1,200 Tiny Homes Are Missing For Homeless

Adapted From CALMATTERS | CALmatters.org

Additions and notes by Jim Forde, Founder and Director of Cargo2Casa.org

Every day, Jim Forde, The Director and Founder of Cargo2Casa reads articles about the Government trying to fix the homeless program. However, despite everything that is done, the program does not get off the ground, and we still have the homeless problem.

On May 23, 2024, Gov. Gavin Newsom said he’d send tiny homes to San Jose, Los Angeles, Sacramento, and San Diego County. Why hasn’t any materialized yet?

In March 2023, Gov. Gavin Newsom stood before a crowd in Sacramento’s Cal Expo event center and promised He’d send 1,200 tiny homes to shelter homeless residents in the capital city and three other places throughout the state.

The move was part of Newsom’s push to improve homelessness by quickly moving people out of encampments and into more stable environments. But more than a year later, none of those tiny homes have welcomed a single resident, and only about 150 have been purchased.

Irontown Modular, one of six vendors the state chose to supply the tiny homes in Sacramento, San Jose, Los Angeles, and San Diego County, is “absolutely shocked” that it hasn’t received any orders, said Kam Valgardson, the company’s general manager.

“The big problem is that the homeless people aren’t getting served,” Valgardson said. “I can complain as a business, but these homeless people are getting no support, no relief. The money’s been promised, but something’s broken in the process and nobody’s placing orders.”

Multiple delays and about-faces have occurred over everything from the state’s funding of the units to the ability of local cities and counties to find places to put them. The state has suggested that the delays are the fault of local governments. However, tiny homes have failed to materialize even when local leaders moved quickly to approve a project site.

Sometimes, knowing exactly what’s holding up these projects is difficult. Communications involving the governor’s office are exempt from the California Public Records Act. CalMatters’ multiple requests for emails between the governor’s office and the cities and counties slated to receive the tiny homes were denied.

The plan was simple.

The governor set up a big to-do when he made his tiny home promise in March of last year. He had sample tiny homes set up in the Cal Expo event center to use as a backdrop as he spoke. Local officials, including Sacramento Mayor Darrell Steinberg and San Jose Mayor Matt Mahan, flanked him to show their support and gratitude.

The venue was also strategically chosen—Sacramento planned to set up its allotted 350 tiny homes right there at Cal Expo.

The plan was simple: The state would buy the tiny homes, and the California National Guard would help prepare and deliver them “free of charge and ready for occupancy.” Los Angeles was promised 500 tiny homes, Sacramento 350, San Jose 200, and San Diego County 150.

But the project’s parameters changed. Instead of buying and delivering the units, the state decided to send several of the cities cash grants and let them order the tiny homes themselves. In San Jose, this left the city on the hook for more money than anticipated. The state awarded the city $13.3 million.

According to Mayor Mahan, building the planned tiny homes for 200 people will cost $22.7 million. The mayor said San Jose told the state it would rather get tiny homes with en suite bathrooms, which are more expensive. But, Mahan said, San Jose was willing to cover the cost difference. Instead, Newsom’s administration decided to provide cash grants in place of fully built tiny homes. It’s more efficient, Hassan said.

If you look at 200 people divided by $22.7 million, this adds up to $113,500 per person. The cost for 200 people with Cargo2Casa is only $25,000 for each person. The Cargo2Casa program costs $88,500 less than the State program per person. Cargo2Casa caters to families. Each unit will house two adults and two children in a fully furnished two-bedroom home.

Finding space to put these tiny homes — which is the responsibility of local cities and counties — also proved challenging for the State of California. Plans to place Sacramento’s tiny homes at Cal Expo, where Newsom made his splashy announcement last year, fell apart. Instead, the state intends to set up 175 tiny homes on Stockton Boulevard. The county plans to install the remaining 175 on Watt Avenue.

Cargo2Casa does not have a problem finding homeowners with large lots who are happy to have a fully furnished Cargo2Casa in their backyard that they can rent out for Section 8 families.

To find the homes with large lots, Cargo2Casa used AI to find 1,402 homes in Orange County that had the perfect backyard lots for the Cargo2Casa homes.

Jim Forde, the director and founder of Real Estate, has been in the field for over 34 years. 22 of the 34 years, he was the training director for Keller Williams Realty and owned Approved Real Estate Academy. One in ten Orange County agents was trained by Jim Forde over the past 22 years.

With Jim Forde’s agent following, it took less than one week to sign up 124 agents who will help homeowners with the paperwork and government grants. Cargo2Casa will start by building one home per week. The plan is to ramp up to 10 homes a week.

In March, a year after Newsom named San Diego County as one of the tiny home recipients, the County Board of Supervisors finally approved a location for the project in Spring Valley. But there’s still a lot to do. The county must test the soil and make sure the site is safe. After that, officials plan to get community feedback on the project. The county has not yet bought the tiny homes or set an opening date.

“Like every other homelessness policy solution, local governments are fundamentally the drivers and fundamentally the implementers,” said Jason Elliott, Newsom’s deputy chief of staff. “What the state has done is provide billions of dollars in new investment, dozens and dozens of bills to cut red tape, and a policy framework that pushes for faster action to resolve unsheltered encampments. But as we have seen time and time again in California, local commitment and partnership is the other side of that coin.”

In contrast to San Diego County, San Jose approved plans to set up tiny homes at the Cerone bus yard in October. Even so, Mahan said the state didn’t send San Jose a grant agreement until March.

Of the four communities promised tiny homes, the state has made the most progress in Sacramento. In late January and early February, the state bought 155 units from BOSS, a tiny home company based in Montebello in Southern California. Kris Van Giesen, senior vice president of community development, said those units, most of which are 70 square feet, have been built and are ready to ship to Stockton Avenue.

Hassan said that after a brief delay due to rain, a state-hired contractor has started building out the infrastructure at the Stockton Avenue site. It’s slated to open this fall.

In Los Angeles, city officials still haven’t finalized locations for their tiny homes.

“The city has been working diligently to evaluate potential sites, coordinate relevant departments, and prepare plans that will be submitted to the state by the end of May,” Gabby Maarse, a spokesperson for the mayor’s office, said in an email.

No one is ordering

Another big selling point of Newsom’s plan is that his administration opened the contracts so that other cities and counties (in addition to the chosen four) could use their own money to buy tiny homes from the six approved vendors without going through a time-consuming and bureaucratic request for proposals process.

That move was supposed to help deploy more tiny homes quickly and, therefore, move more people out of encampments. But CalMatters spoke with all six approved vendors, and none have received any orders through that process.

Several companies said a handful of cities have reached out and expressed interest. But without cash from the state, many are finding it hard to pull the trigger. In Los Angeles, city officials still haven’t finalized locations for their tiny homes.

“A lot of these cities are struggling to find the funding they need,” said Amy King, founder and CEO of Pallet.

Valgardson said the state insists on independently approving any promotional materials the vendors put out. After his company, Irontown Modular, accidentally posted marketing materials online prematurely, the state made them take the materials down and get approval. It took almost two months to get the green light, Valgardson said.

The tiny home companies said they had to jump through myriad hoops to secure the state contracts. Several said they had to design new products specifically to meet the state’s strict requirements for everything from vapor-resistant light fixtures to emergency exit lighting. It took months and cost tens of thousands of dollars, Valgardson said.

David Baldwin, owner of AMEG, expected orders to start rolling in by December of last year. It’s “a little bit frustrating,” he said. “We’re ready to go,” he said. “We have people chomping at the bit that wants to go help.”

Cargo2Casa is doing well because it is a community non-profit that is run like a high-tech company. To save the cost of rent, the homes are built at schools and back lots of Orange County industrial companies. The labor is provided by students and volunteers. Each piece is precut and numbered. This makes the homes easy for the volunteers to build. The big saving in time and money comes from using Ocean Containers. You do not have to spend money and time building the walls, floor, and roof with an Ocean Container.

Cargo2Casa is different from most non-profit companies as its operational costs are covered by profit from the sale of its container homes. The only fundraising that Cargo2Casa does is for the start-up costs, such as insurance, permits, and tools to build the homes.

Cargo2Casa is a charitable and educational organization that brings people together to build low-cost homes out of ocean containers. Creating low-cost housing out of land a homeowner already owns not only lessens the burden of the government to provide additional housing but educates homeowners on optimal ways to create low-cost housing and provide a secondary income. These homes are sold to homeowners to supply assisted rental housing, and Cargo2Casa also provides educational programs to help homeowners learn about the financial benefits of adding accessory dwelling units (ADUs) to their properties. By creating low-cost housing and helping homeowners generate additional income, Cargo2Casa is helping to address the affordable housing crisis and create more sustainable communities.

In addition to providing affordable housing, Cargo2Casa also trains underemployed community members in construction and teaches real estate and lending agents how to do construction estimates and site plans. This training helps people in the real estate industry who have been impacted by the high cost of housing and helps create a more diverse and inclusive workforce in the construction industry.

Racially inclusivity, and its mission is to create a world where every person has a decent place to live. The organization’s vision is to create sustainable communities through low-cost container homes, home ownership, rental income, neighborhood civic engagement, advocacy, home repair, and economic development.

Cargo2Casa’s work is particularly important because freight companies are creating an enormous surplus of empty shipping containers at ports. Re-using these containers for home-building purposes reduces the need for new materials and helps to create more sustainable communities.

For more information, contact:

Jim Forde

Director

Cargo2Casa

4040 Barranca Pkwy. Ste. 100

Irvine, CA 92604

Phone: 949-992-8239

Email: Jim@Cargo2Casa.org