Permanent housing for the homeless is a pressing issue. Chronic homelessness is a complex social problem which has produced a variety of societal and public policy responses in recent decades. Federal agencies, states and local governments, nonprofit organizations and the philanthropic community have worked hard to develop and implement programs to address its challenges and some progress has been made. A growing policy intervention is permanent supportive housing (PSH), which combines (1) the provision of non-time limited rental housing; and (2) the provision of an array of voluntary supportive services to improve the quality of life. PSH is funded by state, federal, and private agencies and is owned and managed by different local organizations. California, our most populous state, has a growing homeless population. HUD estimated in 2018 there were 130,000 homeless people and, significantly, the nation’s biggest share of unsheltered people, with nearly 70 percent living on the street. Recent local estimates are that there are 59,000 homeless people in the County of Los Angeles, of which an estimated 44,000 (75%) are unsheltered. Within the city, which is distinct from the county, there are an estimated 36,000 homeless, including 27,000 unsheltered, concentrated largely in the downtown Skid Row neighborhood.
CCC is considering an investment which will provide 275 units of Permanent Supported Housing in a new high-rise building in the Skid Row area in Los Angeles. The client has performed standard financial due diligence but has had limited prior exposure to the operational risks of dealing with the homeless and PSH. CCC seeks assistance with improving their due diligence by developing a multi-focused evaluation for future investments to ensure they select the best partners to provide long term support for housing residents and to manage the projects dependably, efficiently and with a sense of stewardship. Reliable partners are an essential component to future financing deals. The SIPA team will be providing the information performance and other data as well as evaluations of successful models — for CCC to perform their due diligence to provide confidence that this PSH project has the providers and management to succeed.