California accounts for 1 out of every 5 homeless individuals in the United States. According to the U.S. Department of Housing and Urban Development’s 2014 annual report on homelessness, approximately 114,000 people are homeless in California tonight, with more than 71,000 still unsheltered.
Nearly 10 percent of California’s unsheltered homeless population is located in San Mateo and Santa Clara Counties, where LifeMoves – one of the largest housing and supportive service agencies in Northern California – houses 1,000 people each night in 17 facilities. San Mateo and Santa Clara Counties are characterized by severe income inequity, where some of the wealthiest zip codes in the entire country are located within walking distance to zip codes with poverty rates higher than the national average.
To address this challenge, LifeMoves utilizes an innovative “Beyond the Bed” client service model, proven to succeed in returning 90 percent of families (and 70 percent of single adults) who graduate from LifeMoves interim housing programs to permanent housing and ongoing self-sufficiency. In addition to providing basic needs including shelter, food, and clothing, the “Beyond the Bed” model provides comprehensive supportive services designed to help each homeless individual/family return to self-sufficiency. Services include helping clients find employment, financial literacy courses, life skills workshops, childcare, health care and nutritional education, and housing search support.
Property expansion by LifeMoves over the years had left the organization with real estate debt at a blended rate of approximately seven percent and large balloon payments due in the near future, threatening financial sustainability. The senior management and LifeMoves board members were eager to refinance this debt both to reduce interest payments and reduce debt more rapidly, thus making the organization more financially sustainable.
The Packard Foundation approved a program-related investment (PRI) loan for a large portion of the debt to the newly merged LifeMoves to refinance its real estate debt: $3 million for a term of seven years at a rate of one percent interest. The savings, calculated from refinancing from seven down to one percent interest was approximately $500,000, which LifeMoves was able to redirect to client programming and services.
Savings from the PRI loan allowed LifeMoves to expand its comprehensive services, including programs such as educational summer camps for children living at LifeMoves facilities – children who otherwise most likely would not be able to attend summer camp. (A study by the National Center on Family Homelessness found that 1 in 30 U.S. children experienced homelessness in 2013). Summer Adventure Camp not only serves as childcare, allowing parents to work, seek employment, seek housing and more, knowing that their children are safe, but also is a vital step towards ultimately ending the cycle of poverty for these families. The STEM-based Summer Adventure Camp keeps homeless children on pace academically with their peers and helps them develop socially from an early age, making them more likely to succeed long-term, thus breaking the multigenerational cycle of poverty and homelessness. This PRI is one element of a larger effort by the Foundation to ensure the continued and improved access by clients to LifeMoves’ services.