Permanent Supportive Housing Consulting — Re-entry & Affordable Housing Strategy

Frequently Asked Questions

Can a behavioral health provider bill AHCCCS for housing support services?

AHCCCS covers certain housing-related services including tenancy support for SMI adults, case management with housing stability components, and HRSN-related services under the 1115 demonstration waiver. Billing requires specific service authorization, medical necessity documentation, and enrollment under the correct AHCCCS service code. AHCCCS has also been expanding housing-related Medicaid billing through the Section 1115 demonstration. Hess III Consulting identifies which housing-adjacent services are billable under AHCCCS and designs documentation frameworks to support billing compliance.

How does the AHCCCS Housing and Health Opportunities (H2O) program work?

AHCCCS’s H2O program provides housing-related services for AHCCCS members at risk of homelessness or housing instability, including tenancy support services, rental assistance coordination, and housing navigation. It operates through a contract Program Administrator and provider networks. Hess III Consulting has deep knowledge of the H2O program structure, provider participation requirements, and how behavioral health organizations can effectively partner with H2O to serve their members.

Is Permanent Supportive Housing an evidence-based practice?

Yes. SAMHSA classifies Permanent Supportive Housing (PSH) as an evidence-based practice with a published KIT (Knowledge Informing Transformation) and a formal fidelity scale. The model pairs permanent, affordable, tenant-controlled housing with voluntary, recovery-oriented supportive services for people with serious mental illness, co-occurring SUD, chronic homelessness histories, and other disabling conditions. Peer-reviewed studies show PSH reduces emergency department use, inpatient psychiatric admissions, and incarceration while improving housing stability beyond 80% at 24 months. Hess III Consulting designs PSH programs against the SAMHSA fidelity scale so providers can document evidence-based practice for AHCCCS, HUD, and accreditation reviewers.

How does the Housing Choice Voucher (Section 8) program fit into a behavioral health housing strategy?

The Housing Choice Voucher (HCV) program — administered by local Public Housing Authorities under HUD — is the largest federal rental subsidy in the country and the most common pairing with PSH and behavioral health services. Tenants pay roughly 30% of adjusted income; the voucher covers the balance up to the local Payment Standard. Specialized voucher categories matter for behavioral health: HUD-VASH (veterans), Mainstream Vouchers (non-elderly persons with disabilities), Emergency Housing Vouchers (homelessness, DV, trafficking), and Family Unification Program vouchers (child welfare and youth aging out of foster care). We help providers build PHA partnerships, structure project-based voucher set-asides for supportive housing units, and design move-on strategies that free PSH slots while keeping tenants housed.

What grant funding is available for housing subsidies and rental assistance?

Beyond housing choice vouchers, the operative subsidy and capital streams for behavioral health and re-entry housing include HUD Continuum of Care (CoC) program funding for PSH, Rapid Re-Housing, and supportive services; Emergency Solutions Grants (ESG) for shelter and prevention; HOME Investment Partnerships and HOME-ARP for affordable rental development and tenant-based rental assistance; SAMHSA Projects for Assistance in Transition from Homelessness (PATH) for outreach to people with SMI; ADCRR Evidence-Based Housing and Re-entry funding for justice-involved populations; CDBG for capital and supportive infrastructure; and AHCCCS H2O housing-related services under the Section 1115 waiver. We have written and won applications across these streams and can map the right combination to a provider's population, geography, and service model.

What is LIHTC and how do behavioral health providers use it?

The Low-Income Housing Tax Credit (LIHTC) is the federal government's primary tool for financing affordable rental housing — administered by the IRS under 26 U.S.C. § 42 and allocated by state housing finance agencies (in Arizona, the Arizona Department of Housing through its Qualified Allocation Plan). Developers receive a 9% credit (competitive, deeper subsidy) or 4% credit (paired with tax-exempt bonds) that they sell to investors to raise equity, in exchange for keeping units affordable to households at or below 60% AMI for at least 30 years. Behavioral health providers don't usually develop LIHTC properties alone — they partner with experienced developers, secure supportive housing set-asides in the QAP scoring, and bring service contracts that strengthen the application. Harvard GSD Affordable Housing Development training, combined with Arizona ADOH QAP fluency, lets us position providers as credible service partners in LIHTC deals and structure the operating-funding stack (services, rent subsidy, operating reserves) so the supportive housing model actually works at lease-up.

What is an IDA and where does it fit in a re-entry or recovery housing plan?

An Individual Development Account (IDA) is a matched savings account for low-income households — typically a 1:1 to 4:1 match on deposits used for a qualifying purchase (first home, postsecondary education, or small business capitalization). IDAs are funded through HHS Assets for Independence (AFI) legacy programs, state programs, and increasingly community-based partnerships; participants complete financial education as a condition of the match. For re-entry and recovery populations, IDAs convert short-term stability (a job, sobriety, a voucher) into long-term assets that exit clients from subsidy. We integrate IDAs into re-entry and recovery housing plans so the housing intervention has a defined off-ramp rather than a permanent subsidy assumption.

How do you stack housing subsidies, services funding, and capital to make a supportive housing project actually pencil?

Supportive housing requires three independent funding stacks that have to be sequenced correctly: capital (LIHTC equity, HOME, HUD 811 PRA, CDBG, state housing trust funds), rent and operating subsidy (Project-Based Vouchers, Section 8, HUD CoC leasing, state rental assistance), and services (AHCCCS H2O, Medicaid case management, SAMHSA grants, county behavioral health authority dollars). Most failed projects fail because one of these stacks is assumed rather than secured — typically services, because behavioral health providers underestimate the operating cost of fidelity-level PSH. We model the full stack against the population's expected length of stay, service intensity, and Medicaid billable scope, then work backward to the capital structure that matches.