[Hpn] Boston, MA - A workable solution for the homeless - The Boston Globe - July 6, 2002

Editor Editor <hccjr@bellsouth.net>
Sat, 06 Jul 2002 11:00:45 -0500

A workable solution for the homeless:
Single-room occupancy units are one of the last forms of
affordable living space available to the inner-city poor and transient

By Richard Cravatts - The Boston Globe - July 6, 2002

CAN THE PRIVATE sector be motivated to help build housing for the nation's poor?

If government and nonprofit housing organizations help modify regulations
working against the creation of such housing, the answer may be yes.

Boston-based nonprofits - including the Pine Street Inn, Caritas Communities
Inc., and the South Middlesex Opportunity Council - have recently demonstrated
that the creation of SROs (single-room occupancy units) provides a much needed
and valuable product for individuals who otherwise might end up homeless.

The problem is not the scarcity of potential renters; the long waiting list of
individuals eager to rent these low-cost accommodations points to the need for
new solutions to creating this form of affordable housing - a task beyond the
capacity of nonprofits working on their own.

Single-room occupancy units are one of the last forms of affordable living space
available to the inner-city poor and transient.

Unfortunately, their benefits were long unrecognized by social scientists and
urban planners, who saw them as dangerous and degrading to tenants, undesirable
to neighborhoods, and generally unwelcome in urban renewal plans.

They were hastened out of existence nationwide by both federal and state policy
beginning in the 1950s. Between 1974 and 1983, some 896,000 housing units
renting for less than $200 a month were lost to demolition or conversion.

Moreover, tightening fire and building codes had made the prospect of building
new SROs impractical and unprofitable, particularly given the stringent
requirements for minimum living-space square footage, parking, and cooking and
toilet facilities commonly included in local zoning and health bylaws.

One innovative solution to the problem of creating SROs was found in San Diego
in 1984, and it may serve as a model for Boston.

San Diego policy makers were persuaded to let a private developer provide a
model by which new SROs could be built. That project came to be known as the
Baltic, an SRO named after the cheapest property on the Monopoly game board.

In an engaging case study written at Harvard's Kennedy School of Government,
Andrew Jack and David Kennedy described the Baltic as ''a four-story, 207-room
building with a density equivalent to more than 700 units an acre. The rooms
were only 120 square feet each, but each contained, in addition to a bed and
storage space, a microwave, a large sink with a garbage disposal, and a toilet
(partitioned but not closed off from the rest of the room). Communal showers
were on each hall.''

Most significant, though, was the final per-room cost: ''Construction costs -
including land - were consequently very low, only $14,868 per unit.'' Even the
Baltic's below-market rents in the $200 to $285 range would therefore be
sufficient to cover costs and allow the developer a profit.

The developer, Chris Mortenson, was happy to pay for the property himself,
except for two concessions he eventually received from the city. One was a
relaxation in the way the existing building codes would be interpreted and
enforced. Tiny rooms with adjacent open toilets and partial kitchens were
forbidden by California codes - as they are in Massachusetts.

The city designated a new type of dwelling unit - a ''living unit'' - which was
something in between a hotel-sized room without a kitchen and a larger,
residential-sized room with separate kitchen and toilet facilities.

The only direct subsidy from the city was a low-interest second mortgage given
to help complete the project's permanent financing.

In return for that participation, 20 percent of the Baltic's units were set
aside for poorer tenants at reduced rent levels - capped for the life of the

The Baltic model illustrates how government can help ease, rather than
constrict, affordable housing creation by helping the private sector do the
right thing. A key factor in that equation is flexibility in interpreting zoning
and building requirements.

That means, for instance, that existing regulations defining acceptable
density - the number of units on a certain sized parcel of land -should be
modified, given high land costs for the developer and the critical need of
housing units for the very poor who otherwise might be homeless.

City parking requirements that mandate that minimum numbers of parking spaces be
provided for newly constructed residential buildings can also be reevaluated,
particularly since such rules drive up land acquisition costs, reduce the total
quantity of residential units, and might be inappropriate for a target group of
residents least likely to own automobiles.

The Baltic model is favorable to one in which the housing market is regulated
and an owner's right to use, renovate, or build a property is legally

And the important lesson of the entrepreneurial marketplace has historically
been that investors will more readily enter the market when government
regulations enhance - rather than diminish - the prospect of profitability.

Richard Cravatts writes frequently about real estate development and housing
 Copyright 2002 Globe Newspaper Company.
source  http://makeashorterlink.com/?Q1B120431

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