In 2017, the General Assembly requested that the Department of Housing and Community Development (DHCD) work with state agencies and other stakeholders to develop and implement strategies to expand opportunities for Permanent Supportive Housing (PSH)for individuals with serious mental illness (SMI). PSH is an evidence-based practice where housing is provided in conjunction with wraparound support and health services including rental assistance, and it demonstrates positive outcomes such as reduced hospitalizations and homelessness, increased housing stability, and improved behavioral and physical health. PSH still allows for individual choice and preferences around where housing is located and which service providers are utilized.

This fifth report to the General Assembly provides the state’s 2022 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(*1), which is composed of representatives from multiple state agencies, continues to meet regularly to guide this cross-agency collaborative work within the following five goals:

• 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 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 22 accomplishments include:

Success Towards Overall Goal of 5,000 PSH Units: As of Fiscal Year 2022, the state has developed 1,746 or 31 percent of the approximately 5,000 PSH units needed. This includes

• 1,648 PSH SMI units funded by state general funds appropriated to DBHDS,
• 128 Auxiliary Grant in Supportive Housing (AGSH) units, and
• 69 leveraged HUD Mainstream vouchers.

DBHDS PSH SMI Program Outcomes: FY22 DBHDS PSH outcomes for the 1,578 individuals who were housed between February 6, 2016 and June 30, 2022 include:

• Ninety-one (91) percent of individuals served in PSH remained stably housed for at least one year.

• Nearly half (49.1 percent) of PSH participants were hospitalized in a state psychiatric facility at some point in their lifetimes.

• Two hundred seventy-two (272) individuals were discharged from a state psychiatric hospital into DBHDS PSH, and 359 individuals in PSH for at least twelve months had a state hospital admission in the year before move-in.

• Only nine 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 $27.6 million.

VH Leasing Preference: In order to have a more significant impact, VH modified its CY22 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 2022, 30 deals/1,803 total units/191 target population units with 9% Low Income Housing Tax Credit (LIHTC) and 31 deals/4,260 total units/436 target population units using 4% LIHTC. A total of 3,058 total target population units have been funded with approximately 1,000 target population units placed in service to-date.

Virginia Housing Trust Fund (VHTF): In FY22, the DHCD-administered Virginia Housing Trust Fund (VHTF) was funded at $55m. DHCD allocated $44m towards the Competitive Loan Pool funding new construction or substantial renovations of affordable housing. The $44m was awarded to a total of 76 projects which created or preserved 313 units of PSH and 4,626 units overall. Some of these projects received tax credit awards referenced above during or previous to CY22, and not all PSH units funded are specifically held for those with SMI.

The remaining $11m was allocated to projects which aim to reduce homelessness, funding 100 targeted community efforts to reduce homelessness, including 14 rapid re-housing (RRH) projects, 18 permanent supportive housing (PSH) projects, and 14 underserved population innovation projects.

While not all of the homelessness reduction projects specifically target the creation of PSH for individuals with an SMI diagnosis, the homelessness data collected through Point In Time counts and other demographic surveys demonstrate some overlap between individuals experiencing chronic homelessness and individuals with SMI.

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.
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(*1) For a full list of the steering committee agencies, please see Appendix B.