2017 Symposium Industry Report: Pay for Success

Implementing a Pay for Success Program

Communities who have identified and prioritized the need for affordable hous- ing in their neighborhoods may want to consider the potential for Pay for Success contracts to finance the construction or rehabilitation of affordable housing units, as well as resident services to assist low-income individuals and families. However, before a PFS project can be implemented, communities must consider if a viable opportunity exists. Preconditions Certain preconditions must exist before communities can seriously consider construction of affordable housing units. •  Sources of funding— Communities must examine how PFS con- tracts can be reimbursed. Funding can come from allocated fed- eral LIHTC, housing trust funds, as well as other state grants. Communities can also consider approaching philanthropic insti- tutions and charitable organizations for grants. Because PFS con- tracts are relatively new and many not-for-profit organizations are highly interested in its success, communities may be able to find foundations and organizations willing to invest significant time and money into implementing a PFS project. •  Target population— Communities must also consider who their housing intervention will affect. Do communities want to prior- itize Permanent Supportive Housing for the homeless? Others may wish to provide workforce housing to assist local workers with transportation and housing affordability issues. Some may choose to use PFS projects to provide resident services to cur- rently housed low income families, or otherwise upgrade stan- dards of living in public housing and private affordable housing properties. •  Institutional access— Communities will need support from an Intermediary organization familiar with the PFS model to put together project contracts and methodologies for evaluating successful outcomes. The University of Virginia PFS is one of a

44 Pay for Success & Affordable Housing | Stefano Rumi

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