what are you thoughts on starting affordable housing nonprofit?

Question

we would like to work in Oregon and Sonoma County, CA

to provide equity in small homes, townhomes, plexes

developed as low cost as possible to help buyers :)

Laura Janosko · Answer

The CHN homes are typical single-family homes and can be conventionally financed. I’m not sure about CCSS. Tiny homes can be difficult to finance, but residents have equity in the paid off asset. Both programs allow tenants to become owners of the properties after a set # of years (for CHN it’s year 16 and for CCSS it’s year 8).

I don’t exactly follow the references in tenants getting trapped into affordable housing or starting the American Dream, but under both programs tenants receive years of classes, training and other services before taking possession of the home. If you’re looking for government financing (grants, tax credits, etc.) the process is likely competitive and may require that you offer some type of services for residents.

However, if you are looking for a solution that does not include government financing, there are lease to own programs and tiny home communities.

Lease to own programs are where the property owner enters into a lease with a tenant with the agreement that after certain conditions are met, the tenant may exercise an option to buy the property. The resident may be able to capture the equity from the rent being paid to date serving as a down payment and appreciation. https://www.zillow.com/mortgage-learning/rent-to-own/.

Tiny home communities are much cheaper and typically more ecofriendly/sustainable than a typical home, which reduces costs associated with homeownership. However, it often means less equity as well and may be more difficult to finance due to the low purchase price and the type of asset. https://www.thetinyhouse.net/how-to-finance-a-tiny-house/

This is pretty broad. Feel free to ask follow up questions.

Kalyanii K. · Answer

Oh good info!  I’ve been interested in doing something like this for awhile!

Tamara Deering · Answer

@John Acheson

I have been throwing around the idea of a non-profit housing organization for years.  I believe in better lives through better houses unfortunately I have never had enough dedication to following through.  My thought was to rehab the "war zones" and offer houses at affordable rates for Section 8, Heroes (police, teachers, first responders, etc) and every day working class people.  I don't believe in low income housing developments per se, but I do believe everyone deserves a good quality home they can be proud of.There are some great programs out there doing good work, my advice would be to find an organization that is doing what you want to do and follow them.  A lot of those organizations have written books or blogs about exactly how they got started.  Also, there is a lot of government assistance out there for affordable housing so learning to write a grant or finding a grant writer is important, finally every state has developed opportunity zones to encourage economic development that have huge tax advantages - you need to purchase by the end of the year to get the full benefits but the program continues for the next ten years.

My biggest limiting factor is I try and do everything myself.  I would love to talk with you and find out what your plans are and see if we can help each other get started and push through the analysis phase.  I'm concentrating on central Texas.

Chris Blackburn · Answer

Hello Lisa, I like what your are cooking!   I have been looking for ways to give back to the community and have really looked at housing as a great measure and impact.   I think there is a large spectrum of help that can be generated.   We are currently building smaller apartment complexes and I have some connections with affordable housing.  Providing fordable housing to heroes (teachers, social workers, volunteers, veterans) is a great way to support those giving back to the community.   I also see temp housing villages with common kitchens and bathrooms with a stepping stone to get to units with their own bathrooms and kitchens if they stay clean or get jobs.  (These facilities would be in/near industrial the industrial area that would then go to build more of these modular huts- hiring and training from the pool of people).  https://komonews.com/news/local/huts-for-the-homeless-catching-on-in-the-northwest   We currently have a 250 unit homeless shelter being built in N. Downtown Salem- Male only- no pets, no stuff, no children, no women.  This seems like economic suicide for this part of town as now they have to deal with 250 homeless hanging around the area.   The cost of the project is $15,000,000 at $2500 a "hut"  this would provide 6000 shelters with closing doors.  (not the land, mental counseling, drug counseling bathrooms, kitchens, staff)  We would have no homeless-  The City of Salem Has the land.   If I was not working 60+ hours a week- I could solve some of this problem.   I am looking at factory built modular housing and have several books with this being the best summary/overview that I have seen. Prefab Housing and the Future of Building: Product to Process   Mathew AitchisonModular would be a great way to build small affordable apartments to scale.Modular always looks like a unicorn- but the financial reality always seems to be different.   Currently housing/apartments is like hand building a Ferrari at each building site.  Simple, small, same buildings built in a factory would have to scale to be cheaper, faster, and better quaility.  Build the same plan over and over and over-  Always on flat ground, always the same config.   Same with the Conestoga Huts.   The solution is getting the business, the indivuals, the volunteers, the churches and the governement working together for a solution.   If I can have a few more wins on my projects- I may look at building both a village and real apartments to support our community.  The paperwork alone is a full time job that I currently do not have the staff to allocate.  If I can work with smart people to come up with transitional plan and a hero apartment plan-  Build it- share all the docs and processes and plans with anyone who can use them and start a blueprint for others to improve on and follow.   I have a great mixed used location that is isolated by 2 train tracks on either side, has amazing water views and could support both affordable and transitional housing.  Maybe I will make a call.

Erick Vallejo · Answer

I was just discussing this idea with a few friends here in Sonoma county. I'd be interested in seeing where you go with this. Let me know if you need any help.

John Acheson · Answer

Laura, thank you so much for your comments and mentioning some business models to take a look at. As per the post above, I'm trying to figure out a way to connect homeless, poverty, low-income families to the American Dream and am frustrated by affordable housing trapping Americans out of the possibility of building equity towards a dream.

Do you know if the two nonprofits you mentioned offer traditional financeable legally zoned homes that can build equity over and over for many families over the years?

I really like the idea of owning tiny homes but most of the ones I've researched on YouTube are rural and probably not legally zoned, insurable and therefore NO financing.

Do you have any ideas for let's say a family making minimum wage to be able to get financed, into a home, build equity, to start the American Dream.

I don't like the idea of affordable housing trapping people

and believe that equity and the ability to sell your home

for a PROFIT is a really important part of the American Dream

that most all nonprofits are NOT allowing or capping/restricting.

Do you know of any stories like this: family buys tiny home, lives there 2-3 years, sells for a small profit for a down payment on a starter home, moved into 2nd home and builds equity again, and starts dreaming of their American Dream.

That's how it works with middle income and up,

so why can't we make a model for low income?

John Acheson · Answer

Chris, thank you very much for connecting your expertise here! There are so many ideas to pursue in affordable housing and I'm still in the first month of research so your post is very helpful from boots on the ground experience. I'm sensing that building affordable rentals doesn't seem to be working very well under the current system as you mention so many other great ideas that many Americans love incl. tiny houses, huts, temporary shelters, etc. Are those type of projects legally zoned in and is there financing avail. for buyers if they wanted to buy a tiny home, hut, etc?

The problem I have with "affordable housing" is that it usually refers to subsidized rentals which trap people out of the American Dream. Is there a way we can help people with shelter AND provide stepping stones towards equity into the American Dream?

It seems like Habitat and First Story for example either have equity caps and/or residence rules that trap buyers into a long term situation.

Shouldn't homeless, poverty, low income, etc. Americans have the same chance at the American Dream as middle income and up?

I think so and am researching how to spark the American Dream with the lowest possible financeable home ownership model.

With the new Oregon plex laws I'm thinking a small group of four townhomes on a donated lot that could sell to a family making minimum wage without any equity caps. is a business model I'm researching.

I just don't like the idea of trapping renters/home owners with subsidies/equity caps.

With that said, the small homes First Story is doing with $0 down 0% mortgages is a VERY INTERSTING strategy from a size and financing angle.

Thank you again for sharing the realities of affordable rentals.

John Acheson · Answer

Jennifer, welcome to our affordable housing thread :) We could really use your help...

How does fundraising differ from providing affordable housing projects (rentals)

vs. affordable home projects (small starter homes) without "equity caps?"

How could we go about asking for single family home lot donations from potential donors?

As per a TED video I watched last night, it's all about telling the story of a family's transformation

and NOT talking about all our ideas, programs, mission, problem, etc.

But in a startup, we don't have any stories yet, so I'm thinking 2-3 years of shoestring mode...

Jennifer Dow Rowell · Answer

@John Acheson this is so exciting.  I work in a nonprofit (fundraising) and have worked in affordable housing in and around the Bay Area for years.  Huge need, good for you.  I would love to hear more as you progress!

what are you thoughts on starting affordable housing nonprofit?

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