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Investigating Housing Models for Accelerating PSH Production Final Report

Nichole Fiore, Kimberly Burnett, Laurie Gould, and Ciara Collins

Report

July 28, 2022

In 2019, the city of Los Angeles set aside $120 million to fund a pilot for innovative strategies to develop permanent supportive housing (PSH) as part of the Mayor’s Housing Challenge. To provide additional support to housing developers, the Home For Good Funders Collaborative, a partnership of public, private, and philanthropic funders from across Los Angeles, provided supplemental grants to housing developers that proposed innovative strategies for PSH. Additionally, during 2019, the Mayor’s Office created the Housing Solutions Team (HST), with philanthropic support. The HST is responsible for (1) streamlining processes and removing barriers that stand in the way of housing development, (2) using innovative strategies for housing development, and (3) creating policies that support the creation of more housing for people experiencing homelessness. The University of Southern California’s Homeless Policy Research Institute contracted with Abt Associates and VIVA Consulting to evaluate the efforts to fund new, innovative approaches to creating PSH, and the effectiveness of the HST.

After year two of the evaluation, Abt released some findings and recommendations, including:

  • The response to COVID-19 has included extended digitization of processes, and the Abt team saw opportunities to leverage these changes to streamline housing development moving forward.
  • Along those lines, the team also saw that the state of California and Los Angeles need to work together to simplify and streamline funding applications and awards processes for public funding sources (e.g., operating subsidies, LIHTC, soft loans). Developers repeatedly reported that multiple award processes are an enormous obstacle to accelerating housing development.
  • Staffing shortages affected developers and city agencies.
  • The HST was found to help developers, but it was seen as having limited leverage with other city departments that impacts the development process.
  • While modular construction was seen as a way of improving the speed and predictability of housing manufacturing, the team determined it will take time and continued collaboration between developers, manufacturers, and public funders to realize these benefits, and both the costs and durability of the housing could vary. More units will need to be built so better estimates can be developed.