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 fourth report to the General Assembly provides the state’s 2020 accomplishments as well as recommendations to continue to expand PSH to meet the long-term 5,000-unit need for PSH.

The PSH Steering Committee has 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 Interagency Leadership Team (ILT) approved the Action Plan. The Lead state agencies designated for the strategies provide regular updates that 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 20 accomplishments include:

Success Towards Overall Goal of 5,000 PSH Units: As of December 2020, the state has developed 1,264 or 25 percent of the approximately 5,000 PSH units needed. This includes

• 1,105 PSH SMI units,

• 120 Auxiliary Grant in Supportive Housing (AGSH) units, and

• 69 leveraged Mainstream vouchers.

DBHDS PSH SMI Program Outcomes: Outcomes for the 1,129 individual participants in the PSH SMI program, who were housed between February 6, 2016 and February 29, 2020 include:

• One hundred seventy-four individuals were discharged from a state behavioral health hospital into DBHDS PSH, and overall, 263 individuals in PSH had a state hospital admission 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-seven percent of individuals served in PSH remained stably housed for at least one year.

• Only 7 percent of those served have been discharged to an institutional setting or higher level of care.

• State hospital utilization decreased 76 percent the year after PSH move-in, resulting in avoided costs of $12.2 million.

VH Leasing Preference: In order to have a more significant impact, VH modified its CY19 Qualified Allocation Plan to require that every development awarded 9% LIHTC as well as 4% tax credit funding provide a PSH leasing preference for 10 percent of its units. In 2020, this resulted in tax credit awards for 196 preference units; 1,958 total units through the 9% and 236 preference units; 2,359 total units through the 4% program.

Virginia Housing Trust Fund (VHTF): DHCD received over $3.1 million in request for the $2.34 available in Homeless Reduction grants. There were 37 applicants or which 28 received awards. These projects are currently being implemented. In FY19 and FY20, DHCD’s homeless reduction grants served 417 households in the rapid rehousing program and 571 households in permanent supportive housing programs.

During the Special Session of the 2020 General Assembly, Governor Northam and the legislature approved $55 million for the VHTF for FY 21, a historic increase at a time when the need for affordable housing and permanent supportive housing could not be greater. Of the approved amount, $16,680,000 will be allocated for the production and preservation of affordable housing with an emphasis on PSH; $10,620,000 will be allocated for Homeless Reduction Grants that include funds for supportive services within PSH programs; and $500,000 will be allocated for predevelopment grants of PSH.

Mainstream Voucher Program: With the support of the state agencies, local Virginia Public Housing Agencies leveraged 1,071 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.

Building and Transforming Coverage, Services, and Supports for a Healthier Virginia Waiver: CMS approved Virginia’s High Needs Support benefit, which DMAS now expects to implement on July 1, 2022, will provide critical housing and employment support services to the Commonwealth’s high need Medicaid members, to address the social and environmental needs that impact health, wellbeing, and medical expenditures.

It is important to note that the state agencies that comprise the PSH Steering Committee were able to not only safely operate but continued to expand PSH programs for people with SMI and other vulnerable populations during the COVID-19 pandemic. This is a testament to the agencies’ collaborative relationships as well as the deep commitment of the staff.

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.