Housing Madison's homeless

Did the city pick the right landlord for its groundbreaking program?

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Heavy tire tread marks in the dirt, frozen grass and the odd plastic bag dancing in the wind American Beauty-style is all the empty lot between Ramen Station and Oriental Food Market on South Park Street has going for it. For now, there is no apartment building. No formerly homeless tenants. No on-site social workers. For now, this is just a patch of dirt with a whole lot riding on it.

The empty space at 1202 S. Park St. is the site of a proposed 58-unit permanent supportive housing facility for some of Madison’s most vulnerable citizens, part of the city’s broader plan to alleviate the housing shortage. Problem is, the first two projects in Madison managed by the Chicago-based company Heartland Housing — Rethke Terrace on the east side and Tree Lane Apartments on the west side — have struggled to integrate into the community.

In the six months since Tree Lane started taking homeless families directly off the streets, reports of drug dealing, loud parties and fighting at the 45-unit housing facility have been commonplace. On two separate occasions, brawls involving more than 30 people broke out on the property. Rethke Terrace — a 60-unit apartment building for homeless individuals — has been similarly plagued by violent incidents since opening in June 2016, including two high-profile stabbings in July that prompted a temporary ban on guests.

“Certainly, two stabbing incidents within the span of a week will get people’s attention and contribute to the perception that there’s a significant problem,” says Jim O’Keefe, the city’s director of Community Development.

Amid rising public concern, Mayor Paul Soglin called a press conference at the end of November. Soglin told reporters he was taking the “extraordinary step” of assigning Deputy Mayor Gloria Reyes to work on-site to identify problems and curb law enforcement calls to the Tree Lane Apartments, and that she would stay there “as long as it takes.”

Soglin acknowledged that the stakes are high: Every negative headline about Rethke and Tree Lane casts doubt on the city’s long-term strategy to address chronic homelessness — Housing First. As he told reporters, “We’re talking about the viability of this program and our commitment to it.”

A Dane County employee who regularly visits both developments — and asked not to be named — put it this way: “People aren’t going to want to approve projects five, six and seven if the first three are absolute disasters.”

Housing First is a strategy that attempts to lower or remove barriers (such as sobriety and credit history requirements) and place homeless people directly into a living situation with “wraparound” support services, rather than moving them through different levels of transitional housing. The approach has been demonstrably successful in Arizona, California and Utah, and in 2008 the federal government started pushing for its national implementation.

Communities are now less likely to qualify for funding through the U.S. Department of Housing and Urban Development if they don’t adhere to the Housing First model. However, unconditional housing still rankles those of the mindset that homeless people must simply pull themselves up by their own bootstraps, according to Ed Mayer, executive director of the Butte County housing authority in Northern California.

“We all have different capacities and propensities, and as a civilized society we need to address the needs of those who aren’t fully capable of functioning, for whatever reason,” Mayer says. “If we want peace in our streets, we need to take care of our citizens.”

That’s why it’s called Housing First, not housing only. The model needs a strong foundation of support services in order to work, Mayer says. “There could be medical issues at hand, alcoholism, substance abuse,” he says. “All of these things are addressed by specific providers. If you don’t have enough services in a Housing First situation, you’re inviting trouble.”

Beverley Ebersold is the director of national initiatives for the U.S. Interagency Council on Homelessness, an organization that offers a Housing First checklist to help local governments roll out programs. She says more and more communities across the country are embracing Housing First — and when it’s done right, it works.

“The model has been incredibly successful,” she says. “People generally remain stably housed for many years.”

Madison got on the Housing First bandwagon about five years ago, launching a broad initiative intended to address the housing shortage and homelessness. The Common Council agreed to set aside about $4.5 million annually to support the expansion of affordable rental housing in Madison, and also set a goal to create a total of 1,000 new units, including 250 for homeless people. As Soglin touted in his press conference, the city’s affordable housing fund has since helped about 800 impoverished households gain stability.

To help realize its vision, the city put out a “request for qualifications,” asking interested developers to submit credentials for the city’s first Housing First development. “We weren’t asking prospective developers to propose [a project] to us, because we knew what we wanted,” O’Keefe says.

Five development teams responded, including some local providers and Heartland Alliance, a consortium of agencies that traces its roots back to 1888 and the pioneering social worker, Jane Addams. Most of Heartland’s housing projects are in the Chicago area, although it also has three in Milwaukee.

A committee weighing the applicants toured one of Heartland’s Milwaukee properties and was impressed, O’Keefe says. “We also saw the opportunity to expand the capacity in Madison by bringing in a new player, somebody that had successfully pursued federal housing tax credits,” O’Keefe says.

Leveraging those credits through the Wisconsin Housing and Economic Development Authority has been key to the city’s strategy, allowing the city to offset up to 75 percent of total project costs, according to O’Keefe. Rethke and Tree Lane were both financed this way, and so will Heartland’s proposed project on Park Street.

Madison contributed about $1.7 million to Rethke and $1.6 million to Tree Lane in low-interest loans. In both cases, about half of the loans will be forgiven if certain conditions are met; the rest is due only if the projects show a cash flow. The loans help secure tax credits that are sold to investors and pay for the bulk of the construction, O’Keefe says. A similar structure will be used to fund the Park Street development; the city’s $2.7 million loan was used to help secure $8.1 million in tax credits.

After 15 years, Heartland would be expected to take full ownership of the property, O’Keefe says. “A lot of people think this is a city building and if we’re unhappy with Heartland, we can just switch for a new property manager. That’s not the right way to think of the arrangement.”

Heartland collects rents from tenants mostly through federal Section 8 housing vouchers. The city also contributes a small amount of funding for services at both buildings.

All three of the projects are considered “permanent supportive housing,” but Rethke Terrace — a $8.9 million, four-story, 60-unit apartment building located off of East Washington Avenue near the Aloha Inn — is more comparable to the proposed Park Street project because it also serves single adults and is roughly the same size building. Tree Lane, located off of Mineral Point Road, serves families with children.

However, the concept is the same at all three properties, O’Keefe says: “We’re not just building housing, we’re calling for ongoing support services for the residents.”

Whether or not Heartland is answering that call is the crux of the issue.

Critics say the company has failed to provide adequate services at Rethke Terrace. O’Keefe says funding on-site social workers has been an ongoing problem, but now Heartland employs three full-time service providers — a program manager who is a certified alcohol and drug counselor, a licensed clinician and a case manager.

The city and Heartland initially sought to fund social services at Rethke through the county’s Comprehensive Community Services program. Eligibility for these services requires enrollment in Medicaid and an agreement to seek goal-oriented treatment, contrary to the low-barrier spirit of Housing First. According to the Housing First checklist, participation in services is not a condition of tenancy, though services are offered. Tenants don’t have to undergo cognitive behavioral therapy or substance abuse treatment, for example, if they don’t want to.

“Some of the difficulties Heartland has experienced at Rethke owes to the degree to which residents are willing to engage in the support services,” O’Keefe says. “They can’t be required to engage in those services, and because Heartland was a new entity in Madison, the relationship that exists between homeless persons and other service providers wasn’t there.”

As a new player in Madison, Heartland has also struggled to adapt to Wisconsin’s Medicaid program.

“In Heartland, you have an organization that is very familiar with the state of Illinois’ Medicaid program, and they’re learning that Wisconsin’s Medicaid program is not as robust in some ways, or as supportive,” O’Keefe says.

For the city’s part, O’Keefe believes it may have been “overly aggressive” in pushing Heartland to concentrate on housing chronically homeless people and serve, in ranked order, the most vulnerable individuals in the greater Madison area.

“We insisted that Heartland serve the very highest-need clients,” he says. “Now, we’re reconsidering whether that was a prudent approach.”

Taking someone off the streets and placing them directly into a more or less independent living situation isn’t always pretty, and the city anticipated a period of trial and error when it rolled out its Housing First program. Still, the volume of 911 calls at both Heartland properties has been alarming. Since opening in June 2016, Rethke alone has averaged about 20 calls per month, peaking in June (37) and July (49) of 2018.

The summer spike was “related to a couple of residents who are no longer there,” says Sarah Lim, a community development specialist with the city. One person was involved in both stabbings at Rethke, she says: “They needed a higher level of care; they were generating several calls per day.” Whenever possible, the city avoids evicting residents back into homelessness, so both residents have been transferred to different programs.

Lim says a 911 call doesn’t mean violent or criminal behavior was involved. Accidental calls and welfare checkups are common, as are reports of “unwanted persons” on the property — guests who are bothering tenants. About one in five calls for service at Rethke are for “disturbances” — usually, a conflict between two or more Rethke residents, Lim says. There were 49 such calls between Jan. 1 and Oct. 31 in 2018.

“By all appearances, most of these calls are not about the residents of this property, they come from the residents,” O’Keefe says. “It isn’t as though they’re impacting neighbors externally; it’s more a matter of conflicts and disputes among residents, or residents and visitors.”

From O’Keefe’s perspective, it’s always difficult to get a neighborhood on board with affordable housing, at least at first. Almost all of the city’s 14 projects have faced at times fierce opposition from residents, and permanent supportive housing is especially controversial. But that alone does not explain why residents of the Bay Creek Neighborhood are skeptical of the proposal for Park Street.

“There hasn’t been a lot of what I would characterize as NIMBYism,” he says. “I think residents around the Park Street site are reasonably asking, ‘Do we have this figured out?’”

TJ Mertz lives about four blocks away from 1202 S. Park St. and walks by nearly every day on his way to the bus stop. He doesn’t mind sharing public spaces with people who have a history of homelessness. “It’s not like homeless people have never been on Park Street,” he says. He welcomes more affordable housing in his neighborhood and thinks highly of Housing First. All that said, he doesn’t like what he’s heard about Rethke Terrace and Tree Lane Apartments.

“You hear reports of rampant drug dealing and use around the Rethke development — and I want to emphasize ‘around’ — and I would hope not to be finding needles and crack pipes on the streets,” says Mertz, a Madison school board member. “That would be worrisome. I don’t want to see that in my neighborhood.… The safety issues, I think, are genuine, and I’m not going to dismiss them.”

Like many of his neighbors, Mertz wants assurance that the same problems won’t emerge on Park Street, and that social services and security will be funded from the outset. “Anyone who has looked at Heartland’s record can’t help but be skeptical,” he says.

That’s essentially the stance of the Bay Creek Neighborhood Association. According to a survey conducted by the association in early 2018, 69 percent of residents support permanent supportive housing in the neighborhood. But the association voted on Dec. 6 to officially oppose the project until it is satisfied that adequate funding for social services and security will be provided. In a newsletter, the group cited “Heartland’s inability to successfully manage its comparable facility, Rethke Terrace.”

“People just want to make sure it’s done well and are concerned with the potentially negative consequences if it’s not,” says Ald. Allen Arntsen, whose district includes the Bay Creek neighborhood.

Arntsen shares the view that Heartland hasn’t delivered on many of its promises and he’s wary of the potential impact to surrounding businesses and neighborhoods. “I’d like to see them make changes at Rethke and Tree Lane and show that they know how to do this,” he says. “They’ve got to show me more. I understand it takes a while to set up something new and it’s a challenging population by definition, but they clearly have management issues.”

Michael Goldberg begs to differ. As vice president and executive director of Heartland Housing, he says the company is taking the time to fine-tune its housing and service proposals for 1202 S. Park St. before presenting them to the Urban Design Commission this year, taking into account the lessons learned at Rethke Terrace and Tree Lane Apartments as well as its projects in Chicago and Milwaukee.

“I wouldn’t call it trial and error,” he says. “We have 30 years of experience housing vulnerable populations, including the homeless and chronically homeless.… Some of the things we’ve done at Rethke and Tree Lane include making tweaks to the service model and how we bill for the services provided. We’ve looked at positions on our service team a little differently, and we’ve certainly looked at safety and security concerns inside the buildings and in the neighborhood.”

Specifically, the hours of security coverage have increased at Rethke, accounting for the fact that most calls for service are in the evenings and early morning hours. Now, security officers are on the premises from 5 p.m. to 5 a.m. on weeknights and around the clock on Saturday and Sundays. Heartland also boosted management staffing at both existing properties and intends to hit the ground running on Park Street.

“We and the city of Madison have committed to ensuring there is funding from the beginning so we can start with the services from day one,” Goldberg says. “I think that’s a critical example of how things will be different at Park Street.” He admits that there was a months-long period of building relationships with residents of Rethke, but now most are using at least some services at the property.

“We’re taking the most vulnerable people in Madison who are either living on the street or in shelters,” he says. “These are folks who have been cut off from resources and are dealing with the side effects of traumatic experiences. Engagement takes some time.”

Heartland doesn’t have forever to utilize the WHEDA tax credits. The company needs to spend 10 percent of total project costs by April and have the building completed and occupied two years after that. Meanwhile, the project still has hurdles to clear — the city’s urban design and plan commissions — and Alder Arntsen has made clear his intent to appeal an approval to the Common Council.

And so Heartland and the city must convince citizens and policymakers that moving forward with the project isn’t a significant risk. O’Keefe, for one, believes it can be done.

“I think if the city and Heartland were merely replicating what we tried to do at Rethke, there should be cause for concern, but that isn’t the case,” he says. “There are adjustments being made. We’re taking very seriously the need to learn from the mistakes and apply those lessons at Park Street, because we understand that if these three projects pose more problems in Madison, there won’t be a fourth.”

Although the city is moving ahead with the Park Street project — planning began even before Rethke opened — it is not proposing other Housing First projects at this time, O’Keefe says. “We don’t want to continue to produce permanent supportive housing units until we’re confident we can do what’s needed to support people living in those properties,” O’Keefe says. “That’s a direct consequence of some of the early struggles we’ve had.”

The failure of Housing First in Madison would be, first and foremost, a tragedy for people living on the razor’s edge of poverty. It’s hard to overstate how much it means for formerly homeless people such as Melisa, 52, to have a roof and four walls after spending countless nights under bridges, on riverbanks and in the woods.

Melisa grew up on Jenifer Street, played soccer for East High School, and studied graphic design in college. Either she doesn’t understand how she became homeless or doesn’t want to talk about it. “I went through some situations,” she says vaguely. But she knows the streets were harsh. She made and lost friends. Some died. And she was highly vulnerable herself: One night, she was kidnapped and sexually assaulted. “We just survived,” she says.

She moved into Rethke Terrace about a year ago. “It felt like a prison at first,” she says, but then she realized “people are here to take care of me.” She describes a comfortable living experience and a built-in community. Many of the friends she made on the streets live at Rethke now, too. “We cook together, we eat together, we watch movies together,” she says.

Housing First might look rough from the outside, but the model has already sheltered dozens of formerly homeless people in Madison from the trauma of the streets. Now they have a sense of stability — perhaps even a foundation to build upon. If they choose to use services, they do so on their own terms. That’s not to say there won’t be more problems. To some extent, 911 calls come with the territory because people like Melisa have extraordinary needs.

“We all have medical issues, mental health issues,” she says. “Just because somebody gets called here doesn’t it mean it’s bad.”