Home, Not Shelter
“… and after more than a decade spent living on the street, he didn’t want to move into a shelter and adhere to someone else’s rules.”
“…and she’d refused to consider living in a shelter in part because she couldn’t take her dogs, but also because it felt like an admission.”
— — a story from the Washington Post
After reading this story published by the Washington Post, we understood why people like Jeremy or Shannon refuse to live in a shelter, primarily because they do not want to adhere to someone else’s rule. However, shelters often enforce strict rules and do not include private spaces because it is more manageable for them to run and operate within a limited interior footprint.
What Are The Affordable Solutions For Homeless’ Affordable Dwellings?
Case 1. SquareOne Village: a real, successful story
A non-profit organization, SquareOne Village, began its tiny house developments in 2013. This series of tiny house movements was launched with initial funding of $98,000 through a private cash donation and another small grant, plus an estimated $114,000 of in-kind materials and labor. They started with city-owned land leased to the organization with a nominal fee of $1/year.
Here is the table of each development size and function breakdown.
Take Emerald Village for an example. This development consists of 22 micro-units ranging from 100 to 300 square feet. Each micro home includes sleeping and living areas, a kitchenette and bathroom, and standard amenities. Residents are part of a housing co-op, so they do not feel like they live under someone’s rule. The payment plan is between $200–300 per month, with an additional membership fee accumulating to an asset that can be cashed out at any time.
Case 2. Shannon’s home-hunting Journey
I studied this story further from the Washington Post and wondered if this alternative approach could help the living situation of people like Shannon.
Dream 1: Help Shannon stay in a typical apartment
First, let’s break down the details of spending on Shannon’s daily life. She wants to save $5,000 for the first month’s rent, fees, and security deposits on a new apartment. And she is currently making $700 each week.
She could save up to $266 per week in her living scenario. With this optimal saving plan, she still needs 19 weeks to save up to $5,000. Assuming someone could provide a particular type of transitional housing without asking the tenant to pay this deposit and other upfront costs. Instead, ask the renter to pay a portion of their income for the “ownership” of the housing. What kind of house will that be?
As of November 2023, the average rent in the Washington, DC metropolitan area was about $2200/month with an expectation to get a 700 sq feet one-bedroom apartment. That translates to about $3.14 to $3.17 minimum per square foot for Shannon. A one-bedroom of 670 square feet would cost about $2100 a month. It equals a gross annual revenue of $38 per square foot for the management association.
Although the national average cost of operating apartments varies by location, Shannon could still expect a typical $2.5 per square foot if she chose an apartment with regular maintenance. That leaves $0.64 per square foot for the management company. Moreover, if an onsite professional takes care of the apartment complex daily, the building complex must be at least 80,000 square feet (about 80 units).
Dream 2: Help Shannon build her own house
In the case of the City of Eugene, they decided to take a hands-on approach to work with the homeless community. The tiny house village was permitted and built in the light industrial zone. The city interpreted the tiny house to be a “temporary structure.” Plus, instead of regulating these tiny houses as “dwelling units,” the city categorized them as “sleeping units.” Therefore, these houses meet code requirements for structure strength, fire safety, and interior environment (such as ventilation, lighting, sound transmission, or temperature controls).
Moreover, with a looser building code requirement, it is possible that Shannon and her daughter could both have their independent space, live closer together, and enjoy their first “joint-home” ownership.
See the image below; here is another possibility. The material could cost from $7,000 to $8,000 in this type of unit. This ratio could be lower if Shannon also joins the construction process to make this sleeping unit be built within $20,000 to $25,000 of budget. By applying historical average national home price-to-income ratios (3: 1), Shannon could “purchase” these units and make her own two to three-bedroom house with some outdoor landscapes.
What’s The Takeaway?
Statistically speaking, national apartment construction costs about $350 per square foot, leading to $70,000 to $200,000 per unit. The average cost to build a stand-alone habitable structure of 800–1500 square feet is about $122,000 per unit.
Compared those options to Shannon’s “dream home,” her $50,000 home unit seems a feasible solution: if she is offered a stable job with a $36,4000 annual salary within 20–30 minutes of travel distance from her home, she could save about $5,000-$7,000 a year to pay back the construction cost (without interests) of her unit in as quickly as 6–8 years. The bottom line of this “ownership” equation is that Shannon’s 30K full-time job has to align with where she lives and vice versa. In many cases, the reason why there is a constant homeless population is because they are forced to move before landing a feasible full-time position or there is no affordable unit within the proximity of their jobs.
Those are just some creative ideas and possible housing solutions for our vulnerable population, who often need a stable home the most. While trying to squeeze out more creative juices, we hope an inclusive and balanced future is foreseeable.
