Can Micro-Real-Estate Developers Help Solve the Homelessness Crisis?

Proposals to erect housing for the homeless often incite panic in gentrifying neighborhoods, but converting garages into habitable dwellings could be a harmonious solution.

Proposals to erect housing for the homeless often incite panic in gentrifying neighborhoods, but converting garages into habitable dwellings could be a harmonious solution.

By Dana Goodyear, The New Yorker


Jesica Vasquez is a thirty-four-year-old caseworker at Housing Works, a homeless-services agency in Los Angeles. Her job—to help people, many of them struggling with mental illness and addiction, find and remain in housing—puts her at the center of the country’s most extreme homelessness crisis. In Los Angeles, some forty thousand people live in cars, tents, sleeping bags, or boxes—the largest unsheltered population in the nation—and thousands of others live marginally, on couches or in shelters. Even when the number drops, as it did this past year (after a surge the previous year), the lack of affordable housing guarantees that the problem will remain a persistent one. A recent study by the Luskin Center for History and Policy, at U.C.L.A., found that Los Angeles is “unaffordable for almost half of middle-income renters and nearly all those who are poor.” Insufficient and expensive housing are often the reasons behind new cases of homelessness.

Vasquez earns forty-five thousand dollars a year. Her one-bedroom apartment, in a dilapidated, roach-infested building in brink-of-gentrifying MacArthur Park, where she moved after her landlord in Boyle Heights raised the rent thirty per cent, costs nearly twelve hundred dollars a month. Because she spends at least thirty per cent of her income on rent, she is what economists call “rent burdened”; the instability and poor condition of her housing also meets the definition of “housing insecure.” The month that she moved in, her neighbors began receiving rent-increase notices, of three to four hundred dollars a month. Eviction notices went up; undocumented families got spooked and moved on; some neighbors organized a rent strike. Every day, Vasquez is terrified that she’ll be next. “It’s very hard to come home and be stressed out about a lot of the problems that the population we work with are also dealing with,” she told me. “I’m here advising my participants, ‘Don’t worry, you’re not going to get a rent increase.’ When they are having anxiety, I try to keep them calm. Then I come home and I’m, like, Oh, my God, I’m getting three-day notices. I’m one or two checks away from being homeless myself.”

The grim irony of Vasquez’s predicament—shared by many front-line workers in homeless services—has, for the first time in a long time, some hope of resolution. Recognizing California’s housing shortage and its role in driving poverty, Governor Gavin Newsom has offered a “Marshall Plan” for housing: his first state budget proposed more than two billion dollars for the construction of low- and middle-income housing and for homeless services. The details of the spending, and how they relate to the 3.5 million new homes that Newsom intends to have built by 2025, are still being worked out in the legislature. But Newsom’s focus on housing could help usher in a construction boom in Los Angeles similar to the postwar building spree of low-lying single-family tract homes that shaped the city as we know it.

In the meantime, those aging homes—produced in the heyday of the car cult—could provide an unexpected reservoir of housing, in the form of the detached two-car garage. Thanks to a 2017 state law that lifted restrictions on accessory dwelling units, or A.D.U.s, old garages can now be converted into habitable spaces. In Los Angeles County, there are a quarter million detached two-car garages. Steven Dietz, an asset-allocation expert who teaches business at U.S.C., is the C.E.O. of United Dwelling, a new development company that proposes to lease some of those garages from homeowners, convert them into dwellings, and rent them out at below-market rates to the homeless and the housing insecure. (United Dwelling will accept Section 8 housing vouchers.) A portion of the rent will be shared with the homeowner. The average annual household income in the areas in which United Dwelling plans to build is fifty-eight thousand dollars; rent from an A.D.U. would bring the homeowner an additional six thousand dollars a year (and a property-tax increase of about four hundred dollars). United Dwelling will handle property management and maintenance. As for parking, the A.D.U. law doesn’t require it, though the units need to be within a half mile of public transportation or within a block of a ride-share-pickup spot.

Each United Dwelling garage-conversion unit features built-in appliances—dishwasher, gas range, and washer-dryer—and French doors that open onto a tiny patio with a trellis for shade.

Each United Dwelling garage-conversion unit features built-in appliances—dishwasher, gas range, and washer-dryer—and French doors that open onto a tiny patio with a trellis for shade.

The biggest impediment is the stigma around the idea of homelessness. Proposals to erect housing for the homeless tend to incite panic in gentrified and gentrifying neighborhoods. With A.D.U.s, the structures are already there, in harmony with the character of their surroundings. Rhetoric about a neighborhood’s changing “character” is often used by not-in-my-back-yarders to justify resistance to new housing, especially when it’s intended for poor and societally disadvantaged people. Dietz hopes to help homeowners see “homeless” as a label that applies not just to acute cases like those Vasquez manages but also to people, like Vasquez, who are struggling to find appropriate housing—social workers, nursing aides, teachers.

Overcoming prejudice and fear, or just the discomfort of sharing, may simply be a matter of appealing to homeowners’ needs: for income and for help. In the best cases, Dietz says, the match between homeowner and tenant could yield multiple advantages. He told me about a homeowner he found in Leimert Park, in South Los Angeles, who lives five doors down from a school. The future tenant he identified teaches there but currently commutes two hours each way from the Antelope Valley, the closest housing she can afford. The homeowner has a two-year-old. Could the teacher occasionally help with childcare? Dietz hopes that by year’s end he’ll be starting twenty conversions a week. “That’d be a thousand a year, which is a drop in a bucket compared to the six hundred thousand the city needs,” he told me.

But would anyone really want to live in a stranger’s four-hundred-square-foot garage? United Dwelling hired a small-house architecture firm called Modativeto design the units, which feature built-in appliances—gas range, dishwasher, washer-dryer—and space for a large TV, a queen-size bed, a nightstand for keys and chargers, and a bin to store extra bedding. (The architects studied tiny houses, micro-apartments, and R.V.s to come up with the layout.) To create an “indoor-outdoor” feeling, they included French doors that open onto a tiny patio and a trellis to provide shade in the day and protection from the homeowner’s headlights at night.

The other day, I met Christian Návar, a general contractor and co-founder of Modative, and his wife, Krystal Návar, who works with him as a construction manager, at a job site in West Los Angeles, where they are building a prototype of the United Dwelling design for a couple who own two Vietnamese restaurants. They intend to use it as a “granny flat,” a place for the wife’s mother, who takes care of their two young children, to live. Outside of the house—a nineteen-forties beige stucco box with a tile roof—the Návars had set up a kiosk with flyers. “Build a Home in Your Backyard,” it said. “Granny Flat, Crash Pad, Guest House, Rent A.D.U., Rent Main House.”

To the right of the house, a long cement driveway led to a gutted beige stucco garage. Inside was a big mound of dirt—foundation work was under way—and the beginnings of framing for the walls. Several workers in hard hats measured beams. Krystal brought celebratory Starbucks: that morning, they’d passed their first inspection with the building department. The workers, Christian explained, were first-timers, hired through Chrysalis, an employment agency for homeless and low-income people, many of whom were formerly incarcerated. Their participation would bring an additional meaning to United Dwellings’ work. “These guys, who didn’t get a lot of opportunities, can end up back where they grew up, helping to build housing for themselves in neighborhoods that are getting gentrified away from them,” Christian said. For homeowners struggling with income, he said, A.D.U.s can be transformational, turning them into “micro-real-estate developers.”

One of the workers, Eslie Taylor—twenty-eight, with long dreads underneath his hard hat—said that he grew up in Los Angeles, near U.S.C. Later, his family moved to the desert. He had been to prison, then found work as a janitor. This was his first construction job; before starting it, he had never picked up a power tool. “I watch a lot of renovation TV,” he said. “HGTV and YouTube. They teach you. It’s inspiring. I love to tell the story of how California’s changing and allowing people to build A.D.U.s.” He looked around the site. “This looks dirty, but it’s going to be a real nice place. I tell my wife, ‘I want something like this.’ ” At the moment, he and his wife live in East L.A., in a house that his mother owns. His new plan is to persuade his mom to become a developer, starting with a little house for him and his wife in the back yard.

Jason Lee