Hello, Mr. Chairman, honorable committee members and guests. 

My name is William D’Arcy.  I am honored to be invited to offer testimony on the status of the St. Leo Residence for Veterans that was developed as a pilot project under Public Law 107-95, the Homeless Veterans Comprehensive Assistance Act of 2001.

I am employed at Catholic Charities of the Archdiocese of Chicago and serve as the Chief Operating Officer of the Catholic Charities Housing Development Corporation in Chicago, IL.  I will give testimony about the pilot project at the St. Leo Residence for Veterans and Auburn Gresham Community Based Outpatient Clinic (Clinic) that Catholic Charities developed in Chicago, IL by working with the U.S. Department of Veterans Affairs (VA).

We at Catholic Charities of Chicago are committed to work toward the national goal to end chronic homelessness among veterans.  I am happy to report that we had a successful first year of operations at the St. Leo Residence and Auburn Gresham Clinic in Chicago, IL.  I will summarize my comments in three sections:  Project Planning & Construction, First Year of Operations, and Lessons Learned.

Section One – Project Planning & Construction

In November 2002, representatives of the Department of Veterans Affairs requested Catholic Charities of the Archdiocese of Chicago to join in a national pilot program aimed at developing affordable housing for homeless veterans.  Specifically, the pilot project included building a residence of 141 studio apartments for homeless veterans and an outpatient clinic for veterans partially funded through the Veterans Affairs Loan Guarantee program (P.L. 107-95). 

The Catholic Charities Housing Development Corporation (CCHDC) is the project sponsor. CCHDC has developed and managed affordable housing in Cook County, IL since 1985.   Presently Catholic Charities manages 24 affordable and federally assisted housing properties that serve more than 1,700 seniors, adults and families on a daily basis.  Veterans live in many of our buildings and three properties serve veterans by design.

Mission and Vision

The mission of the St. Leo Residence is to furnish housing for homeless veterans, and the Auburn Gresham Clinic provides medical services, mental health counseling, job search assistance and case management supportive services.

The vision is to attract homeless veterans to live at St. Leo Residence in a safe and sober environment while they obtain employment, improve their ability to live independently and attain financial stability.  It is also expected that thousands of veterans from the south side of Chicago will travel to the nearby Auburn Gresham Clinic to receive primary care, mental health, benefits assistance, employment assistance and related services.

The Unmet Need

The Department of Veterans Affairs estimates there are as many as 154,000 homeless veterans in the United States and approximately 800 homeless veterans in the Chicago area.

In addition, the Veterans Integrated Service Network 12 reported that a zip code analysis of Chicago veteran patients found over 70,000 veterans residing on the south and southeast sides of Chicago.  This group is served by the Auburn Gresham Clinic.

Building Sites and Construction

The St. Leo Residence is located at 7750 S. Emerald Avenue, Chicago, IL and was built on the site of a closed Catholic church procured from the Archdiocese of Chicago.  The Auburn Gresham Clinic is one block away at 7731 S. Halsted Street, Chicago, IL.

These sites were chosen because public transportation is available at the intersection of 79th Street and Halsted Street on the south side of Chicago.  Catholic Charities purchased the land and buildings of the former St. Leo Church complex. The Church tower was saved but the old church, convent and school were demolished to make way for the apartment building.  Catholic Charities purchased land on Halsted Street for the Clinic and its parking lot.

Construction at the St. Leo Residence began in June 2005.  Homeless veterans began moving in January 18, 2007 and the building was fully occupied in two weeks.  The Auburn Gresham Clinic was completed in late April 2007 and the Jesse Brown VA Medical Center began offering services at the Clinic on May 15, 2007.

Project Description

At St. Leo Residence, the formerly homeless veterans live in 141 studio units, each containing its own kitchen and full bathroom. The 65,632 square foot apartment building has four floors and provides common recreational, exercise and meeting areas.  The front door is monitored at the main desk on a 24 hour per day, 7 days per week schedule. Off-street parking is provided.

The Auburn Gresham Clinic is a two-story 15,800 square foot building.  The primary care and mental health services are located on the first floor.  Offices and meeting rooms on the second floor provide spaces for the Illinois Department of Employment Security, Veterans Benefits Administration, Veterans Resource Center, a computer training room, and an Illinois AMVETS service officer.  Off street parking is provided.

Purposes of the Housing

St. Leo Residence houses 141 formerly homeless veterans. It provides supportive services and counseling with the goal of making them self-sufficient. Each veteran is required to seek / obtain / maintain employment. Veterans are charged a reasonable fee for rent and must maintain strict guidelines about sobriety as a condition of occupancy.

Financing

Catholic Charities structured its financing plan with 10 layers of funding.  The cost for the St. Leo Residence and the nearby Auburn Gresham Clinic was approximately $20 million.

Subsidized Rental Income

Operating revenue is greatly enhanced through project based Housing Choice Vouchers from the Chicago Housing Authority for 50 units.  Recently, an additional 10 vouchers were received from the Rental Subsidy Program of the Chicago Low Income Housing Trust Fund.

Partners

This pilot project became a reality because it grew out of a public and private partnership.  Collaborators included: U.S. Department of Veterans Affairs, Archdiocese of Chicago, Catholic Charities Housing Development Corporation, Illinois Housing Development Authority, National Equity Fund, Park National Bank, Federal Home Loan Bank of Chicago, Chicago Community Trust, Illinois Department of Commerce & Economic Opportunity, City of Chicago Department of Housing, U.S. Department of Housing & Urban Development, U.S. Department of Labor and Hilton Chicago Hotel.

Section Two – First Year of Operations

The St. Leo Residence and Auburn Gresham Clinic project are viewed as quite successful in the first year of operations.  The project has been recognized by three groups already: the Chicago Neighborhood  Development Awards gave “Special Recognition;” the Institute of Real Estate Management presented its “Affordable Housing” award; and the 2007 Charles L. Edson Tax Credit Excellence Awards gave “Honorable Mention” to St. Leo campus.

Property Management

Catholic Charities Housing Development Corporation is the property manager for St. Leo Residence and the Auburn Gresham Clinic.  Catholic Charities provides five full-time staff plus two part-time staff, three of whom are veterans living at the residence.

Occupancy

St. Leo Residence averaged 98% occupancy in its first 12 months of operation. One measure of success is that 23 veterans (14%) moved out into permanent housing. Only seven veterans (4%) left the program because they broke the lease requirements.  Another success is that St. Leo Residence operated at breakeven financially after funding the escrow and reserve accounts.

Social Services

Catholic Charities provides four case managers, a job developer, a community liaison and supervisory staff that serve a tenant population comprised of chronically homeless and mentally ill veterans who are highly eligible and highly connected to veteran’s services.  In the first year, Catholic Charities found a need to expand its social service staff in response to the personal needs presented by the veterans.  Case managers maintained frequent contact with the veterans.

Clinic Services

Jesse Brown VA Medical Center reports that Auburn Gresham Clinic served 1,185 veterans in the first nine months of operation.  These same veterans had 4,951 encounters of service at the Clinic, including: medical health care, mental health counseling, Vet Center counseling and a computer training program. 

The Illinois Department of Employment Security reports that it assisted 312 veterans in job searches and that 45 (14%) obtained employment in the first nine months of operation.

Section Three – Lessons Learned

Several components of the project contribute to its overall success, namely:

Public & Private Partnership

Part of the success of the St. Leo Residence and Auburn Gresham Clinic stems from the public and private partnership that developed to support the project.  It must be noted that the VA’s commitment to this project was vital in assisting Catholic Charities to recruit others to join.  The project engaged 4 federal agencies, 2 State of Illinois agencies and the City of Chicago to participate.  In addition, private participants were 2 faith based groups, a foundation, a bank, the tax credit syndicator and a hotel.  Public and private partnerships are necessary but they can be quite complicated and require a considerable time commitment.

Financing

Part of the success relates to the 10 layers of funding that were assembled.  The VA’s ability to commit the first funding for the project was the key that opened the door to other sources of funding.  In addition, the commercial component of the Auburn Gresham Clinic is a stabilizing factor. The State of Illinois provided $10 million in federal low income housing tax credits to this project – one of its largest allocations ever.  Catholic Charities procured more than $4 million in donations to fill funding gaps.  If other pilot projects are to be built, a simpler financing approach must be found.

Housing Vouchers

Part of the success comes from having project-based housing vouchers to ensure operational funding.  While the first year had a breakeven financial outcome, housing vouchers provided only @35% of the rental income.  Low rents collected from veterans provided 65% of funding.  Such a small revenue budget cannot pay for both property management and social services. More housing vouchers and/or grants are needed or it is likely this project will fail.

Social Services

Part of the success comes from the large Catholic Charities social service team.  In the first year, 79 residents (48.5%) of St. Leo Residence obtained some employment – seasonal, part-time or full-time. Nearly all the veterans are receiving benefits.  This is a great achievement.  However, the cost of social services was in excess of $500,000.  These funds came from grants and donors – not from collecting rents from the veterans.  It is doubtful that Catholic Charities can sustain the first year level of social services for subsequent years because most grants and donations were one-time events.  Without social services, positive outcomes for the veterans are unlikely, thus, funding for social services is vital to future success.

Community Response

Part of the success comes from community acceptance of St. Leo Residence and the Auburn Gresham Clinic.  Being located in a neighborhood and near transportation is very important.  Benefactors of St. Leo Residence come from various areas: local businesses, church groups, and veterans groups are frequently generous with donations of food, clothing and financial support of social activities. Ongoing support from these groups is critical to helping the veterans.

Conclusion

We at Catholic Charities believe that our country needs more housing to address the problem of homelessness among veterans.  The St. Leo Residence and Auburn Gresham Clinic have made a real contribution to the national plan to end homelessness. The formerly homeless veterans are becoming viable contributors to our society.  We are willing to work with anyone you designate to review this pilot project in order to make the next project even more successful.  I urge the committee to promote this program, find a way to simplify its implementation and provide financial support for social services.  Thank you.