Why hospitals want to invest in affordable housing
Tech giants—including Microsoft, Facebook, and Google—have recently pledged billions of dollars to solve the affordable housing crisis, creating large loan pools for developers in a bid to help solve a problem exacerbated by their rapid growth.
Last week, a different coalition of corporate and community leaders made a smaller but no less significant pledge. A group of 14 of the nation’s largest hospital and health systems pledged to invest $700 million over five years on place-based investing in their communities. The investment focuses mostly on affordable housing, but also addresses access to health foods, entrepreneurship among women and minorities, and expanding childcare access.
Organized by the Healthcare Anchor Network (HAN), the new initiative seeks to inspire more health care systems—already important anchor institutions in nearly every community across the country—to leverage their employment, purchasing, and investment power to improve the health of their community.
By attacking the racial disparities in communities across the country—as well as the other root problems that influence health outcomes—with a holistic, long-term approach, the HAN hopes to ultimately improve local economies and create a healthier population that requires less emergency and acute care.
“We’re trying to think about this as a strategy,” says David Zuckerman, director of the Healthcare Anchor Network. “It isn’t a one-time check to the community. This should be one of the ways health systems go back to improving health and wellbeing for the entire community.”
The 14 health care organizations—including Kaiser Permanente, Boston Medical Center, and Trinity Health—carry considerable economic heft in their cities and communities, representing the largest private sector employers in California, New York, Massachusetts, Utah, and Wisconsin. Combined, the participating organizations in the HAN employ 1.5 million people and have more than $100 billion in investment assets.
Members of the HAN will invest a certain percentage of their investment portfolios in their communities over the next five years. Roughly half of the participating members have already begun investing. In Richmond, Virginia, the Bon Scours Mercy Health system has invested in the Maggie Walker Community Land Trust, which focuses in part on transforming vacant property into more productive uses.
Zuckerman argues that investments in housing aren’t just good for the community; they’re good for a health care system’s bottom line, too. While measuring a direct return on investment can be tricky, he says the goals of the wider campaign—keeping people in stable housing, increasing access to healthy food, creating neighborhoods where it’s safe to walk—lead to healthier lives and less emergency room visits and chronic diseases, such as diabetes.
Studies have shown that social, economic, environmental, and behaviorial factors—non-genetic influences called the social determinants of health—account for up to 80 percent of the health outcomes a community experiences.
“Housing is a tremendous issue across the country, and the federal government has simply pulled back from investing in housing,” Zuckerman says.
Many hospitals and health systems are moving toward treating patients with less resources to reduce the burden of expensive chronic treatment, which can make a financial difference for individuals.
“It’s a long-run game, not a short-term solution,” he says.
He also admits that health care systems historically haven’t always been the best partners with disinvested communities, but that has changed in recent years. The launch of this network is the first time there’s been a conversation in the industry about leveraging health care as a significant engine of economic revitalization.
The model already works. Urbanists and writers such as Richard Florida and James and Deborah Fallows have long spoken about how anchor institutions—such as universities, and large corporations—can help build community and revitalize local economies. Zuckerman hopes this become an industry standard for health care.
“Can we flip from applying Band-Aids to thinking about all the resources we have and leveraging them differently?” he says.