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. 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. This fourth report to the General Assembly provides the state’s 2021 accomplishments as well as recommendations to continue to expand PSH to meet the long-term 5,000-unit need for PSH. In order to enhance cross agency collaboration, the PSH Steering Committee was formed, which is composed of representatives from multiple state agencies. For a full list of the agencies and steering committee members, please see Appendix B. 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 FY 21 accomplishments include:

Success Towards Overall Goal of 5,000 PSH Units: As of Fiscal Year 2021, the state has developed 1,746 or 31 percent of the approximately 5,000 PSH units needed. This includes

• 1,557 PSH SMI units funded by state general funds appropriated to DBHDS,
• 120 Auxiliary Grant in Supportive Housing (AGSH) units, and
• 69 leveraged HUD 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 2021, this resulted in tax credit awards for 173 preference units; 1,730 total units through the 9% and 251 preference units; 2,501 total units through the 4% program.

Virginia Housing Trust Fund (VHTF): For the 2020-2021 program year, DHCD received twotimes the amount requested in 2019-2020, increasing from $3.1 million requested to $6.4 million requested. Historic increases made to the VHTF during the Special Session of the 2020 General Assembly allowed a total of 37 projects to be funded. The selected projects resulted in 102 targeted community efforts to reduce homelessness, including 15 rapid re-housing (RRH) projects, 12 permanent supportive housing (PSH) projects, nine innovative and pilot projects to serve older adults and unaccompanied youth ages 18-24 and two projects for the predevelopment of permanent supportive housing. These projects are currently being implemented. In FY20 and FY21, DHCD’s homeless reduction grants served 477 households in the rapid rehousing program and 382 households in permanent supportive housing programs.

In addition to those households served by the homelessness reduction grants, the VHTF also funded 25 projects in FY20 and FY21 that will produce and estimated 383 permanent supportive housing units. Among the VHTF allocation, $500,000 will be allocated for PSH predevelopment grants, supporting the development of future PSH units.

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, 2024, 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.