Denver officials preview performance‑based contracts for hotel and tiny‑home shelters, emphasize occupancy and outcomes

HOST presented proposed performance‑based contracts for Denver’s non‑congregate shelters and micro‑communities, emphasizing a shift from cost‑reimbursement to payments tied to outcomes.

Jeff Kositzky, deputy director for shelter and stability at HOST, said the briefing was informational only and that the contracts will be brought forward on a consent agenda in mid‑November. He said the proposal covers two hotel‑based adult shelters (about 471 units) and five tiny‑home micro‑communities (about 242 units), with an average contract cost shown in the packet of roughly $93 per person per night and 49 ADA units across sites.

Kositzky outlined four core metrics in the pilot performance contracts: nightly occupancy (90% target; 45% of total payment tied to occupancy), a rapid resolution conversation for new entrants (90% target; about 5% of contract value), housing‑focused case management (expectation that 80% of households receive at least one weekly housing conversation and providers paid per encounter with a target of four monthly encounters to draw full payment) and active enrollment in the community housing queue (MDHI) for 90% of shelter households. He described billing tied to a capacity tracker for occupancy nights and said providers will still be paid for the outcomes they achieve even if they fail to meet all targets.

The briefing included site‑level budgets and rate cards. For example, Host proposed Urban Alchemy as the new provider for the Aspen hotel in District 8 (289 beds) and said the year‑one budget increase for several sites reflects newly embedded security costs (roughly $1.3M–$1.4M at some sites) and cost‑of‑living adjustments. Host said smaller micro‑community sites may show higher per‑bed costs because of economies of scale.

Council members asked detailed operational and data questions. They sought clarity on the definition of “positive exits” (Kositzky said they are moves to permanent or stable housing, or transfers such as long‑term care, and that deaths will be reported separately going forward). Members also asked whether per‑night rates include food and medical services; Kositzky said food and major building maintenance are contracted separately and behavioral health services are funded through DDPHE/Colorado Coalition for the Homeless contracts, while on‑site case management and social services are included in the HOST contract values.

Data quality and verification drew sustained scrutiny. Several council members asked how HOST will prevent corrupted or inconsistent HMIS/MDHI inputs from driving performance payments. Kositzky said HOST has simplified HMIS service menus, created a new data team, will provide one‑on‑one HMIS training for providers, will use an automated dashboard as the source of truth for invoices and has a disputes process for providers to submit corrected counts.

Members also pressed on small‑site economics and whether providers’ extra work (for example, donor‑sourced pantries or additional food) will be recognized. HOST said the 2026 proposal does not create separate bonuses for activity outside the four metrics, though providers may offset weaker performance on one metric by overperforming on another within the contract maximum; quarterly narrative reports will capture additional services.

No formal action was taken in the committee. Kositzky reiterated that HOST plans to bring draft contract language to council and to share templates with council attorneys in advance of any vote. The committee requested further data before contract approval, including more recent exit figures for 2025, itemized cost components, and the final contract templates.