Homelessness and Housing Affordability
Why is it important to talk about homelessness and housing affordability?
Before starting to discuss housing affordability, it is also essential to mention homelessness. Homelessness is not news. It is a social phenomenon that almost every city experiences. Though many reasons contribute to homeless populations, the lack of a variety of affordable housing types in the market is the most significant.
What is Homelessness?
According to “Homeless Definition” at HUD, the homeless population can be grouped into four categories:
- Someone who lacks a fixed, adequate nighttime residence.
- Someone who is at imminent risk of homelessness.
- Someone has not had permanent housing over the past 60 days or has moved at least twice during that period and is expected to continue this pattern for an extended period.
- Someone who is fleeing domestic violence and has no other residence.
What do we know about homelessness from statistics?
1. On a single night in January 2020: 580,466 people experienced a homeless condition. That is about 18 of every 10,000 people in the United States.
2. Homelessness is in decline: if we only look at the past 4–5 years, we might be worried that the homeless population is growing. (Homeless communities increased 30,538 people. From 549,928 individuals in 2016 to 580,466 individuals in 2020, about 5% of the increase.) However, if we take a step back and look at homelessness with a broader lens, we will see the homelessness trend goes downwards. Moreover, as the national population increases each year, the percentage of homeless people is decreasing: from 0.21% in 2009 to 0.18% in 2020. Thus, there is a hope of ending homelessness.
3. Permanent supportive housing can effectively prevent homelessness from rising: From 2012, the number of homeless people dropped drastically. And the number of homeless people seemed to stabilize from the year 2014 to 2018. Why? I strongly suspect that providing consistent homes for the homeless community is the key. See the chart below. In 2014, the sheltered ratio reached a historical high (almost 70% of the homeless population have a place to stay and gain their interim stability.) After the peak of sheltered coverage, you can tell the homeless population calmed over 2014–2018.
Ending Homelessness vs. Increase in public benefit
You might wonder why we even bother to discuss in this [place]making series. After all, many vulnerable groups need our attention: from disabled individuals, asylum-seeking refugees to border-wandering immigrants. Why does this to do with our public benefit? Isn’t it just another cost out of the taxpayer’s pocket?
It might be too wild to imagine a city with Singapore’s social housing, Cambridge’s higher education, Copenhagen’s biking culture, Hanoi’s urban food production, New York’s art and fashion, San Francisco’s recycling system, Seattle’s natural recreation, Philadelphia’s storm-water management, Helsinki’s happiness, and Vancouver’s livability. The list can go on and on.
But, homelessness has an impact on public expenditure. The cost of preventing homelessness or supporting the homeless community may be much less than the eventual cost for health care systems: including mental health services, emergency services, and criminal justice services. The productivity generated by recovered homeless individuals will also benefit our overall society rather than ignore this potential workforce.
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.”
If you read this story published by the Washington Post, you would understand why people like Jeremy or Shannon refuse to live in a shelter. Mainly because they do not want to adhere to someone else’s rule. However, oftentimes shelters enforce strict rules and do not include private spaces.
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 were 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 that is 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 that are ranging from 100 to 300 square feet. Each micro home includes sleeping and living areas and a kitchenette and bathroom accompanied by 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 that accumulates to an asset that can be cashed out at any time.
Case 2. Shannon’s dream house: a hypothetical, imaginary story:
I studied this story further from the Washington Post and wondered if this alternative approach could help the living situation for people like Shannon.
First, let’s break down the detail of spending on Shannon’s daily life. She wants to save a total of $5,000 to pay for a first month’s rent, fees, and security deposits on a new apartment. And she is currently making $700 each week.
In her living scenario, she could save up to $266 per week. With this optimal saving plan, she still needs 19 weeks to reach her goal of saving 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 to have the “ownership” of the housing. What kind of house will that be?
Typically, the national average for a new construction rental is about $3.5 per square foot. A one-bedroom of 600 square feet would cost about $2100 a month. It is equivalent to annual revenue of $42 per square foot. And it will allow the construction cost to be paid back in 4–5 years.
If we use similar formula (paying back the construction costs in 5 years), what is the proper type of construction and sustainable cost that will allow the low-income population to have a “home,” not a “shelter”?
Using the same development formula and affordable rent-to-income ratios (1:4 to 1:3 ), Shannon could afford up to $900 for her new-constructed apartment. (If she wants to fit her and her daughter’s living conditions in the same as 600 square feet). That is equivalent to $18 per square feet of annual revenue for the development, and its construction cost cannot be more than $90 per square foot. Generally speaking, “six-packs” or “walk-up” apartments could meet her needs. These apartment buildings are typically timber-built. They have construction costs of $85 to $175 per square foot, depending on the size and type.
What if Shannon and her daughter both want independent space, live close together, and enjoy the “homeownership”?
See the image below; here is another possibility. In this type of dwelling, the material cost is from $7000 to $8000. With a roughly low labor-to-material ratio (1:2), this dwelling unit can be built within $15,000 to $25,000 of budget. By applying historical average national home price-to-income ratios (3: 1), Shannon could purchase three of these units and make her own three-bedroom house with some outdoor landscapes.
What’s the takeaway?
These are just some creative ideas and possible housing solutions for one of vulnerable population who often need their stable home the most. I believe as we squeeze more of our creative juices, the more possibility for our future as a whole.
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