The Power of Partnerships: Solving a Challenge for Healthcare
As the affordable housing crisis escalates and labor markets get competitive, healthcare systems turn to multi-sector partnerships to build affordable workforce housing to sustain recruitment.
The current housing crisis has been decades in the making. The U.S. reportedly has a deficit of 3.8 million homes, with the greatest supply shortages at low-income price points.
Joseph Flahie, an ICU nurse at Jackson Memorial Hospital in Miami-Dade County, Florida had seen food and gas prices ticking up during the pandemic, but inflation literally hit home when his landlord raised the rent on his apartment by nearly 40%, from $1,725 a month to $2,400.
“We heard of some landlords doubling or significantly raising rents, but never thought we would be upended. Until we were,” he wrote in an op-ed published in The Miami-Herald.
Flahie and his wife, who is also a nurse, had no option but to move out of their apartment in downtown Miami with their two children. Now, instead of being five minutes away from the hospital he commutes one hour each way.
“While my family likes having more space, and the affordability is better, the additional time away from them is hard,” Flahie wrote.
Many reports focus on the lack of affordable housing in cities with large populations such as New York, Los Angeles and San Francisco, but it is clear that the housing crisis is also affecting healthcare access in rural communities.
“To provide the care needed by the people in our communities we rely on having a vibrant, regional workforce,” Carolyn Isabelle, director of workforce development at Dartmouth Health said. “In New Hampshire we are experiencing a significant shortage of housing inventory which is driving the price of available housing up to a point that is unaffordable for most.”
Isabelle noted that, over the past few years, Dartmouth Health has seen an increase in the number of people accepting jobs and then withdrawing their acceptance because they couldn’t find affordable housing within a reasonable distance to work. Moreover, many of the system’s employees live up to an hour away from the center, which adds complexity and cost to their daily lives, while reducing the system’s ability to provide medical care for the community.
“Recognizing the workforce barriers that the housing shortage presented, we knew we needed to take action immediately and also be involved in the short and long-term solution at the regional and state levels,” Isabelle said.
Dartmouth Health is one of a growing number of hospital systems working to address the social determinants of health (SDOH) by providing housing for its employees. Together with Citizens Bank, Hanover Co-op, Hypertherm, King Arthur Baking Co. and other local employers, the healthcare system has launched a $10 million fund which will enable developers to build apartment buildings targeted at renters with moderate incomes through low-interest loans.
The Upper Valley Loan Fund will help finance the construction of 260 apartment units in Lebanon, where Dartmouth Health is located, specifically for households that can afford rents between $1,200 and $1,600 per month in an area where rents range between $1,500 and $2,200 per month.
Dartmouth Health and its partners will receive a 1.5% return on capital with a maturity of 15 years, which will lower the cost of development and allow the savings to be passed along to renters in the form of lower rental rates. Evernorth, a Burlington-based nonprofit that facilitates financing for moderate-income housing projects in northern New England, will manage the fund and work with developers.
Gregory Norman, director of community health for Dartmouth Health said that, through the housing fund, the healthcare center can provide first-tier capital for workforce housing, minimizing the risks associated with development. With the capital in place, developers are better able to obtain additional funding from a bank, CDFI or housing development corporation.
Norman added that Dartmouth Health’s investment is a signal to its partners that the health center is creating capacity for different kinds of housing in the area.
The lender, Evernorth, designed and formed the Upper Valley Loan Fund, and will be responsible for implementing it. Deb Flannery, vice president-lending said the firm leveraged its existing relationships with the likes of Dartmouth Health and Dartmouth College and also built new ones in order to create the fund.
“Cross-sector collaborations help address systems fragmentation,” Flannery said, adding that, when programs are developed in silos, they can be less responsive. “By engaging across sectors we draw on the knowledge and perspectives from a broader group of stakeholders and identify opportunities for future collaborations. It creates relationships that can open doors, and the more we engage in these dialogues and cross-sector work, the better we will all be in serving our missions.”
Nancy Owens, co-president, noted that cross-sector collaboration is an exercise in ‘systems thinking,’ or looking at the world in terms of relationships rather than separate parts.
“We have these complex problems we’re dealing with and they require attention from an array of perspectives,” she said. “We need to collaborate to achieve this.”
The Rebirth of Workforce Housing
The term “workforce housing” has long been used to describe programs for households that earn too much to qualify for traditional affordable housing subsidies; usually between 80% and 120% of the median household income in a given area. However, the need for affordable housing has become so great that even giant technology companies such as Facebook, Google, Microsoft, and the Chan-Zuckerburg Initiative have pledged as much as $1 billion in funding to help build more middle-income housing close to their corporate headquarters.
Some public sector leaders have also turned to workforce housing initiatives to address the housing shortage in their jurisdictions as well. Washington, D.C. Mayor Muriel Bowser had, in 2019, proposed the establishment of a $20 million Workforce Housing Fund to help subsidize housing for city employees and working families. However, the city council opted to replace the fund with a $2.8 million tax abatement for private developers, allowing them to set their own affordable housing policies without local government intervention.
In rural communities, lack of access to vast sums of money or the assistance of high-profile political influencers, can contribute to significantly more difficulty providing accessible and affordable rental units for the people who live there. Moreover, the USDA’s Section 515 Rural Rental Housing Loan Program established to finance affordable rental homes in rural areas has been effectively defunded, leaving rural communities without the means to attract private-sector capital and other federal resources.
According to the National Low Income Housing Coalition, no rural rental homes have been built under the Section 515 program since 2012, leaving rural healthcare centers at a loss for attracting workers at all levels.
“The challenge in terms of finding housing runs from CNAs all the way to the CFO,” Marie Barry, director of community economic development at the Rural Wisconsin Health Cooperative, said. “When most medical school students graduate, rural Wisconsin is not the first place they’re looking at, so it’s an uphill battle to recruit clinicians into the community.”
Ninety-six percent of rural hospitals surveyed by the Chartis Group said they were having trouble filling nursing jobs, and more than one-third said they hadn’t been able to admit patients for as many as 60 days due to a lack of nursing staff. But healthcare providers are finding that multi-sector partnerships can make a difference.
The Impact of Collaboration
More than 1,000 miles west of Dartmouth Health, in Dane County, Wisconsin, a consortium of investors including local businesses and UW Health have been working to build 500 low-cost housing units in the county and maintain their affordability for at least 15 years.
Since its establishment in 2020, the Dane Workforce Housing Fund has loaned $2.9 million to two projects in the micropolitan cities of Fitchburg and Middleton and $1.3 million to two projects in Mount Horeb and Waunakee to support $57 million in affordable housing development. Of the 256 housing units developed, 241 are expressly for those making 80% or less of the county’s average income.
The fund, which invests in projects where the developer is unable to secure the necessary cash, equity or debt for subsidized units in a given project, is slated to initiate a second round of funding later this year or in early 2023.
Juli Aulik, community relations director at UW Health said “The value of the multi-sector partnership has been in attracting sufficient investment, creating a shared understanding of issues and ways to address them, attracting professionals with skills to advise on investments, and building relationships that continue into other aspects of community and economic development.”
“Recognizing our limited experience, the biggest challenge would seem to be the leadership to attract, secure, and retain multi-sector participation,” Aulik said. “We have been fortunate to have that leadership which has enabled our local effort to succeed.”
Barry noted that most of the rural housing development work that their cooperative has been a part of has involved local government partners, business leaders, public health departments and local economic development leaders. She added that the keys to the success of such partnerships in rural areas lie in the connections people have to one another and the sense of a shared purpose.
“I think healthcare organizations are more territorial in urban communities. There’s less incentive to collaborate and more capacity in institutions,” she said. “For rural healthcare organizations it’s the opposite: there are fewer resources and players present so collaborations aren’t optional; they’re necessary and part of the fabric of the community.”
Advancing Equity
It’s easy to look at workforce housing from a purely economic perspective but, at its heart, housing affordability is about health, no matter what the geographical location. A large body of research suggests that up to 80% of what is understood as “being healthy” is determined by what people eat, where they live and how much money they make. These social determinants of health are just as important for the people who keep hospitals running as they are for the communities they serve.
“Housing is a major multiplier of stress,” Norman said, noting that entry-level workers and those with front-line jobs experience the highest levels of economic burden and barriers to accessing services. “There’s a direct correlation to the burden of social determinants of health as you move further from where healthcare sits.”
Isabelle said that while Dartmouth Health is trying to address access to inventory and affordability through its housing program, the healthcare provider’s ultimate goal is to try to ease some of the stress that comes with relocation, better understand what is needed by its employees and layer support and services where they can.
She added that Dartmouth Health has made progress over the last 18 months in understanding and addressing its workforce housing needs, but that it has been incremental in the face of a wider problem.
Gretchen West, executive director of Healthy Homes at Nationwide Children’s Hospital in Columbus, Ohio, said that structural racism continues to impact the development of workforce housing in her community and, by extension, the social determinants of health for the people who live there. She noted that her work is focused primarily on the south side of Columbus and Linden, which are both predominantly Black communities.
“When we think about the south side, the reason why the foreclosure crisis hit so hard, a lot of it is based on race,” she said. “After a decade, digging out of 70 years of structural racism isn’t going to happen overnight. It’s been baked in over such a long time that, even though close to $40 million has been invested, I sometimes feel like we’re at the tip of the iceberg.”
“Things are harder a lot of the time, but it’s not insurmountable,” West added. “The work is complicated, nuanced and always changing.”
One such change, shared by Barry, has to do with health departments and coalitions’ newfound willingness to look at the health of the entire community, including social determinants of health such as housing, when drafting health improvement plans. Although she acknowledged the difficulties involved in expanding considerations of community health beyond factors such as behavioral health, drug addiction and obesity, she said that having a multi-sector coalition willing to take on an unfamiliar and challenging issue in the community is encouraging.
“For a local, health-led coalition to say ‘The community has said housing is a health need and we’re going to work on it’ definitely demonstrates an evolution in how communities and healthcare providers think about health,” she said. “It’s different from what they’ve done and shows a growth in understanding the linkages between social determinants and health outcomes. That’s a wonderful sign.”
