How I got out of Homelessness

In 2004, I was struggling to make ends meet occasionally donating plasma to be able to afford Mcdonald’s. The opportunity for a young adult without a degree was extremely limiting. I had the ambition and was willing to put in the work to build a career but the opportunity wasn’t there. I decided at 20 to move to Las Vegas with a friend to try and get work in a casino or some other well-paying service industry.

Moving to a city where you don’t know anyone, don’t have any family or friends in the area is both exciting and terrifying. When I arrived, I quickly found out that you had to be 21 to land almost any job in foodservice and casinos. I was already quickly feeling the strain of money running out and took the first retail job I could find at $7.50 an hour. I was living paycheck to paycheck. I was enduring the grind with the hope that by the time I turned 21, I would be able to start building a life I had envisioned.

Then my car broke down. I quickly scrambled to get it repaired but the cost exceeded what I was able to afford. I lost the job I had and was now unable to get another. Bills were piling up. I started living on my credit card. I was able to get another used car but by this time I was drowning in debt. Being unable to pay rent, I had to make a drastic choice and I sold everything I could for food and gas and started living out of my car.

Unfortunately, this is an all too common experience for someone living paycheck to paycheck and doesn’t realize they are one incident from becoming homeless. The National Law Center on Homelessness and Poverty estimates that each year “at least 2.5 to 3.5 million Americans sleep in shelters, transitional housing, and public places not meant for human habitation.” In the 2012–2013 school year, over 1.2 million children were homeless. (using the DoE definition)

How do people get to the point where they resort to living in places not meant for human habitation in the wealthiest country on Earth? It usually starts with an unexpected event that follows a very predictable pattern.

1. Lack of affordable housing
2. Unexpected Bills
3. Lose Job
4. Medical emergency
5. Escaping Domestic Violence
6. Getting Tickets or Jailtime
7. Mental Health issues

Much like myself in 2005 people with little stability and living paycheck to paycheck is one incident from finding themselves homeless. It can be an unexpected trip to the ER, a sudden job loss, and then it becomes unattainable to secure affordable housing.

Unfortunately, it has gotten significantly worse.

The average 1 bedroom apartment in 2005 was $942 per month and when compared to 2018 it was $1,588 according to Statista. That’s an average 68% increase in rent prices. Then you look at the wage increases from the same time period. The national wage index (AWI) in 2005 was $35,488.93 and when compared to 2018 it was $50,000.44 according to the Social Security Administration. That’s an almost 41% increase in the AWI. While this doesn’t reflect low-wage earners like me in 2005, it sets a baseline to confidently say wage growth hasn’t kept up with the increasing cost of housing. People are worse off in 2018 than they were in 2005 and more vulnerable to becoming homeless.

I personally can’t imagine the increased strain from now having more pressure and fewer resources to be able to afford rent. Unfortunately, it gets worse from there. This data only reflects 2018. When taking Covid-19 into account and a steep increase in housing in 2020 we are reaching a crisis. A crisis I’ve seen with my own eyes on Skid Row in Los Angeles, Venice Beach, San Francisco, and even Kansas City.

So the question you might be asking yourself is, “What do you do when you’re homeless?”

It’s painful to recollect. It starts by using your credit cards more, selling things that suddenly become expendable, and then going to the pawnshop to get money for food. I vividly remember pawning my laptop with the optimism that I would be able to get a job and quickly get it back. As bills started piling up with no income, my bank account was soon negative and my credit card went to collections. I was living out of my car with no hope and constantly trying to find places to park and sleep. The physical toll of not being able to eat and the incredible amount of stress involved led me to develop ulcers, weight loss, and deteriorating mental health.

Once homeless it is almost impossible to escape without significant outside help. These are the most frequent hurdles people have to overcome when they find themselves homeless:

• Lack of affordable housing
• Eviction on record
• Poor credit score
• Criminal record
• No one to turn to
• No stability to get a job
• Unable to get a bank account or credit card

Now imagine having to swim upstream facing some or all of these challenges on top of going through one of the hardest events of your life. I’ve been there and it was ugly. At the beginning of 2007, I got a lifeline from my two younger brothers who were going to college, they offered me their couch. I moved halfway around the country with nothing to my name. What they offered me was a way to rebuild. The oldest brother was now being supported by the youngest and it gave me the opportunity to land a restaurant job. I was able to start saving money and by the time their lease was up, we then secured a cheap three-bedroom apartment. While this might sound like a simple story there is an equation to success.

On my own, I never would have been able to secure housing. My credit was bad, I had no recent references, no job, no bank account and there was nothing that I could afford. By sharing the expenses and the risk with the landlord I was quickly able to find stability in the path to rebuilding. Eventually saving enough money to put me through college and having the stability and focus to graduate at the top of my class as the President of my program’s honor society. I then started a business focused on solving many of the issues I saw in the restaurant industry after graduating. I over a period of 9 years I scaled this business to offer solutions in food service to over 22 states and that allowed me to accomplish many things I had only dreamed of such as, becoming a homeowner, having new cars that I wasn’t afraid of breaking down and having a healthy amount of savings for the next unexpected incident. (I will highlight this journey in other articles)

We can repeat this process over and over again, especially for people who don’t have a similar safety net. We can help the weakest of our society transform themselves into productive tax-paying members of society. I intend to leverage my experience in scaling a really difficult business with low margins and partner with other seasoned Entrepreneurs to solve one of the biggest problems in our society. In July of 2020 during the Pandemic, my cofounder Charmaine came to me with this amazing idea of starting a company called Essential to end homelessness. We can create a place for anyone regardless of their circumstances to rebuild their lives with dignity and hope.

It starts with rapid affordable housing. Without it, our houseless citizens can never have the opportunities I had and can never get ahead. The first thing we did was remove all the barriers to entry for renting. No more credit checks, eviction checks, references from jobs or previous landlords, and more leeway on background checks on a case by case basis. Then we reduce the amount of money someone has to come up with and change the rent to a weekly basis which further aligns with how our people are being paid.

It has to be affordable though, in fact, let’s start calling this achievable housing. It starts with looking at the minimum wage in the cities that are hardest hit by the surge in homelessness. A full-time worker making $15 per hour. Currently, in Los Angeles, the median income individual spends 47% of their income on rent. When rent starts to exceed 22% of take-home pay homelessness starts to rise drastically. Keeping to the 22% rule and with weekly payments, we arrive at $135 per week. We tested this theory with listings on craigslist for rooms for rent at this price around the LA metro and what we found was a deafening cry from hundreds of people ready to move in tomorrow. While the cost of real estate is sky-high, we have three ways to convert real estate into this model we will discuss in future articles.

Here are our key highlights into building stability:

• Weekly rent to ease the financial responsibility of our residents
• Affordable rent at $135 per week, 22% Rule
• Remove most barriers of entry into renting (credit, background, and evictions)
• Renting a single room with shared inclusive community amenities
• Achieving a permanent address
• Sustainable Transportation

Now we can start building stability with our most vulnerable citizens but the battle is far from over. With Maslow’s hierarchy of needs starting to be met, people have the opportunity to grow. Getting a job is step two and will bring further stability. Our residents are entering a period of desperation from many corporations struggling to find willing applicants for many open job positions. By providing achievable housing, we can also provide a large pool of new labor eager to take these jobs.

Essential can transform the landscape of America and be a pathway for our most vulnerable citizens. It can provide affordable housing aimed directly at people in transitional states. It just doesn’t have to be homeless. It can be for those who are one paycheck or hospital bills away from becoming homeless. We can preemptively stop the cycle of poverty before it begins. It can be for recent High School graduates unsure of their next move or Military Veterans dealing with untold trauma.

Essential can help transform a national crisis into more tax revenue, less crime, and less Government aid with the mission of helping get people back on their feet and start to save. Imagine the impact on society. Safer neighborhoods, no more tent cities, and happy, healthy residents are just a start. We can create equitable pathways to become middle class.

We are looking for more partners, employees, and residents to help accelerate the health and wellness of our communities. Please reach out to me @ (luke@essentialcity.org)