In Hospitals, Affordable Housing Gets the Long-Term Investor It Needs

Ce’Yann Irving, a mother of a 1-year-old daughter, pays $990 a month for a two-bedroom apartment on the site of a former dairy processing plant in the Central City neighborhood of New Orleans. She has amenities, like a 24-hour gym and an on-site community clinic, at arm’s reach.

“I’m a first-time mom, so if my daughter coughs too long, I’m trying to take her to a doctor,” said Ms. Irving, 30, who is a disaster case manager for Catholic Charities. “Here, I can literally walk to the clinic, and if there’s a wait, just wait in my own apartment.”

The affordable housing complex, which has 192 apartments and opened in January, is a joint project of Alembic Community Development and the Gulf Coast Housing Partnership, an affordable housing developer formed in the wake of Hurricane Katrina, in hopes of rebuilding the Gulf Coast region. The complex seeks to be a model for communities nationwide by linking stable housing to better health.

Aetna, a managed care organization that operates in the region, invested $26.7 million in the $80 million project, called H3C, whose “H” stands for health and the “3C” represents commerce, culture and community. Tenants and others in the community will have access to a medical clinic operated by DePaul Community Health Centers on the ground floor. Researchers at the Louisiana Public Health Institute will study patients’ health outcomes, and consultants at Health Management Associates will use the anonymized data to determine more effective ways that health systems can work with developers.

H3C is just one of many examples showing that health care systems are increasingly starting to see benefits in building affordable and safe housing, from the improved health of local communities to how much managed care groups benefit financially from those healthier populations. Those factors and others, including a shortage of housing for their own workers, have pushed health systems to become partners and investors in affordable housing.

Partnerships like this are “necessary,” said Peggy Bailey, vice president for housing policy at the Center on Budget and Policy Priorities, a think tank. “It takes so many investors and so many types of funding to deliver an affordable housing development.”