More health systems are investing in affordable housing

According to Sisson, affordable housing allows hospitals and health systems to invest capital from their cash reserves while also meeting their nonprofit community benefits requirements. Recently, more health systems have been partnering with developers to build affordable housing projects to improve patients' health in local communities.

For example, Aetna has invested significantly in an affordable housing project called H3C, with "H" representing health and "3C" representing commerce, culture, and community. The affordable housing project has 192 apartments, and residents have access to a medical clinic operated by DePaul Community Health Centers on the ground floor.

Researchers at the Louisiana Public Health Institute are also planning to study residents' health outcomes, and consultants at Health Management Associates will use anonymized data to determine how health systems can work with developers more effectively.

Separately, Kaiser Permanente has pledged $400 million to fund affordable housing. Through its Thriving Communities fund, Kaiser aims to build or preserve 30,000 housing units by 2030.

Similarly, the Healthcare Anchor Network, which is a national coalition of over 70 health systems, invested $450 million in affordable housing projects between 2017 and the end of September 2022. It has also invested in local economies, including commercial projects like grocery stores.

Health systems are "filling the gap that has been created by the financial sector not properly investing in affordable housing and the public sector not providing the necessary subsidy to make it all work," said David Zuckerman, president and founder of the Healthcare Anchor Network.

According to Peggy Bailey, VP for housing policy at the Center on Budget and Policy Priorities, partnerships between health systems and housing developers are "necessary" since "[i]t takes so many investors and so many types of funding to deliver an affordable housing development."

Hospitals "reinvesting in the places they serve is important," Bailey said. This is especially true if they're located in underserved communities.

Future opportunities

Hospitals and health systems are also considering developing affordable housing for their employees, especially if they are struggling to entice workers to move to an area. According to Sisson, housing shortages may be especially acute in rural areas, and these shortages can lead to longer commutes, significant overtime costs, and staff burnout.

More programs are also looking to build affordable housing for people who need specialized care. For example, the Hospital Partnership Subsidy Program in New Jersey has started to see proposals for specialized housing projects to support individuals with multiple sclerosis and Down syndrome.

Separately, Eric Muschler, director of housing and health equity for the Greater Minnesota Housing Fund, said the organization has launched a new initiative to educate healthcare professionals about the importance of housing to health equity. The initiative will also provide developers with loans to help cover any gaps in a project's fund.

"We need more capital, constantly, to do more housing," Muschler said. "We've got a housing system that's broken, and we need to think outside of just subsidies."

According to John Vu, Kaiser's VP of strategy for community health, building affordable housing is the first phase of addressing the current housing problem, but the next phase focuses on leveraging data from the developments to identify how future partnerships can improve communities' health and housing needs.

Stephany De Scisciolo, a VP at the nonprofit developer Enterprise Community Partners, noted that Kaiser has been collecting data from its affordable housing program for four years. Kaiser has also teamed up with the Enterprise for the Housing for Health initiative to evaluate how housing impacts health across 30 factors.

Advisory Board's SDOH resources

For more information on social determinants of health (SDOH) and how they can impact patients, check out these Advisory Board resources:

• Cheat Sheet: SDOH
• Expert insight: SDOH is a top priority for health system strategists. Here's why.
• Research: Connecting social determinants of health with medical outcomes
• Our take: How service lines can address SDOH
• Research: How to close the housing gap through strategic partnerships
• Expert insight: How these 2 health systems are helping cancer patients receive temporary housing

(Sisson, New York Times, 3/12)