Housing made of a shipping container.

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Let’s Look At How Complicated Funding Homeless Housing Really Is

A prominent developer thinks he can add units for homeless people at a fraction of what the city estimates. But longtime advocates say it's not so simple.

A couple of weeks ago when I wrote about one particularly pricey city proposal to house the homeless, I stirred up a well-known Dallas developer. I was soon eating lunch with Sam Ware inside one of the largest buildings in Dallas-Fort Worth: the 1 million-square-foot Campus at Legacy West, which he is redeveloping. In his spare time, he now says he wants to partner with the city of Dallas to build permanent transitional housing for the homeless. You may remember Ware as the developer who won the blessing of the Dallas County Commissioners to redevelop the old Parkland campus, but couldn’t find the financing to finish the deal. (He has said that he still plans to move forward on the Parkland deal.)

Now, why would a developer who specializes in projects of massive, hundreds-of-millions-of-dollars scale be interested in digging into a topic like homeless housing? Ware says he would be doing it philanthropically, and expresses frustration over a recent city proposal that estimated costs for one possible complex at $200,000 a unit. Using shipping containers, he says he can provide housing for far less money—$25,000 per unit.

But experts around Dallas, the people who’ve long been engaged in local housing efforts for the homeless, say that number is either exceedingly lofty or downright impossible. They speak to the challenge facing the city as it prepares a request for proposals, tentatively set to go out next week. They bring up the challenges in finding funding and paying for rent. And they warn against tossing around such low numbers, concerned that city officials could use them as fodder to deny projects that come in at higher per-unit costs.

The city has $20 million in bond funding to spend on permanent, supportive housing for the homeless, and a goal to add 1,000 such units in the next three-to-five years. One thing is for sure: to get anywhere near that mark, it will need to enter into public-private partnerships with outside developers.

There’s room for creativity, and, on its face, Ware’s idea is the sort of outside-the-box thinking that could stretch city dollars. He says he wants to build housing units of 9 feet by 20 to 30 feet, plus an extended roof and deck. He says they can be built off-site and moved. He’d eye a location just south of I-30, and, because of the rising value of land, believes he’d be able to convince a landowner to enter into a 10-year lease for a couple of acres. He says that would be enough to hold about 100 units. When the 10 years were up, he’d look to move the houses to a new location.

He says the facility would charge a monthly rent of about $150 to $200, utilities included. “The product diet needs to match the tenant,” says Ware. “It’s that simple.” He says candidates for residency could be funneled through the Austin Street Center, which he recently built a place to do laundry. He’d enroll a nonprofit to run the development.

Ware, who is yet to make contact with the city but says he’s reshuffling his time to work on a proposal, says his outside eye gives him a leg up in addressing the issue. But people like John Greenan, president of CitySquare Housing, and Dave Woodyard, CEO at Catholic Charities of Dallas, know from experience how difficult it can be to get these projects across the finish line.

“I don’t believe $25k per unit is remotely possible,” John Greenan, president of CitySquare Housing, told me via email one day. “Google the average costs per unit around the country and you will get a number higher than $200k not lower. We’ve been working for several years and might have a way to get the cost per unit down to $75k.” He adds to that the considerations of rent and monthly services, the latter of which Greenan estimates at about $1,000 per month per resident.

Greenan is concerned that a lowball development estimate could embolden opposition to kill housing for the homeless on financial grounds. Greenan and Woodyard have each already had to take on skeptical Dallasites looking to stop homeless developments in their neighborhoods.

Most recently it was Catholic Housing Initiative and Catholic Charities having to allay concerns. The organizations last year opened the St. Jude Center in northwest Dallas, which is owned by CHI through St. Jude Inc. The advantage for those involved with the planning, which included Woodyard’s team at Catholic Charities: the building on Forest Lane, previously a retirement home, didn’t require a zoning change for its new use as shelter for homeless individuals ages 55 and up.

But the organizations will need rezoning for their next project. They’re eyeing another renovation project (Woodyard declined to say where), and will submit a proposal once the city’s RFP officially goes out.

And then there are the financial issues of the Dallas Housing Authority, which reneged on its promise to provide St. Jude Housing Choice Vouchers. The facility found rent dollars elsewhere, but DHA’s money woes persist. Woodyard says he was updated about the situation a week ago, and was given no timeline on when vouchers would become available. That throws another, rather significant, wrench in Dallas’ efforts. “We have to plan our next project differently,” says Woodyard. “We most likely won’t be able to serve the most vulnerable need because they don’t have a source for vouchers.” He says the organizations are considering targeting a specific group that already possesses vouchers, such as homeless veterans.

Woodyard, too, thinks $25,000 is impossible, but says that even at twice that cost—which he calls reasonable for a shipping container project—you’re looking at a good number. He says housing for individuals should come in around the $50,000 to $60,000 per unit.

By renovating existing buildings, his team has found a formula that keeps cost per unit low. The St. Jude Center came in at $6 million for 104 units, south of $60,000 each. The city contributed $2 million of that and the county kicked in $1 million. CHI and Catholic Charities’ next project appears to be lining up at a similar cost per unit, Woodyard says. The city’s simple goal should be, Woodyard believes, to “affect the most lives as efficiently as they can.”

That’s key, because in Greenan’s eyes, the total amount of available city funding is a joke. Despite discussion around the horseshoe, he’s not hopeful Dallas will be able to do what he says no other city in the country has pulled off, which is to create true mixed-income housing that includes significant consideration for the homeless, a pie in the sky ideal that would ostensibly attract a for-profit developer. Which leads him to believe that only CitySquare and the people behind St. Jude have the capacity and experience to submit successful proposals, fight through the pushback, earn approval from City Council, and get something built.

Of course, don’t tell Sam Ware that.

“I’m just telling you, honestly,” he says as we finish up lunch. “I could solve it.”

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