What Could go Wrong in Building Tiny Houses for Homeless?

Susan Shelley
Columnist and member of the editorial board of the Southern California News Group, and the author of the book, "How Trump Won."

The Los Angeles County Board of Supervisors just voted to go forward with a pilot program to house homeless people in tiny houses in the backyards of single-family homes. And if you pay taxes in L.A. County, you’re going to pay for it.

The program will pay $75,000 to homeowners who agree to have a tiny house constructed on their property, or $50,000 to upgrade an illegal dwelling unit, like a converted garage. The selected homeless person or family will pay rent, covered by low-income vouchers. Tenants would contribute 30 percent of their incomes. Taxpayers, presumably, would make up the difference.

If you ever drove by a homeless encampment and said to yourself, “The government ought to do something,” you probably never thought that what it would do is move the residents of the encampment into a backyard next door to your own house, at your expense.

But that might very well happen.

L.A. County is testing this concept in a pilot program that will cost $550,000.

Here’s how it will work for homeowners: The county will provide a maximum subsidy of $75,000 to build two or three new “accessory dwelling units” or ADUs, sometimes called granny flats. The subsidy will be provided in the form of a loan that will be gradually forgiven, with the principal reduced for every year that the unit is used as homeless housing. After 10 years, the loan will be completely forgiven and the homeowners can evict the homeless tenants and do whatever they wish with the units.

What could possibly go wrong?

Well, for starters, the many families currently living in bootleg housing could find themselves evicted so the owners can take advantage of $50,000 in government loans to legalize the units so they can house somebody else.

That means that this program, if it’s ever scaled up, could vastly increase the homeless population almost overnight.

Something else that could go terribly wrong is the “magnet effect.” That’s when people in other counties and states see the backyard tiny-house option as a great opportunity and move to L.A. County to take advantage of it. That could increase the homeless population even more. Then there’s the obvious problem.

Here’s how Supervisor Sheila Kuehl described the homeless population: “Many, many of them are just regular people like you and me who just lost their job or lost their house and really don’t have other choices.”

That may be, but many, many of them are not regular people. Many, many of them are people with issues that will make them terrible tenants and horrible neighbors.

Suppose the people who are chosen by the county to live in the homeless housing choose to abuse drugs, damage property or become a nuisance to the neighbors or the neighborhood. What’s the plan?

That was probably one of the questions that stalled a plan for backyard homeless housing in Multnomah County, Oregon, where Portland is located. The pilot project was set to build four tiny homes last year, but was delayed by a cluster of concerns over locations, legalities and tax consequences.

It turned out that Portland’s strict rules about how close a house can be to a tree meant that there were fewer available locations than expected.

Then there was difficulty working out legal agreements between the homeowner and the homeless tenants, between the tenants and the property manager and between the property manager and the county.

There was also the question of how to compensate homeowners for the trouble. The county initially planned to make pre-fab tiny houses available for free, but that would have triggered unpleasant tax consequences. So they worked out a plan to sell the houses to the homeowners and offer financing similar to what’s being proposed here. And Oregon property owners can have their $75,000 loan forgiven in just five years, not 10.

The city of Los Angeles is spending a $100,000 grant from Bloomberg Philanthropies to study the feasibility of backyard homeless housing within the city’s boundaries. Maybe this will solve the problem of homelessness in a way that will inspire the world. Or maybe it will be the start of a wave of gated communities with HOA agreements that don’t even allow adding a birdhouse without a two-thirds vote of the board.

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