred forty-seven individuals were discharged from a state behavioral health hospital into DBHDS PSH, and overall, 228 individuals in PSH had a state hospital admission in the year before move-in.

• At least 95 individuals served in PSH were on the extraordinary barrier list (EBL) in the year before move-in.

• PSH providers are effectively prioritizing individuals with extensive histories of homelessness and repeated, long-term use of institutional care before move-in.

• Eighty-six percent of individuals served in PSH remained stably housed.

• Only 6 percent of those served have been discharged to an institutional setting or higher level of care.

• State hospital utilization decreased 82 percent the year after PSH move-in, resulting in avoided costs of $9.5 million.

• A DBHDS cross-system cost impact analysis identified a 29 percent decrease in private hospital, state hospital, jail, and Community Services Board (CSB) costs after one year of PSH.

• After PSH costs were included in this analysis, a total cost reduction of $1,375 was identified for each individual housed.

VHDA Leasing Preference: In order to have a more significant impact, VHDA modified its CY19 Qualified Allocation Plan to require that every development awarded 9% Low Income Housing Tax Credit (LIHTC) as well as 4% tax credit funding provide a PSH leasing preference for 10 percent of its units. In 2019, this resulted in tax credit awards for 183 units through the 9% and 270 units through the 4% program.

Virginia Housing Trust Fund (VHTF): Increased FY19 funds for this program allowed DHCD to expand the number of PSH projects awarded Homeless Reduction Grant services funds in 2019 to 12 and to increase capital funds awarded for PSH to 10 projects with 347 units.

Mainstream Voucher Program: With the support of the state agencies, local Virginia Public Housing Agencies leveraged 729 federally-funded vouchers to serve non-elderly people with disabilities who are homeless, institutionalized, at risk of either condition, or who will move on from a PSH/Rapid ReHousing program COMPASS Waiver: In anticipation of CMS approval of the Waiver, DMAS initiated discussions with state partner agencies to begin defining the specific services covered by the housing supports benefit, refining member eligibility and formalizing protocols for serving High Needs members.

Enhanced System Capacity: The establishment of the DBHDS Community Housing Office and the creation and hiring of a DMAS Housing Advisor will help the state move forward more quickly on the PSH housing and services goals.

Meeting the long-term need for PSH will require the continued support of leadership and the commitment of state and local public and private entities to make rental units available and affordable, to target those units to individuals in the state’s priority populations, and to provide readily accessible supportive services through the ongoing development of systems capacity and sustainable funding strategies.