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Recovery’s Boarding House

5 min read

Though their business necessarily compels them to accommodate people during overnight stays, hospitals are the country’s least willing landlords, forced into the role by a to-them-toxic rapid evolution of healthcare laws, pharmacological potency, and one-way urbanization. Ever since 1986, they have been legally obligated to admit members of the public regardless of ability to pay, and to provide medical screening upon request regardless of ability to pay, resulting in over $38 billion (in 2016) spent delivering uncompensated care. And this cost is rising. Under the Affordable Care Act, nonprofit hospitals must conduct a “community health needs assessment” every three years or lose their tax exemption – and each time they do, their scope expands.

Seeing no end to their skyrocketing unreimbursable costs, they are now exploring being co-developers, a job for which they are wildly unsuited by their nature, organogram, business model and skill sets. Understandably enough, their progress is slow.

This is a pity, because nonprofit hospitals and health- care systems can have massive latent resources that could be levered by would-be developers:

  • Campuses with available land, potential developable floor area ratio that exists now or is created via upzoning and obsolete on-campus property that can be repurposed;
  • Ability to enter into long-term ground leases on any negotiable basis;
  • Nonprofit status and the ability to claim housing investments as charitable spending required under that status;
  • Capital, including long-term on-balance-sheet borrowing capacity at highly favorable rates; and
  • Demand aggregation, and the ability to be the anchor tenant in a multi-use development within their campus.

Yet the Low Income Housing Tax Credit-colored lenses through which we view these potential resources render both their value and their contours invisible to us. For this column, let’s take off our filters, see the proposition in its own right, and build the paradigm from first principles.

  • People need recovery housing after hospitalization and before they can resume (or regain) normalindependent living;
  • During their convalescence, recovery is top priority; everything else is secondary;
  • They will appreciate help doing things they might ordinarily do for themselves, if that help is given by people whom they see as being genuinely on their side; and
  • Most of them revive from depression by socializing with people whose stories are like theirs. Call it the recovery boarding house. Now define it by its functional attributes:
  • Interim accommodations. Anywhere from two weeks to (say) three months;
  • Not a hospital, not a medical setting. A guest home for a sojourn;
  • Secure temporary rental tenure. The stay is a guaranteed and time-limited commitment;
  • Predictable vacancies. Hospitals will know when a recovery boarding house vacancy will be coming available, and can reserve it;
  • Personal private space. A fundamental right of independent adulthood, it also powerfully boosts both emotional stability and sleep – which are the two faces of Janus;
  • Onsite ‘services court.’ Most likely built atrium-style, with offices around the perimeter, where guests can get food, medical care, behavioral health support, transportation, life skills training and benefits access;
  • Easy socialization in the public spaces; and
  • Outplacement. Longer-term housing to which the guest can move to when his or her recovery boarding house stay is over.

Making the recovery boarding house work involves six operating roles, with some players potentially taking on multiple roles as the situation requires:

  • Homeless person. An individual who truly wants to be an active partner in regaining his or her independence, and who is therefore willing to commit to helping make this happen;
  • Personal guide/champion. A community-based provider who is or becomes the guest’s friend. On a journey through hell and back, every Dante needs a Virgil, a guide of compassionate reason;
  • Owner. A recovery boarding house needs a landlord and operator, with all the traditional landlord-tenant activities that implies. That owner needs a mission purpose. Large housing nonprofits and innovative public housing authorities are both natural candidates;
  • Services conductor. Just as a food court needs multiple restaurants, a services court needs multiple providers who come in as caterers, all as orchestrated and scheduled by not just a coordinator but the overall team leader;
  • Hospital. As urgent care providers (UCPs) with a mandatory duty to house, hospitals are currently losing their shirts as unwilling landlords, so they are both the recovery boarding house’s applications portal and its principal financial beneficiary; and
  • Transitional subsidy provider. The recovery boarding house guest will need an income subsidy to cover his or her boarding-house rent (including meal plan).

Necessary though it is, the recovery boarding house model will never be born via LIHTC channels, for so many reasons that listing them all would be wearisome. Despite these obstacles, bits and pieces of the model can be seen now in initiatives I’ve located among housing authorities, larger mission-oriented nonprofits, hospitals and health systems in places that include Austin; Baltimore; Boston; Boulder; Camden, NJ; Chicago; Denver; Long Beach, CA; Pittsfield, MA; Sacramento; St. Louis; and Worcester, MA.

Put it all together and the recovery boarding house model can change someone’s life. “It was the team aspect that helped a lot,” says Camden Housing First customer Robert Jackson. “Not wanting to disappoint the team. Everybody’s going to bat for me, I better take care of myself, do what I have to do.”

Affordable housing world, it’s time for us to step up to the plate.

David A. Smith is founder and CEO of the Affordable Housing Institute, a Boston-based global nonprofit consultancy that works around the world (60 countries so far) accelerating affordable housing impact via program design, entity development and financial product innovations. Write him at [email protected].