Denver Social Impact Bond — Supportive Housing for Chronic Homelessness
City of Denver / Colorado Coalition for the Homeless · Denver, CO, USA · 2016
Summary
The Denver experiment tested the Housing First model — giving chronically homeless individuals permanent housing without behavioral prerequisites — using a randomized design funded through a social impact bond. The results resolved a long-standing policy debate: providing immediate housing reduced, rather than rewarded, problematic behavior. Jail days fell 40%, emergency department visits fell 34%, and the resulting public cost savings were sufficient to repay bond investors and reduce net government expenditure. The study is also notable for its financing model: investors bore the upside risk of the intervention failing, aligning incentives around measured outcomes rather than program continuation.
Research question
"Does supportive housing (permanent housing + intensive case management) reduce jail days and emergency services use for chronically homeless individuals?"
Methodology
Intervention
Participants offered permanent housing immediately (Housing First model) plus integrated support services including mental health, substance use, and primary care; no sobriety or compliance requirements for housing
Assignment
Randomized controlled trial with wait-list control
Sample size
324 chronically homeless individuals with high service utilization
Primary outcome
Jail days; emergency department visits; housed nights
Effect estimate
Jail days: −40%; ED visits: −34%; housed nights: 83% vs. 37% at 24 months; net public cost reduction offset SIB payments
Decision
Denver expanded supportive housing units; social impact bond investors repaid based on achieved savings; model replicated in New York, Chicago, and Los Angeles
Result
Positive
Jail days: −40%; ED visits: −34%; housed nights: 83% vs. 37% at 24 months; net public cost reduction offset SIB payments
Evidence strength
Strong
Randomized trial, replicated across multiple sites or studies.
Replication status
Replicated
Institution
City of Denver / Colorado Coalition for the Homeless
Location
Denver, CO, USA
Year
2016
Policy area
Housing
Mechanism
Housing
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