GRANT WINNER | HOUSING FINANCE
Gulf Coast Housing Partnership
Jackson, Mississippi | New Orleans, Louisiana
Health + Housing seeks to create groundbreaking value propositions for residents as well as health care payors by demonstrating the benefits of investing in affordable housing at scale. The model aims to promote agency and equity among residents by anchoring communities with access to affordable homes linked with culturally competent preventative health services.
Gulf Coast Housing Partnership (GCHP) was founded in 2006 in response to the devastation wrought by Hurricanes Rita and Katrina. Since then, it has worked across the region to pursue real estate development that propels sustained, transformative community revitalization.
GCHP has a real estate portfolio as diverse as their partners and the communities they serve from Texas to Florida. Developed or preserved projects, both completed and under construction, include:
- 3,150 affordable homes
- Nearly 360,000 square feet of community-serving facilities
- 1 million-plus square feet of real estate built to national green building standards
The organization has a track record in understanding investor needs and closing complex investments toward driving community and economic development. Since their founding, they have closed 53 large-scale rehabilitation as well as new-construction projects, with an average of over five sources of permanent debt, equity and grant funding per project.
Largely due to decades of systemic racism, Alabama, Louisiana and Mississippi are among the states with the nation’s lowest median incomes. Over half of Medicaid beneficiaries in these states represent communities of color who have faced historic barriers to health care, resulting in starkly different rates of mortality and life expectancy.
These Gulf South states face a need for over 220,000 additional affordable homes to meet demand. Closing that gap is challenging with significant conventional financing gaps due to the region’s economic realities, which are made worse by limited per capital federal funding, a lack of dedicated state funds and a dearth of philanthropic investors.
The Health + Housing innovation seeks to change the financing equation by attracting flexible below-market debt from health care payors – while creating robust community-based health care networks.
SOLUTION: HEALTH + HOUSING
Sourcing low-cost capital for affordable housing development from health care payors is not a new idea.
What sets Health + Housing apart is the understanding that getting to scale depends on creating an investment structure that the corporate treasury departments of managed care organizations (MCOs) can support – which includes understanding the limitations health care payors face in scaling investment. It also includes leveraging underutilized sources of available capital in the form of 4% Low Income Housing Tax Credits to transactions. The combination of these resources will be a gamechanger.
GCHP has laid the groundwork for Health + Housing. They have secured gap financing commitments from Medicaid MCOs for two unique pilot projects. The first will transform a blighted hotel in Jackson, Mississippi, into a development for seniors. It will be anchored by culturally competent community health workers, an on-site clinic and a data-integration network tracking projected health care savings to the MCO. The second development in New Orleans, Louisiana, will combine healthy housing with space for public health and health-data nonprofits in a community in which GCHP has partnered for over a decade.
“Our goal is to demonstrate that Health + Housing investments make a clear economic case to health care payors – and in doing so, create a market where scale has more to do with the economic returns on those investments than the philanthropic motivation of investors.”
― Kevin Krejci, Gulf Coast Housing Partnership
The Breakthrough Challenge grant will enable the team to build on its progress and proactively work with Medicaid MCOs to improve health outcomes and yield cost savings, while strengthening ties with local partners invested in their communities’ health and revitalization.
- Pearl Street AME Church
- Jackson Medical Mall Foundation
- Jackson-Hinds Comprehensive Health Center
- Alembic Community Development
- New Orleans Data Center
- Medicaid Managed Care Organizations
Health + Housing aims to close, scale and normalize affordable housing investments from health care payors – with an initial focus on Medicaid MCOs. Getting there requires the creation of a risk-sharing pool of capital to ensure debt terms that 1) Medicaid MCOs can provide at scale, given state Medicaid contract cycles and other business considerations, and 2) align with the Low-Income Housing Tax Credit’s 15-year compliance period.
Those terms will allow construction to begin on the Health + Housing pilots, integrating healthy design standards to reduce chronic illness and promote well-being among residents. The pilots will be informed by a data-tracking model that demonstrates the impact on residents’ health and cost savings to MCOs.
While carrying out the vision of introducing community health workers into underserved neighborhoods, GCHP will evaluate other potential health care payors, with the goal of increasing the Health + Housing pipeline by at least three new projects and two new health care payors during the grant period.
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