Kaiser Permanente Puts $200 Million Into Low-Cost Housing

Rather than financing a new hospital wing or a cancer-treatment center, Kaiser Permanente’s latest investment is aimed at putting a roof over people’s heads.

The nonprofit health-care giant, which runs hospitals and health-care centers in eight states and D.C., today said it created a $200 million impact-investing fund to address housing. Citing affordable housing as a key factor in maintaining good health, the company will steer money in the fund to projects designed to reduce homelessness and assist people having trouble affording a house or apartment.

The fund will be carved out of the company’s assets and invested in projects in communities where the company has a presence.

The company has also joined Mayors and CEOs for U.S. Housing Investment, a bipartisan coalition of 15 city officials and companies that is pushing to increase federal support of housing programs.

“There is a national housing crisis now, particularly in our communities,” said Bechara Choucair, Kaiser’s chief community health officer. “That’s why we are jumping in. We hope other businesses will join us in making these types of housing investments.”

Choucair declined to provide specifics on how the money will be invested. Initial priorities will include preventing homelessness among low- and middle-income households, reducing homelessness by investing in supportive housing, in which residents have access to social services, and ensuring that affordable homes don’t have health risks and are environmentally sound. Kaiser Permanente said it created the fund because the federal government’s response to housing ills is inadequate.

Branching Out

Kaiser’s new fund reflects a renewed interest in housing among donors and a belief among health experts that social factors, such as education, crime, and housing, play a big role in determining a person’s health. In 2014, the Robert Wood Johnson Foundation made creating a “culture of health,” which seeks to address social causes of chronic illnesses the cornerstone of its work. And health-care providers like Aetna and Sutter Health have focused their philanthropic efforts on social issues, rather than things directly related to health care, like disease research.

Concentrating on housing can help a health-care system’s bottom line, said Nan Roman, president of the National Alliance to End Homelessness.

“People who live in substandard, inadequate housing often have stress-related illnesses, which are prolonged,” she said. “They’re less likely to have a regular physician, so they use the emergency room more, which drives up costs.”

According to a RAND study, nearly 600,000 people were homeless on any given night last year. Nearly one-quarter of those people lived in California, where Kaiser has a large presence.

The study found that Housing for Health, a supportive housing program in Los Angeles County, reduced emergency room visits by 68 percent and hospital stays by 77 percent.

Kaiser’s interest in housing comes as one of the biggest philanthropic investments in that cause winds down. Since 1999, the MacArthur Foundation has made housing grants and investments totaling $385 million. Three years ago the Chicago grant maker began to sunset the program. MacArthur isn’t making new grants in the area, but some existing investments and grants run beyond 2020.

Over the past few years, as MacArthur has pulled back to focus on other priorities, other donors have stepped in.

Matthew Desmond, a 2015 MacArthur Fellow, said foundation leaders are more attuned to the importance of housing. Last year Desmond’s book Evicted: Poverty and Profit in the United States, which chronicles the hardships faced by rental tenants in Milwaukee, won the Pulitzer Prize.

“We are coming to the realization that housing insecurity is at the root of a number of social ills, from educational inequality and health disparities to community vitality and fiscal responsibility,” he wrote in an email. “This means that a comprehensive anti-poverty platform must include programs that provide stable, safe, and affordable housing.”

Growing Focus

In 2015, a group of investors, including the Kresge Foundation, Goldman Sachs, and the Robert Wood Johnson Foundation, put forward $70 million over 10 years in the “Strong Families Fund” to finance the construction and rehabilitation of low-cost housing and support social services at the developments.

Tipping Point Community, a nonprofit that works to alleviate poverty in the San Francisco Bay Area, is more than halfway to a $100 million goal it set last year to raise funds to cut chronic homelessness in half.

In February, a coalition of nine foundations pooled $10 million to support nonprofits that advocate for people who are “precariously housed” and are on the verge of eviction. The group, called Funders for Housing and Opportunity, included grant makers like the Annie E. Casey and Bill & Melinda Gates foundations, which hadn’t previously concentrated on housing.

Last month the David and Lucile Packard Foundation responded to the huge increase in rents in the San Francisco Bay Area with two grants totaling $2.25 million to Silicon Valley @ Home and the Terner Center for Housing Innovation at the University of California at Berkeley to develop ways to make housing more affordable. Those grants follow a $5 million investment the foundation made in June to Housing Trust Silicon Valley. The trust would like to provide loans to complete 10,000 affordable-housing units in the next decade.

The Gates Foundation followed up in May with a four-year, $158 million commitment to help people in the United States move out of poverty. While housing isn’t singled out as a discrete program, Bill Gates and Sue Desmond-Hellmann, the foundation’s president, have both identified Desmond’s Evicted as a major factor in helping them understand the role stable housing plays in people’s lives. The foundation’s anti-poverty work will sustain data-collecting efforts like Desmond’s Eviction Lab at Princeton University, which has also received support from the Ford and JPB foundations and the Chan Zuckerberg Initiative.

Patients Sleeping Outside

For Kaiser Permanente’s Choucair, the connection between housing and health is clear. He spent his early career as a doctor in family practice. Some patients showed up at his Chicago office for exams and treatment. But a lot of the work, he said, involved meeting people in other places — under bridges and in soup kitchens. His homeless patients, he said, needed more support.

“If we truly care about health,” he said, “we have to be thinking outside the walls of our hospitals.”

Updates: This article has been updated to say the Mayors and CEOs for U.S. Housing Investment has 15 mayors, not 13, and Kaiser Permanente runs hospitals and health-care centers in eight states and D.C., not in nine states.