Pitchfest ESG Winner: FWD Slash, Pitch by Sameer Sood

This series highlights our Pitchfest finalists. At the 2023 Housing Innovation Summit, we introduced a new program, coined: Pitchfest in order to bring new ideas to light, offer feedback that startups can use to advance their solutions, and introduce these innovators to potential advisors, partners, investors, and clients. A dozen companies made it to the final round, and four came out on top.

In this episode, you'll hear Sameer Sood from FWDSlash give his pitch.

Visit the Summit website.

Transcript

Haley Baumeister (00:00):

Hello and welcome to the Housing Innovation Alliance podcast. This series highlights our pitchfest finalists at the 2023 Housing Innovation Summit. We introduced a new program coined Pitchfest in order to bring new ideas to light, offer feedback that startups can use to enhance their solutions and introduce these innovators to potential advisors, partners, investors, and clients. A dozen companies made it to the final round and four came out on top. In this episode you'll hear Samir sued from forward slash give their pitch. They were the winners in the ESG category to get in touch with them, visit their website and find ways to connect in the description.

Sameer Sood (00:38):

Good morning. We are forward slash we are increasing the affordable housing supply through health. Here's our team. So we have Josh, he's a public health expert, been one for the last 15 years or so, Jeremy, he's been in affordable housing for 20 years and myself, I'm a physician in primary care and family medicine and health innovation for the last 10. So in our 45 years of working on problems like this, things have actually just gotten worse. So you might be wondering why a doctor was at a housing innovation conference. So I'll start with a story. Back when I was in residency, I'd work in the ER a lot of nights and a patient of mine, let's call him Steve, would come in quite often. He would cite something like chest pain. He'd get admitted to the ER at a cost of $500 to his Medicaid insurance company.

Sameer Sood (01:18):

And as he gets brought back, as he get brought back, he waves high to the nurses that he knows my first name and I get to see him. I run the test chest x-ray, ekg, blood work, all negative thankfully, but another $2,500 charge to his health insurance company. And then when I go back to tell him the results and ask him if there's anything else he needs, he requests a sandwich and I'm gonna close the lights on the way out because he just needs a place to stay. He's unhoused and he wants tons of community. Steve getting charged with a thousand dollars to stay in the most expensive hotel room we have in America, our hospital bed. The next morning when I'm discharging my patients and going through the charts, I hit the only button I can as a physician for someone like Steve and that's to discharge him to street an actual button in the the health record there.

Sameer Sood (01:59):

And this happens over and over again to uh, tune up $20,000 per patient per year who experiences housing and security and homelessness to a total cost to our healthcare system of $74 billion annually across 3.7 million experiencing housing insecurity in America. So in my exploration of what to do about this since I felt pre useless as a doctor, came across housing first. And this is a methodology where someone gets access to a housing unit but not just that supportive services to help them get stabilized. Things like behavioral health access, food support, transportation, substance use disorder treatment and more. This has been shown to lead to 40% cost savings or 30 billion in annual cost savings from productions in hospital use. In patients age, jail time, police encounters, overdoses and more. So if this is the secret, why isn't it everywhere? Well, there's not enough housing units to start with.

Sameer Sood (02:43):

There's a shortage of 7.3 million affordable housing units in this country. Landlords don't really trust this population. Up to 91% in some communities reject housing vouchers and homelessness. Organizations that run supportive service programming are underfunded. Looking at our friends here in West Virginia, the West Virginia Coalition to End homelessness, this is Zach. He's been running this organization for the last 15 years or so, running HUD programs for 44 55 counties in West Virginia, serving up to 600 people in 2022. However, he's limited with what he can do because there are few landlords willing to give up their housing units for this population. He also struggles to run programs and hire enough staff and retain talent by technology because there's no sources of revenue for him. He's reliant on grants and foundations and donations. This is where we come in. We enable organizations like Zacks. We handle the housing piece by acquiring, developing or master leasing housing units from local landlords and paying for rent using their HUD vouchers.

Sameer Sood (03:35):

We also work with the Medicaid organizations that cover the high costs from Steve, our patient, and subcontract those dollars out to these local organizations for their supportive services. In West Virginia where we're starting out, this is our first contract here. We are attempting to house 140 members over the next five years in contract with the healthcare plan called UniCare. They are identifying members who have high hospital visits and are housing insecure, homeless and referring them to us. When they get referred to us, we immediately place them in one of our housing units on a master lease negotiated from local landlords backed by HUD vouchers. We then refer them to our community partners who runs the supportive services. We help with evaluation and after about six to 18 months these individuals graduate this program with stability, dignity in over five years in all 140 members, 2.2 million of healthcare cost savings.

Sameer Sood (04:19):

We're scaling us across the country in many communities. We have a robust network of community organizations, landlords and Medicaid organizations who cover these patients. And we're building a platform that helps landlords and community organizations contract into the healthcare value chain. Here's our opportunity. So we're starting in West Virginia. There's 2.2 million of cost savings on the table, 140 members. We're renting master leasing, we're acquiring up to 125 units. We're scaling through L a's health. Our health insurance partner here, they're a strategic investor of ours. They have 25 managed Medicaid markets, 60,000 individuals with housing insecurity across all of their 47 million members. And we are then scaling further with all the other insurance companies to cover the 3.7 million housing insecure folks in this country for a total cost of care savings of 30 billion in healthcare. We're also combining this to increase the housing supply along with the 33 billion HUD budget to iterate here.

Sameer Sood (05:10):

We're taking and creating a new source of capital for affordable housing from health insurance cost savings dollars 30 billion there 33 billion from the HUD subsidies for a total of 60 billion of braided housing and health dollars to take these tent communities we see in all of our major cities, turning them into dignified housing. So this is our pitch. We're just one company but all of us here are in the housing space of senior presentations. We're builders, we're developers, we're investors. So this is a call to action for all of us, not only save the system billions, but increase community capacity, create stable housing, access and discharge folks like Steve to health instead of the street. Thank you.

Betsy Scott (05:48):

Nice. Again, 30 seconds of time remaining. Impressive. Great

Sameer Sood (05:52):

Presentation. How do you guys generate revenue? Yeah, great question. So that cost of care savings that health insurance companies receive. So they receive 40% cost of care savings. We're taking a cut of that sort of a pay for success model in healthcare if you're familiar. It's sort of value-based care and and shared savings model. So that's our core way of making money. Some of the other things we're experimenting with is building the fund, the tech stack to help build and develop some of these housing developments. So that's another method as well. Along

Speaker 4 (06:16):

Those lines, we be operating as a for-profit or a

Sameer Sood (06:18):

Non-profit. We are a public benefit corporation for-profit.

Speaker 5 (06:21):

On that same note, could you talk a little bit more about the unit economics of what you're doing? So for example, I come from California and the Bay area can cost up to a million dollars to build a unit of supportive housing. There. Probably it's more than $20,000 if I had to guess per person in that cycle, right? Just because it's a high cost market. What are the unit economics in West Virginia where you're starting? Is it 20? Is that where the $20,000 number comes from and what does it cost to build a unit of supportive housing in your model in West Virginia?

Sameer Sood (06:44):

Yeah, so the 20,000 is just an average. You're absolutely right. This range is from zero for someone who doesn't actually receive healthcare cuz they're on the street and and don't actually access hospitals to 50,000 to a hundred thousand. So we analyze data from L Ance Health, the local insurance company kind of landed on that $20,000 mark. West Virginia is more of a rural environment. California is much better program, but much more high costs there. We're actually working also in Sacramento on a development project there, but if you think about the unit economics here, it depends on housing costs, which are backed by housing vouchers. So housing vouchers adjust per fair market rent in a, so California, it's much higher for a single bedroom voucher than West Virginia. So we're leveraging that to kind of cancel out the high cost there. And then the supportive services component range as well.

Sameer Sood (07:23):

So it's on a per member per month basis in West Virginia, about $500 per member per month for that local organization who we're empowering to run those services in California, maybe seven to 800 per member per month. It scales per state from a, from the housing cost piece. From Metropolitan area? Yeah, per metropolitan area. Yeah, so it's very, it's it's city specific. It's zip code specific Hut is very housing, urban development is very specific with their housing voucher numbers. We got paid up front for the West Virginia model, $300,000 for us and the local organization to run housing services for in the first year, 25 individuals. But then over five years we're proposing a for 140 members, a 1.6 million model to save the health insurance company 2.2 million. We take 1.6 and we pass through about 800 K of that to the local organization and the rest is what we take.

Betsy Scott (08:06):

How do you look at going into new markets? What's your approach to get into different areas? How do you prioritize them and how do you connect with people to start making things happen? Yeah,

Sameer Sood (08:16):

So like I mentioned, L a's health has 25 Medicaid organizations across the country. That's 25 different states. Those states have different priorities, different numbers of housing, insecure members. Every health insurance company feels this pain point they're all investing in in housing at this point, United Health Group, 800 million Kaiser, 400 million, et cetera. And so we're scaling through our health insurance companies. They're kind of telling us where they need housing programs. More states really interestingly are asking for health insurance companies to be doing something about this because they're also realizing housing is health and there's these costs are getting astronomical places like California. So we have a couple partners there and we're building in Sacramento, California intimately recognizes this and in fact created a separate fund of Medicaid dollars specifically for non-clinical supports called Cal aim. So that's less barriers to get into that market.

Betsy Scott (09:01):

Do you have any involvement from municipalities like San Francisco as a huge homeless problem?

Sameer Sood (09:06):

Yeah, yeah. So we've been talking to mayor offices in Berkeley, Indianapolis supposed to in LA potentially we'll be in Sacramento. Mayor's offices are also very interested of course. And local municipalities in solving this problem. The mayor's office of Indianapolis literally wanted to contract us with us to solve homelessness in Indianapolis with 150 housing units. Really making it a tangible feasible goal, which is a super exciting for us.

Speaker 5 (09:28):

I'm curious about landlord reception and because one of the things we think about right, is you can get people into existing units, but there are definitely not enough units that exist across the country. And so how have those conversations been? What has the pushback, you know, master leases are great, obviously a very stable source of revenue, but how scalable, how feasible is that as you expand, to

Speaker 6 (09:45):

Give you a sense of how interested landlords have been, we actually have landlords in West Virginia giving us direct access to their property management software. They're that interesting. They want to like literally work with us to even shortcut their own processes to say we want you to look directly at our portfolio and actually figure out which units make sense for the population. So

Sameer Sood (10:03):

We're just de-risking the process for them for to house people to acquire, to develop even some of them. I'll

Speaker 6 (10:07):

Just say that, and I think this is particularly relevant to this audience. We've found that the landlords slash owner investors actually are interested because it de-risks the population accepting the tenants. To the extent that even again in West Virginia they're starting to work with us to try to collaborate on expanding their pipeline of acquisitions and development alongside us. Right? So really for this audience, if you're at all interested in like the s single family home to rent market or you've got a large portfolio, we absolutely think this is a new source of capital to start to like address this sustainability question with a direct approach to finding capital that's gonna sort of not involve tax credits, which are, you know, low income housing tax credits or the other federal programs or subsidies which are complicated and confusing as, and quite frankly scary to folks. This is a way of actually uh, tapping into a new source of resource that's not dependent on those but actually does directly achieve sort of the at obtainability goals.

Betsy Scott (10:57):

Any other questions? I'm sure Joshua would be happy to talk to you offline if you would like. I don't have any other questions. You guys did such a good job that you

Sameer Sood (11:06):

Have. I can tell more stories too.

Speaker 6 (11:08):

<laugh> so much.

Sameer Sood (11:09):

Thank you guys very much. Thank you all. Appreciate it.

Haley Baumeister (11:13):

Thank you for listening to the Housing Innovation Alliance podcast. We invite you to learn more about Pitch Fest and let us know if you are interested in participating in the next cohort at Housing Innovation Summit dot.