A new report out of SFU has validated innovative initiatives which aim to provide supportive housing for marginalized individuals in Vancouver.

SFU’s RADIUS Lab, in partnership with Ecotrust Canada, recently released a report called Pay-for-Performance Partnerships: A case study in funding for Supportive Housing. The report covers a feasibility study of the application of social impact bonds (SIBs) to the issue of individuals with severe addiction and or mental illness (SAMI) living on the streets of Vancouver.

The report suggests that SIB’s might be an important “jump-start” for providing people with SAMIs with affordable housing and supportive services.

The SIB model involves private investors who provide start-up funding to innovative social programs that aim to solve a persistent social welfare issue, and also save the public money long term. If the program is successful, investors are paid back out of public savings that result from the implementation of the program.

Normally, governments can’t afford to gamble on new social programs that have not been proven to work, explained Colin Stansfield, who co-prepared the report with Ecotrust Canada intern, Geordan Hankinson. The beauty of the SIB model, he says, is that it provides a non-philanthropic incentive for private companies to fund social projects. The report summarizes the SIB model as “privatizing risk and socializing benefits.”

The team’s research was based on evidence that came out of the At Home/Chez Soi study done by the Mental Health Commission of Canada, which provided proof that a “housing-first” approach to mental health and homelessness issues provides the most benefit for both the individuals it treats, and the public.

The benefit comes from a marked reduction in inappropriate use of social services, such as unnecessary time spent in hospital inpatient care, repeated encounters with police and the justice system, and frequent emergency room visits.

With a permanent place to live, marginalized individuals receive more consistent care, and can rely less on emergency services.

The first SIB ever implemented is an ongoing project in a men’s prison in the UK called the HMP Peterborough, which aims to reduce rates of reoffending among recently released prisoners. The project is slated to serve 3,000 individuals over a period of six years. If recidivism rates are reduced by 7.5 per cent or more by the end of the program, investors will be paid out of public savings at a maximum return rate of 13 per cent annually.

While SIBs have found success outside of Canada, the model has yet to be implemented here. This is where last week’s report comes into play: it provides academic evidence that the SIB model could offer a solution to Vancouver’s homelessness issue, by garnering enough funding to cover startup costs of supportive programs.

RADIUS Lab focused their study on Vancouver’s SAMI population in response to a declaration of a mental health crisis on city streets by the Vancouver municipal government in September, 2013. Due to a limited increase in funding available to deal with the crisis from the Ministry of Health and Vancouver Coastal Health, Stansfield says the benefits of having access to a large pool of private capital became even more apparent.

“The federal government has expressed an interest in innovative social funding, which includes SIBs,” Stansfield said in an interview with The Peak. “The point [of SIBs] is to attract new sources of capital, and to de-risk the uptake of these innovative service interventions into public policy.”

The report presents hope for homeless SAMI individuals in Vancouver, calling SIBs “a tool to model total system redesign, restructuring and redesigning how support systems are delivered to a target population.”