Permanent supportive housing (PSH)—permanently affordable housing paired with intensive case management and other supportive services—is one of the most effective interventions for keeping people with a history of homelessness and complex health needs stably housed long term. But does every resident of PSH need this level of support for life?
A new two-state analysis offers a clear answer: no—some people can and do move on from PSH services without ending up in the hospital or back on the streets. And this finding has significant implications for addressing the supply-demand gap for homeless services in the United States.
Using five years of linked Homeless Management Information System data, Medicaid claims, and affordable housing data from New Jersey and Pennsylvania, this study examined who exits PSH programs, what happens after they exit, and what factors predict “successful” exit (defined by the study team and their advisory board as “permanent housing without paired support services, with or without a rental subsidy”). Key findings from this study include the following:
- Successful exits from PSH to a lower level of care are occurring. Across both states, 11-14 percent of PSH residents exited to permanent housing without paired supports in the study period.
- Among this group, returns to homelessness were uncommon. The majority of those who exited PSH to housing without paired supports did not become homeless again – only 1 in 10 reentered homeless services in the 24 months after exit.
- Healthcare use remained relatively stable for this group. Patterns of health service use, including inpatient hospitalizations and outpatient care after PSH, were not substantially worse than patterns of use before or during PSH.
- Factors at the individual, program, and community-level predict successful exits. Successful exits were associated with younger age, being female, absence of substance use disorder, residence in programs with lower turnover, and residence in localities with more affordable housing. Black and Hispanic residents were more likely than white residents to exit successfully, though they also faced higher risk of returning to homelessness after exit. This pattern mirrors persistent racial and ethnic disparities in homelessness that has been documented in national data, which underscores important equity considerations.
Despite the model’s success at ending homelessness for high need populations, PSH beds remain in very short supply. Only a fraction of those who need this level of support will receive it. And that supply-demand gap could also grow if the current administration’s attempts to shift funding away from PSH programs to time-limited transitional housing are successful.
This study offers cautious optimism for addressing the PSH supply-demand gap. It suggests that some residents can move on from these programs without destabilizing their housing or health care use. But promoting successful transitions from PSH requires more than identifying who might be a good candidate for exit. It requires removing structural barriers and investing in transition supports.
To do this, the U.S. Department of Housing and Urban Development could expand Moving On initiatives, which pair housing subsidies with structured transition supports for residents who would like to move on from these programs. And state policymakers can seek funding for time-limited transition and aftercare services through Medicaid Section 1115 Demonstrations. While Medicaid does not currently cover housing costs, states can seek waivers to cover housing-related transition and tenancy supports that help enrollees stay connected to necessary health care services during the transition from PSH.
At the same time, policymakers must confront one of the most daunting barriers to successful exits: lack of affordable housing. In this study, PSH residents in more affordable rental markets were more likely to exit successfully. In high-cost housing markets, stable tenants may be unable to secure housing without a rental subsidy—and in communities without available affordable units, even with a subsidy, housing may be inaccessible to PSH residents who want to exit.
Without meaningful efforts to solve the affordable housing crisis, individuals who could safely transition to a lower level of care and save taxpayer dollars are likely to remain in high-cost PSH programs longer than necessary—not because they need ongoing intensive supports, but because there is nowhere else to go.
Expanding Medicaid to fund not only housing-related supports but housing itself could help to improve system flow. Ultimately, permanent supportive housing doesn’t need to be permanent for all. But to safely transition more residents out of these services and address the PSH supply-demand gap, policymakers will need to work together to create the affordable housing that makes these PSH transitions possible.