For three years, Monica Hyatt lived in “the jungle,” an infamous 68-acre homeless encampment along Coyote Creek in San Jose. Garbage and river rats surrounded her small tent. She saw someone get killed. Her diabetes worsened. She drank eight to 10 bottles of malt liquor a day to “stay numb.”
Eight months later, Hyatt lives in a modest one-bedroom apartment. She runs into friends from “the jungle,” but won’t give them her address. Her diabetes is under control, and she rarely drinks.
There are about 6,500 homeless people in Santa Clara County on any given night. About one-third are classified as “chronically homeless,” like Hyatt was. Too often, they shuffle between the streets, emergency rooms and jails. Their problems frequently worsen, and the costs add up. The county spent $3 billion on homeless services from 2007 to 2012; 5 percent of the homeless accounted for almost half the spending – an average of more than $100,000 a year.
Gary Graves, the county’s chief operating officer, wanted its programs to measurably improve the lives of the homeless and become more accountable. So it’s no surprise the county is the first in California to embark on a bold new social experiment to help the chronically homeless. Called “Pay for Success,” it is designed to drive government spending toward programs that work best for people who need them most.
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There are only seven such projects underway nationally. A government contracts with a nonprofit with a strong track record to deliver agreed-upon results, such as keeping homeless people housed and stable. The government does not pay until the results are achieved. Instead, foundations, banks and other outside groups provide the upfront funding.
If outside evaluators confirm the results have been achieved, the government pays back the outside groups. If the outcomes never materialize, the government owes nothing, and the outside groups foot the bill.
In Santa Clara County, Abode Services will help 150 to 200 chronically homeless people get into housing and stay there for at least a year, how long it usually takes for them to stabilize. Abode will target homeless people who are the highest users of county services, including emergency rooms and jails.
As for Hyatt, she laughed as she remembered her first lonely weeks in the apartment. “It was a trip,” she said. “But it’s a good trip I’d take again and again. I’m not going back.”
In a few years, Pay for Success may have us thinking the same way about our approach to tackling social problems.
Anne Stuhldreher is a senior program manager at the California Endowment, which helped fund the Pay for Success project.