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The Oak Foundation, Sobrato Philanthropies, and the Dell Foundation all hope for big gains via small floorplans
By Stephanie Beasley JUNE 7, 2024 COURTESY OF DIGNITYMOVES Dignity Moves and the County of Santa Barbara partnered on this interim supportive housing community in downtown Santa Barbara, consisting of 34 private rooms with shared community spaces and access to county services.
America has an obsession with tiny homes. The country also is facing one of the worst housing crises in recent history. This odd combination of trends has led to a fast-growing movement: tiny home villages for the homeless. Public officials want to get people off the streets and into the miniature, bare-bones dwellings, and philanthropy is helping fund the effort.
Rates of homelessness have been going up for nearly a decade, exacerbated by rising housing costs. More than 650,000 people are without housing, the highest number recorded since the launch of a national “point-in-time” data collection in 2007. Over all, homelessness has increased 12 percent since 2022, according to the U.S. Department of Housing and Urban Development.
Poverty, the lack of affordable housing, inadequate social services, mental-health problems, and substance abuse are contributing factors. Public officials have developed a federal strategy to increase low-income housing and health care access for the chronically homeless. However, state and municipal governments are overwhelmed and unable to provide adequate shelter and social services. Many have started clearing encampments, a tactic that homelessness advocacy groups have criticized as inhumane and ineffective.
Leading foundations are stepping in to support another option: tiny homes that can shelter people until they get back on their feet. Communities of tiny homes that have been popping up across the country in recent years are being funded through financial gifts and, in some cases, built on land donated by nonprofits. These scaled-down homes are typically 100 to 400 square feet. Some offer the typical features of a regular house, such as indoor plumbing, a kitchen, and a bathroom. And some don’t. Yet they are an alternative, and often the only alternative available to people who would otherwise be sleeping on park benches or other public spaces, which could subject them to fines or jail time.
Nearly 100 tiny-home villages for the homeless have opened in the United States over the past five years. That growth, from just 34 in 2019 to 123 today, is practically a quadrupling, according to data collected by Yetimoni Kpeebi, a researcher at Missouri State University.
At least 43 percent of these villages are privately funded, meaning they receive donations from philanthropists, businesses, and corporations, Kpeebi said. Sobrato Philanthropies, run by billionaire Silicon Valley developer and philanthropist John Sobrato, and other groups such as the James M. Cox and Valhalla foundations have been helping to fund tiny-home villages throughout California — in San Francisco, San Jose, Oakland, and other cities surrounding tech’s wealthy Silicon Valley. The Michael and Susan Dell Foundation is a key donor behind a 51-acre tiny-home community in Austin, Tex. And in rural North Carolina, the Oak Foundation has supported the construction of a tiny-home village for the severely mentally ill and chronically homeless that it hopes might serve as a model for other philanthropically supported efforts.
As ambitious as these efforts may be, they currently serve only a tiny fraction of the estimated homeless population. And while tiny homes themselves can be built quickly and cheaply, the larger tasks of securing permits, financing, and local government approval can bring big added costs and delays. Skeptics worry that the construction of tiny homes doesn’t remedy the bigger issue, which is the widespread lack of affordable housing.
At best, tiny homes are a short-term solution to the country’s long-term issue of insufficient housing and social services for low-income Americans, said Margot Kushel, director of the Benioff Homelessness and Housing Initiative at the University of California San Francisco, a research program funded by a $30 million gift from Salesforce CEO Marc Benioff and his wife, Lynne Benioff.
“I would say that tiny homes are an absolutely important part of the ecosystem, but they are not housing,” Kushel said.
Tiny Homes and Tar Heels
In Chatham County, N.C. — where the median sale price for a home is around $690,000 — it has taken eight years to open a community of tiny homes. The Tiny Homes Village at the Farm at Penny Lane was the brainchild of local health and wellness nonprofit Cross Disability Services, or XDS, which is affiliated with the University of North Carolina and owns the 40-acre farm.
“We were really frustrated seeing several of our clients being homeless even though they got good clinical services,” said Thava Mahadevan, executive director of XDS.
Most of the people the nonprofit serves are on a small fixed income that, in some cases, isn’t enough to even rent a room, he explained.
“We were providing all these expensive, great services for people, but they don’t have a place to live. They don’t have anything permanent. And that’s a huge problem,” he said.
XDS wanted to create housing that would cost less than $400 in monthly rent and be located at the farm. The UNC School of Social Work came on as a partner in 2016 and has helped with fundraising. The Oak Foundation, a longtime UNC funder, became a major donor. Initially, the foundation provided a $50,000 grant that helped project leaders put together a business plan and start working with the county on a lengthy permitting and planning process for the farm, which had not previously been approved for multi-unit housing. Later, the Oak Foundation provided an additional $1 million operational grant to UNC. All of that funding went directly to the tiny-homes project. Both grants were unrestricted.
The initial grant came from a pot of discretionary funds that allow the foundation to give grants of less than $100,000 with very little due diligence and no reporting requirements, said Oak Foundation President Douglas Griffiths. Generally, the foundation wants to provide unrestricted funds as much as possible, he said.
“We are a very light-touch impact foundation,” he said. “We rely on our partners to determine how they would want to measure success, and we might have a conversation about that.”
In this case, Griffiths said, the foundation knows that the homes have been built and feels satisfied, after talking with team at the Farm at Penny Lane, that its funding has had the intended impact. Moving forward, the Oak Foundation will be interested to know how many residents are still at the Tiny Homes Village after the first year, but it isn’t prescribing that as a measure of impact.
The first $50,000 grant from the Oak Foundation was critical to establishing the feasibility of the project, Mahadevan said. XDS had to ensure it could win county approval of the zoning for the village and that there was adequate underlying infrastructure, such as county water pipelines connected to the farm’s well, before it could begin in earnest and solicit further donations.
“The actual build was the easy part,” he said.
Construction workers broke ground for the village in March 2020, but work was delayed by the pandemic. The tiny homes were finally completed last year and will be open to residents in the fall.
The village will provide affordable housing to people with serious mental illness. It includes 15 units, of which five are for veterans with chronic health conditions. Each home will be about 400 square feet with a bathroom, kitchen, living area, and front porch. Medical and mental-health services will be provided. Already, the farm offers programs such as horticultural therapy and “farm-to-clinic harvest” for people receiving assistance at UNC’s mental-health center. There is no requirement for residents to move out within a certain time frame. They can live in the homes indefinitely.
The county is now looking into how it might encourage developers to build additional low-cost housing options for its population of roughly 79,000 as housing prices continue to climb, said Karen Howard, vice chair of the Chatham County board of commissioners.
Skyrocketing living costs have been especially tough for minimum-wage workers in rural areas like Chatham County. North Carolina has one of the highest eviction rates in the country, and more than 1 million of its households pay over 30 percent of their income on housing. Georgia, Mississippi, and South Carolina have higher eviction rates than large cities such as Chicago, Los Angeles, and New York, according to research from Princeton University’s Eviction Lab.
“Rural evictions are a hidden feature of our national housing crisis,” Eviction Lab has said.
Chatham County doesn’t require developers to build affordable housing but recognizes more housing options are needed and is working with some local developers that have committed to building clusters of tiny homes, Howard said.
“No one was having these conversations. No one was looking at these opportunities until the Farm at Penny Lane happened,” she said.
There used to be a fear among county residents that tiny homes would be difficult to manage, cause traffic congestion, and be inhabited by a lot of transient people, she said. However, the team at the farm has shown how it can really become a community, she said.
Reality vs. Reality TV
Television shows such as Tiny House Nation have documented the country’s growing fascination with miniature homes that many see as offering a simpler, more environmentally friendly life. But it’s more than a fun trend for state and municipal governments that view tiny homes as a way to reduce homelessness rates that outpace the construction of affordable housing.
California has one of the highest homelessness rates in the country: More than 181,000 people are without permanent housing. At least 68 percent of homeless Californians are unsheltered, meaning they sleep on the streets, in cars, in abandoned buildings, or other places that were never intended to serve as housing. Last year, Gov. Gavin Newsom vowed to provide 1,200 tiny homes for this population. So far, only about 150 have been purchased and none have opened, CalMatters, a California-focused news organization, recently reported.
Philanthropy has backed efforts to construct the homes more quickly, typically in partnership with local governments. Last year, the Sobrato Family Foundation said it would lease a two-acre lot of private land to San Jose for the construction of 75 tiny homes for $1 a year over the next decade. San Francisco-based nonprofit Dignity Moves is managing the development of the community and providing social services. Dignity Moves is funded by foundations such as James M. Cox Foundation and Valhalla Foundation. The group was also part of the team that developed San Francisco’s 70-unit tiny-home village and similar communities throughout the state. San Francisco continues to wrestle with persistent homelessness despite a $100 million infusion of philanthropic money.
“In our model, philanthropy pays for the construction, and then the expectation is that the city will pay for the ongoing supportive services,” said Dignity Moves CEO Elizabeth Funk.
This kind of interim housing is fairly new and is different from the kinds of congregate homeless shelters that cities have typically funded, she said. With interim housing, each person has their own room and can stay for at least six months to two years rather than for a night or two, Funk added.
Tiny-home communities offer more stability and can be places where social services can be effectively administered “because people aren’t in crisis mode,” she said.
California, Oregon, and Washington are the states with the greatest concentration of tiny-home villages, according to data compiled by Missouri State University. Some communities have also tried to deal with unsheltered homelessness in more punitive ways. The town of Grants Pass, Ore., wants to fine and jail people found sleeping in public spaces and mounted a legal challenge to a court ruling blocking the policy. The Supreme Court heard arguments for the case in April and could issue a decision as soon as this month.
Building tiny homes is better than penalizing people for living on the streets, but that isn’t enough, said Jesse Rabinowitz, campaigns and communications director at the National Homelessness Law Center.
“It’s good that cities and states are doing things to address the fact that people are living outside. Nobody should live outside, especially in the richest country in the world,” he said. Research has shown that more than half of Americans are rent burdened, he noted.
However, he said, “I am personally conflicted around tiny homes.” It seems to be a way of ushering people into interim housing rather than providing the more permanent affordable-housing options that many homeless people want, Rabinowitz said. And often the villages are located far from central areas and beyond the reach of public transit to avoid backlash from those opposed to the idea of tiny homes for the homeless in their communities, he said.
Funk bristles at the criticism that tiny homes aren’t part of the housing-first approach that prioritizes the provision of permanent housing for people experiencing homelessness. Interim housing is a stage in that process, which is fundamentally about getting people off the streets and sheltered, she said.
“It is true that this is not a long-term solution. It’s a waiting room,” Funk said. “It is a dignified waiting room.”
What’s at Stake
The tiny-home villages for the homeless movement has evolved over the past five years. Back around 2016 and 2017, many of the homes were built in areas not intended for housing, such as church parking lots, said Krista Evans, a planning and geography professor at Missouri State University. Because they were built illegally, many of those villages had to close, said Evans, whose 2019 data on tiny homes provided the basis for Yetimoni Kpeebi’s more recent census.
Tiny-home developers are now more aware of zoning requirements and less likely to have those issues, she said. And they are more likely to ensure tiny homes have standard amenities, such as indoor plumbing, heating, and air conditioning, she said. Since 2019, the percentage of tiny homes without plumbing has dropped from 59 percent to 48 percent, Evans said.
“There’s growing recognition that just a roof isn’t going to solve the problem,” she said.
The geographic location of all the tiny house villages for the homeless in the United States
Note: Tiny house villages whose addresses could not be found or only had postal addresses, are not included
Still, some remain skeptical of funders and municipal governments supporting tiny homes if they aren’t also exploring more permanent options.
“Our position, overall, on tiny homes has been mixed,” said Amanda Andere, CEO of Funders Together to End Homelessness.
Tiny-home projects aren’t highly recommended by the coalition of grantmakers, which includes several organizations that have backed tiny-home projects, such as the Oak Foundation and Sobrato Family Foundation, she said. The California Endowment, Chan Zuckerberg Initiative, Home Depot Foundation, and Silicon Valley Community Foundation are also members.
There is value in having tiny homes as an alternative to congregate shelters where people are crowded together, Andere said. The pandemic showed how quickly viral illnesses can spread in that kind of environment, and it also isn’t a great environment for people with serious mental-health issues, she added. However, said Andere, who advocates for greater equity in housing policies, especially for Black and Indigenous communities, tiny homes should be seen as a bridge between the shelter environment and permanent housing rather than the ultimate solution.