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 seventh report to the General Assembly provides the state’s 2023 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 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 23 accomplishments include:

Success Towards Overall Goal of 5,000 PSH Units: As of Fiscal Year 2023, the state has developed 2,951, or 40 percent of the approximately 7,220 PSH units needed. This includes:

• 2,762 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: FY23 DBHDS PSH outcomes for the 1,921 individuals who were housed between February 6, 2016, and June 30, 2023 include:

• Nearly half (48 percent) of PSH participants were hospitalized in a state psychiatric facility at some point in their lifetimes.

• Two hundred ninety-three (293) individuals were discharged from a state psychiatric hospital into DBHDS PSH, and overall, 393 individuals in PSH for at least twelve months had a state hospital admission in the year before move-in.

• 91.6 percent of individuals served in PSH remained stably housed for at least one year.

• Only 9.6 percent of those served since program inception 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 $30.4 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 FY23, the DHCD-administered Virginia Housing Trust Fund (VHTF) was funded at $75m. DHCD allocated $59.5m towards the Competitive Loan Pool funding new construction or substantial renovations of affordable housing. The $59.5m was awarded to a total of 80 projects which created or preserved 42 units of PSH and 4,626 units overall. Some of these projects received tax credit awards referenced above during or previous to CY23, and not all PSH units funded are specifically held for those with SMI.

The remaining $12.9m was allocated to projects which aim to reduce homelessness, funding 100 targeted community efforts to reduce homelessness, including 34 rapid re-housing (RRH) projects, 25 permanent supportive housing (PSH) projects, and 9 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.
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(*1) For a full list of the steering committee agencies, please see Appendix B.