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We had a question from one of our readers about “Housing First.” What is it – and how is it funded?

Housing First is an evidence-based intervention focused on the needs of chronically homeless individuals, including individuals with serious mental illness (SMI) and substance use disorders. About 30% of people who are chronically homeless have mental health conditions and about 50% have a co-occurring addictive disorder (see Current Statistics On The Prevalence And Characteristics Of People Experiencing Homelessness In The United States).

Housing First initiatives move individuals directly into permanent supportive housing that offers supportive services. But consumer choice is a key element of the approach – there is no requirement for enrollment or maintenance of treatment services.  The premise is, increasing housing stability is a necessary first step before addressing an individual’s mental illness and substance-related disorders. Using a “harm reduction” approach to alcohol and substance use, Housing First models then provide intensive case management and wraparound services.

How are Housing First programs funded? The interplay between comorbid behavioral health conditions, homelessness, and the absence of a sobriety or treatment precondition means provider organizations leading these initiatives must weave together a complex network of funding and agency partnerships. Typically, program funding includes:

  1. Medicaid for medically necessary behavioral and rehabilitative services, including mental health case management for tenants eligible and enrolled in Medicaid (only 35% of individuals with serious mental illness were Medicaid enrolled at time of entry into Housing First programs in a 2007 HUD study, see The Applicability Of Housing First Models To Homeless Person With Serious Mental Illness)
  2. State and local safety net funding for short-term and crisis needs, including medical services for those individuals not enrolled in Medicaid
  3. Foundations and other private sources to cover gaps in funding for operational costs and outreach efforts
  4. Federal funding for rental housing subsidization

According to the latest report from the National Alliance to End Homelessness (NAEH), homelessness in America is on the decline (see The State of Homelessness In America 2014). Not only did overall homelessness drop by 3.7% between 2012 and 2013, but the number of individuals who are chronically homeless declined by 7.3%. What is causing this decline? The NAEH credits a larger decline dating back to 2007, to successful efforts to move people into permanent supportive housing.

Housing First program successes have made them the permanent supportive housing intervention of choice. Success in retaining individuals in housing was deemed “unassailable” by the Office of Assistant Secretary for Planning and Evaluation (ASPE) as far back as 2011 (see Medicaid And Permanent Supportive Housing For Chronically Homeless Individuals: Literature Synthesis And Environmental Scan), and yet SAMHSA reports only around 100 programs are currently in operation (see Pathways’ Housing First Program).

For provider organizations interested in offering permanent supportive housing using Housing First, Medicaid expansion combined with new Medicaid service delivery mechanisms – health homes, enhancements to home and community-based services, and targeted 1115 managed care waiver demonstrations – will increase opportunities to partner with payers and communities in developing supportive housing service packages (see New Medicaid Options Give States Increased Services For Homeless Individuals). Housing First successes in reducing emergency room use and incarceration rates – 34% and 76%, respectively, by the Denver Housing First Collaborative (see Housing First Works) – will further raise the interest of potential partners.

If your organization is considering offering “Housing First” services, getting all the stars aligned is a big first step. As a place to start, check out:

For a more detailed look at Housing First initiatives, premium members can access our latest OPEN MINDS Market Intelligence Report: What Are Housing First Initiatives?.


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