Housing paired with clinics seen as model to help people with needs

Ce'Yann Irving, a mother of a 1-year-old daughter, pays $990 a month for a two-bedroom apartment on the site of a former dairy processing plant in the Central City neighborhood of New Orleans. She has amenities, like a 24-hour gym and an on-site community clinic, at arm's reach.

“I'm a first-time mom, so if my daughter coughs too long, I'm trying to take her to a doctor,” said Irving, 30, who is a disaster case manager for Catholic Charities. “Here, I can literally walk to the clinic, and if there's a wait, just wait in my own apartment.”

The affordable housing complex, which opened in January, is a joint project of Alembic Community Development and the Gulf Coast Housing Partnership, an affordable housing developer formed in the wake of Hurricane Katrina, in hopes of rebuilding the Gulf Coast region. The complex seeks to be a model for communities by linking stable housing to better health.

Aetna invested $26.7 million in the $80 million project, called H3C, whose “H” stands for health and “3C” represents commerce, culture and community. Tenants and others in the community will have access to a medical clinic operated by DePaul Community Health Centers on the ground floor. Researchers at the Louisiana Public Health Institute will study patients' health outcomes, and consultants at Health Management Associates will use the anonymized data to determine more effective ways that health systems can work with developers.

H3C is just one of many examples showing that health care systems are increasingly starting to see benefits in building affordable and safe housing, from the improved health of local communities to how much managed care groups benefit financially from those healthier populations. Those factors and others, including a shortage of housing for their own workers, have pushed health systems to become partners and investors in affordable housing.

Partnerships like this are “necessary,” said Peggy Bailey, vice president for housing policy at the Center on Budget and Policy Priorities, a think tank. “It takes so many investors and so many types of funding to deliver an affordable housing development.”

Hospitals “reinvesting in the places they serve is important,” she said, especially if they're in underserved communities.

Kaiser Permanente, a managed care giant in Oakland, has committed $400 million to fund affordable housing through its Thriving Communities fund, which aims to build or preserve 30,000 units by 2030. And the Healthcare Anchor Network, a national coalition formed in 2017 with more than 70 health care systems focused on investing in local economies, has put more of its capital into housing, neighborhoods and commercial projects like grocery stores. From 2017 through the end of September 2022, the group's most recent data, the network has invested $450 million in affordable housing projects.

This type of long-term capital, usually in the form of low-cost loans, has become even more valuable during a period of higher interest rates, financial uncertainty and rising costs for builders. The costs of these developments is a huge undertaking. H3C, which was funded through government and private sources, was estimated to be $60 million before supply and inflation increased the budget by one-third.

Health systems are, however, not acting as banks, said David Zuckerman, Healthcare Anchor Network's president and founder.

“They're filling the gap that has been created by the financial sector not properly investing in affordable housing and the public sector not providing the necessary subsidy to make it all work,” he said.

A recently expanded pilot program through Medicaid, called the 1115 waiver, allows certain health care providers to use Medicaid money to provide temporary housing. Washington state has used this model, with federal funding for rental support and $141 million in state funding, to build new homes as a means of targeting populations with the most needs.

And a shortage of available housing for hospital employees has pushed for more developments. Kathy Parsons, a consultant and former vice president for CentraCare, a health care system in St. Cloud, Minnesota, said that getting health care workers to move to the area had been difficult and that the network had been exploring ways to work with developers.

More projects also are looking to build housing for people who need special care. In New Jersey, the Hospital Partnership Subsidy Program has started to see demand expand to suburbs, with proposals for specialized housing projects to support individuals with multiple sclerosis and Down syndrome. The program provides millions of dollars in government subsidies to help break ground in hospital investments in housing projects.

Barclay Place, the first project completed under the state's program, opened in Paterson in July. The 56-apartment complex has a wellness center and a number of units are set aside for residents with chronic health conditions. The project was developed through a partnership between the New Jersey Community Development Corp. and St. Joseph's Health, which will provide supportive services to the residents.

John Vu, Kaiser's vice president of strategy for community health, said this was the first phase of fixing the housing problem. The next stage, he said, will use the data collected at the developments to determine how future partnerships can better address communities' health and housing needs.