Hospital consolidation creates new opportunities for affordable housing

Healthcare strategists shared how counties can partner with health systems to build affordable and supportive housing Saturday at NACo’s Large Urban County Caucus meeting. 

The consolidation of hospital systems, restructuring, and closures create new questions about what to do with their real estate assets, noted Richard Cho, managing director at Manatt Health.

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“I think potential opportunity here is how they can proactively leverage their real estate properties before they have to undergo these restructuring decisions,” Cho said. “As a way to help improve their bottom lines, as well as address some of the pressures that they’re facing, whether that’s freeing up hospital beds or addressing their workforce challenges.”

Health system real estate provides a ripe opportunity for permanent supportive housing, which pairs affordable housing with wraparound support services and has been proven to better serve people who are homeless with complex needs and lower healthcare costs, Cho noted.

“Hospitals are now looking at how to repurpose their inpatient facility space and create housing, both for the workforce, as well as for the surrounding community, and I think both are needed,” Cho said.

In Colorado, Denver Health partnered with the Denver Housing Authority to repurpose a former administrative building on the health system’s campus into affordable housing for seniors and high utilizers of healthcare services, Cho said. In Cuyahoga County, Ohio, MetroHealth is also working in the housing space, funding affordable housing adjacent to its main campus that also features an “opportunity center,” that offers job training, and financial and digital literacy training.

Counties can support healthcare system roles in housing by helping them evaluate real estate assets and properties to determine best uses; providing legal and technical assistance in navigating property tax exemptions, zoning and partnership structures; brokering partnerships between developers and healthcare systems and providing formal support for funding and financing applications, zoning changes and community approvals, Cho said. 

People experiencing homelessness have a mortality rate 3.5 times higher than those who are housed, acknowledged John Vu, vice president of strategy for Community Health at Kaiser Permanente. While housing isn’t healthcare, good health is impossible without housing, and counties play a vital role, Vu said.  

“County governments need to be sort of the connective tissue in a way between the healthcare system, behavioral health, social services, community development and all these other parts of housing and homelessness work,” Vu said. The housing crisis “can feel very overwhelming. It’s so great and vast across the country, but we can really rely on counties to help stitch this together and bring partners together, listen to community needs and focus on what works.”