Poverty is not a stable phenomenon. It is variable in time and density. It can be affected by economical factors and it can influx on economical factors. It can also influx on politics, global wealth, global finance, global trades and geopolitics. Housing and food are two main conditions that make people poor or not, because these conditions will determine their health, their mental stability, their happiness and their industrial vigor.
In September 2019, The Council of Economic Advisers released “The State of Homelessness in America“, “We estimate that if the 11 metropolitan areas with significantly supply-constrained housing markets were deregulated, overall homelessness in the United States would fall by 13 percent. Homelessness would fall by much larger amounts in these 11 large metropolitan areas, for example by 54 percent in San Francisco, by 40 percent in Los Angeles, and by 23 percent in New York City. On average, homelessness would fall by 31 percent in these 11 metropolitan areas, which currently make up 42 percent of the United States homeless population.”
In the same report: “Expanding the supply of homeless shelters shifts the demand for homes inward and increases homelessness. A larger supply of shelter entails a higher shelter quality (i.e., characteristics of a shelter that make it more desirable as a place to stay) at any given number of beds. Mandating a right-to-shelter with a sufficiently high minimum quality level could thus substantially increase sheltered homeless populations.”
The overall homeless population map compared to the map of home price-to-income shows that there is a correlation between homelessness and the cost of housing. The following map from Visual Capitalist shows “How Many Hours Americans Need to Work to Pay Their Mortgage”. Nonetheless cost-burdened housing is associated with homelessness but people paying a mortgage are burnt-out from working.
In this context, poverty is not a factor that brings to homelessness. Economical factors are the real reasons that bring people to lose control of their own lives until they fall brutally into the extreme situation of homelessness where poverty gains power and keep them down. Economical factors will not stop by building shelters and the Council of Economic Advisers shows indeed that building shelters may accentuate the housing crisis.
In 1907, during the progressive era, Maud Barnett, State Library Clerk, authored “The School Beautiful” where she writes “It is needless to say children delight in the beautiful; they are educated by the beautiful and appropriate. The sense of beauty develops under favorable conditions and affects for good the whole attitude toward life. The love of the beautiful is necessary to the complete man. If this fact had been duly appreciated at all times by school boards and the general public, doubtless long before this the average schoolroom and school grounds would have been made attractive.” Her book provides directions to decorate a school and the reason is this: “He who can do a day’s work in a day, and a year’s work in a year, has a tremendous advantage over the man who is feeble, sickly, or otherwise incapacitated for strenuous labor. To shut up our children in dark, dingy, unventilated schoolhouses, in this day of knowledge and enlightenment, is little short of criminal. Shall we not have in this state, a revolution with respect to the appearance of school grounds and school buildings both exterior and interior, but particularly the latter, and shall we not also revolutionize our schools with respect to heating, lighting and ventilating?”
The SAB Center will use the resources available within the group quarters among artists, designers and re-homed homeless people to create gardens, to manage shared areas, to manage the farm, to manage the animal shelter, to manage nature preserve, to manage events, to manage the makers space, to decorate and to value how the sense of beauty can change the economical factors. Self-sufficiency and happiness are the elements that rationalize housing with a cost of housing that leaves enough money for food, clothing, fuel, heat, light, and sundries.
Poverty, in “old schools books”, is not about having less money. Poverty is the deprivation of rights on the quality of essential items that make a living sustainable. Quality of housing, quality of food, quality of clothing, quality of occupations. Quality also of the aesthetics that give a sense to everything else.
On a graphic of the Census Bureau, “Distribution of School District Poverty Rate by State: 2018”, California is with Missouri, at the same level as the whole United-States. This shows the importance of the demonstration program to value all aspects of affordable housing at all stages of the project, before the construction of the village, during the construction and after. The sociological impact of the cost of housing will be measured on an economical level by monitoring the industrial vigor.
The demonstration program will follow different phases, before the construction of the village, during the construction of the village and after. Our goal is to collect as much data as possible to understand how we can improve the price of construction, the quality of engineering, the comfort and quality of life. To value the quality of life, we have chosen to focus on the ‘industrial vigor” of our residents, the way perception of happiness can boost their creativity.
Our goal would not be complete without a financial model to standardize the method that brings small investors into our construction programs. As we have seen since the early industrial era, the real estate plan has been disruptive by creating a speculative growth on the costs of housing. We want to create an investment product where investors will make money not by growing the costs of housing but by applying our financial mechanisms. The demonstration program will standardize those financial mechanisms to create valued investments for middle classes individuals and starters’ pension funds.
Real Estate investments are disruptive nowadays because they are left to a category of people who do not suffer from low wage. To correct the market, we suggest to create new real estate products where small investors can grow a portfolio starting with a minimum investment.
In Visual Capitalist, “From Novelty to Necessity: The Growing Tiny Home Movement”, we see a spontaneous initiative from buyers to buy tiny. The essential aspect is being debt-free. The second aspect is mobility. It is not mentioned in the article, but owning a tiny house also creates a capital that loses little to no value in time length if the property is well maintained.
The article does not take into consideration the ownership or the rental of the land, the difficulty to get insurances, the cost of insurances, hardship to live off grid, city regulations, and most of the time, the necessity to park where space is available, what can be far from work anyway.
On an average of 30 years, a tiny home owner may not pay a mortgage on the house, but he will have to pay for the land, either from buying it or by paying a rent. In a city like Los Angeles, the cost to park a tiny house is $1,400/month, at the top of what the owner has to pay for electricity, internet and since there is only one park in Los Angeles, the cost of commuting to work. After 30 years living in such conditions, a tiny house owner would have spent $504,000 for a land that he does not own, about $24,000 on electricity bills and $28,800 on internet connections. With an average of $50/week on fuel, the tiny house owner would have spent $78,000. With $634,800 total, the tiny home owner could have bought a house, sublet it and gained capital.
Tiny homes are not easy and cannot provide more freedom to their owners than the available market. Since this market is a niche, so is also the land available for it. In these circumstances, tiny homes are not a solution for the housing crisis. Even if a solution might emerge from the tiny homes movement, the complexity of land ownership brings severe limitations.
The untold real reason for buying a tiny house may have two factors. The difficulty to get a loan with a reasonable rate and the discrimination on housing that brings people to join a community where fashion and communication keep them ahead of a movement. Singularity in the United-States is weak, somebody needs a group to survive.
With a demonstration program, we want to show a different way to survive, raise a capital, stay mobile, and keep tight expenses. Our demonstration program will build 115 homes rented at different rates to different profiles of tenants:
- 20% researchers will pay $1,500/month
- 20% designers and artists will pay $800/month
- 20% students will pay $400/month
- 20% homeless people will pay $400/month
- 20% guests with variable seasonal prices starting at $90/day.
All utilities, water, electricity, natural gas, wifi are included in the cost of the rent. We will standardize this model to any other profiles of tenants and by building other properties, we will provide ownership solutions on the same model. After a number of years paying for a rent, a tenant may become owner. The social services that we will provide with our programs will prevent a tenant from losing home or ownership because of illness, hardship, unpaid wages, unpaid invoices, and such financial circumstances for which we can provide temporary support. It is unacceptable that people go homeless because of the abuse they may have been the victims and in every case, we must identify what solutions may exist to provide temporary and long term solutions. Those solutions must keep tenants in their homes while social services provide emergency financial support.
In an article from the Economic Policy Institute of 2014, “An Epidemic of Wage Theft is Costing Workers Hundreds of Millions of Dollars a Year”, “Millions of Americans struggle to get by on low wages, often without any benefits such as paid sick leave, a pension, or even health insurance. Their difficult lives are made immeasurably harder when they do the work they have been hired to do, but their employers refuse to pay, pay for some hours but not others, or fail to pay overtime premiums when employees’ hours exceed 40 in a week.
This failure to pay what workers are legally entitled to can be called wage theft; in essence, it involves employers taking money that belongs to their employees and keeping it for themselves. Amounts that seem small, such as not paying for time spent preparing a work station at the start of a shift, or for cleaning up and closing up at the end of a shift, can add up. When a worker earns only a minimum wage ($290 for a 40-hour week), shaving a mere half hour a day from the paycheck means a loss of more than $1,400 a year, including overtime premiums. That could be nearly 10 percent of a minimum-wage employee’s annual earnings—the difference between paying the rent and utilities or risking eviction and the loss of gas, water, or electric service.
Survey evidence suggests that wage theft is widespread and costs workers billions of dollars a year, a transfer from low-income employees to business owners that worsens income inequality, hurts workers and their families, and damages the sense of fairness and justice that a democracy needs to survive. A three-city study of workers in low-wage industries found that in any given week, two-thirds experienced at least one pay-related violation. The researchers estimated that the average loss per worker over the course of a year was $2,634, out of total earnings of $17,616. The total annual wage theft from front-line workers in low-wage industries in the three cities approached $3 billion. If these findings in New York, Chicago, and Los Angeles are generalizable to the rest of the U.S. low-wage workforce of 30 million, wage theft is costing workers more than $50 billion a year.
It is useful to compare the cost of these wage and hour violations with crimes that are better recognized and greatly more feared, though they are much smaller in their overall dollar impact. All of the robberies, burglaries, larcenies, and motor vehicle thefts in the nation cost their victims less than $14 billion in 2012, according to the FBI’s Uniform Crime Reports. That is well over one-third of the estimated cost of wage theft nationwide. Looking in more detail, in the United States in 2012, there were 292,074 robberies of all kinds, including bank robberies, residential robberies, convenience store and gas station robberies, and street robberies. The total value of the property taken in those crimes was $340,850,358. Those are not the robberies that were solved; those are all the robberies that were reported to the police, anywhere in the nation.
No one knows precisely how many instances of wage theft occurred in the U.S. during 2012, nor do we know what the victims suffered in total dollars earned but not paid. But we do know that the total amount of money recovered for the victims of wage theft who retained private lawyers or complained to federal or state agencies was at least $933 million—almost three times greater than all the money stolen in robberies that year.”
With a social welfare program, the SAB Center will provide emergency support to the tenants and assist them in filling with proper administration. The SAB Center will provide support until other funds become available. To sustain the social welfare programs, the SAB Center will manage Air B&B activities to increase revenues and create a special aid fund (a trust between the SAB Center and the Domaine des Crafts). The SAB Center will also offer the possibility for our tenants to sublet their rental part of the year. While they sublet part of the year, they may rent another property at no extra cost and their home becomes available for Air B&B. We have studied various scenarios:
Solution 1 : 20% are rented as an Air B&B to sustain hardship of the community.
|Initial cost of rental||$1500 x 23||$800 x 23||$400 x 46||$90 x 255||$120 x 110|
|Yearly incomeWith full time occupancy||$414,000||$220,800||$220,800||$527,850||$303,600|
TOTAL / Year = $ 1,687,050
Solution 2 : All profiles sublet one bedroom for a portion of the year as an Air B&B
Rentals in summer are $120/day and rentals in winter are $90/day.
|Initial cost of rental||$1500 x 23||$800 x 23||$400 x 46||23 units||SUB-TOTALOn Air B&B|
|90 days in summer||$248,400||$248,400||$496,800||$248,400||$1,242,000|
|90 days in winter||$186,300||$186,300||$372,600||$186,300||$931,500|
|45 days in summer and 45 days in winter||$227,700||$227,700||$455,400||$227,700||$1,138,500|
|90 days in the summer and 110 days in the winter||$476,100||476,100||$952,200||$476,100||$2,380,500|
|SUB-TOTALOn Air B&B||Rent on the rest of the year||TOTAL|
|90 days in summer||$1,242,000||$935,753||$2,177,753|
|90 days in winter||$931,500||$701,815||$1,633,315|
|45 days in summer and 45 days in winter||$1,138,500||$857,773||$1,996,273|
|90 days in the summer and 110 days in the winter||$2,380,500||$1,076,116||$3,456,616|
If we value all our Air B&B rentals at 65% occupancy, we can create between $605,475 and $1,547,325 / year out of the workers’ residence (not including the Domaine des Crafts resort). Additionally, we can create between $935,753 and $1,076,116 on all other traditional rentals of the workers’ residence. The annual revenue on the demonstration program is between $1,541,228 and $2,623,441 / year with 65% Air B&B occupancy. With extra revenue on sharetime, our residents are able to participate on the global welfare of the community.
Sharetime properties may be owned by independent investors who will buy a property, rent part of the year and let the SAB Center to sublet for the rest of the year. Researchers and artists may be part time or seasonal occupants. Homeless people may be displaced during holiday seasons or moved with activity projects while the units become available for AirB&B. The research program will value scenarios, the income they create and the impact on the community.
METHODOLOGY OF RESEARCH
DATA COLLECTION AND ANALYSIS PROCEDURES
Analysis of the costs of housing:
- Quantitative survey using custom AHS tables to define the ideals on 7 models of houses – survey among the users of co-working offices ;
- Analysis on the model of “The Elements of Modern Architecture: Understanding Contemporary Buildings” by Antony Radford, Amit Srivastava and Selen Morkoç;
- Design of the project, taking into consideration the previous results;
- Value engineering on each design, developed, compared and explained;
- Qualitative survey after the presentation of the project;
- Detailed estimates updated all along the project to define a final cost-unit;
- Comparison of our results with cost database construction softwares;
- Design of the “dwelling cards” to create a canon scored 100;
- Design of an “occupant card” to create a canon scored 100;
- Selection of a panel of architectural projects all over California to value with the “dwelling card” and the “occupant card”;
- Analysis and translation of our results on a map;
- Comparison of our results with the market value;
- Definition of standards in result of our program.
We will use graphic computers, cameras and the internet website as the landing platform.
Analysis of construction technologies:
- Recruitment of a team of “guild carpenters” among veterans and homeless people. We particularly encourage women in this program.
- Training of the guild carpenters on our technologies such geometry, mathematics, woods, tools, cuts, joins;
- Construction of small prototypes and testing (fire, deformation, seismic simulation, loads, compatibility of materials);
- Construction of the village according to architectural blueprints;
- Installation of wifi sensors to monitor energy production, energy consumption, energy stockage, comfort, water consumption, quality of water, quality of the air, quality of the dirt for our planters, structural deformations, sounds, condensation, usage of our community areas, presence of wildlife, comfort of the animals in our farm, presence of smoke or flames, robotic for cleaning and maintenance, resistance of thermal bridges, levels of radon in the air and in water, occupancy.
- Collection of the data from our sensors and monitoring with LogicMonitor;
- Semestrial analysis of the results and publications;
- Continuous training and development to sell manufactured homes through a new LLC (social enterprise);
- Definition of standards in result of our program.
We will host in the village 20% of students. All of them will provide service time on our R&D projects to monitor the data and compile the results. They will work under the supervision of our 3 researchers in residence in the village.
We will develop a wood workshop with the tools we already have and additional tools we plan on buying to train our workers.
The ethnographical approach of this research aims at defining the “industrial vigor” of the residents before they arrive in the village, and every step during one year to value if the size of the housing, the density of the village, the community spaces, the gardens, the farm and the nature preserve have an impact on their well being, their happiness and their “industrial vigor”. We will define industrial vigor by collecting data and we will value “industrial vigor” from the methodologies we develop. This program will be renewed during 4 years in order to compare the results during the development of the site.
- Psychological evaluation before entering the village. Researchers, artists and designers are particularly important for this research to value the satisfaction they have in their production before entering the village. The evaluation will value what stop them when they have projects, how satisfaction and dissatisfaction may influence their creativity, how housing, transportation, working environment play a role in their creativity and their motivations before entering the village.
- Quantitative survey to value the time involved to perform their tasks before entering the village. How long does it take to go from an idea to realization, how do they decide to produce their art, what trigger may interfere their decision, how many times do they have to produce samples and tests before achieving their desired results, does their work produce satisfaction, does their family and friends see their satisfaction, do they have projects for the future, how seriously do they believe being able to complete those projects.
- After 6 months in the village, we will conduct the exact same survey and we will compare the results. Same after one year.
- Psychological evaluation of homeless people to understand their stories and what brought them in being homeless, their level of hope or of despair, their social attention, their interactions, their aptitude to focus on a task, their aptitude to organize their time on a task, their autonomy, their acceptance of a leadership, their attitude toward management and rules. During the psychological evaluation, homeless people are not provided a house, but are hosted temporarily in a tenement, a boarding house or a guest room according to initial evaluations.
- Quantitative survey to value their time and behavior at the arrival in the village, how long do they stay in their rooms, how often do they use community facilities, and which facilities. We will use access cards to monitor all the moves from one space to another.
- After 6 months in the village, we will conduct the exact same survey and we will compare the results. Same after one year.
- After 6 months we will compare the first results from researchers, designers and artists with the second results from homeless people. By comparing those two surveys, we will try to value if the level of skills may interact with happiness and which factors may change the industrial vigor of the inhabitants. We will conduct the exact same comparison after one year.
- We will monitor a qualitative survey of the confessional to value how many times inhabitants use the confessional, for which purpose and see the evolution during their journey.
- Another aspect of our study is to define ethnographical behaviors, the way groups may form in the village, how they manage their time, value if there are conflicts, how to solve the conflicts and how to define a managerial methodology to keep the peace in a village, boost industrial initiatives and innovation. We want to analyse how the architecture is influencing the behaviors of individuals and groups.
- We will conduct qualitative and quantitative surveys all along the year to value how tenants perceive their home, the very nature of the program and the way housing, food and occupation have an impact on the way they perceive their future.
To be provided a home, all tenants agree to participate in our surveys and the psychological tests we conduct with independent therapists.
We will use videos, voice recorders, confidentiality journals, drawings, photography, tracking cards, LogicMonitor, and our internal servers to gather all information. Every six month, we will release a book that narrates the journey of our inhabitants with photography and “sayings”.
- Quantitative survey to analyse the factors of social responsibility in architectural projects. This survey will be conducted among architects, engineers, developers, real estate agents and volunteers from community organizations.
- Using the “dwelling cards”, the “occupant cards” and the results from our surveys, we will define a methodology to value social responsibility in architectural projects accordingly to the costs of construction, the quality of construction, the final cost of housing, the industrial vigor of the occupants, the costs of utilities, the cost of maintenance and the value of the property after 4 years occupancy.
- Creation of an ideal card for architects;
- We will create a trademark to incorporate our methodology into a label and we will create all the marketing to promote our trademark among architects and their clients.
We host in the village 20% researchers who will volunteer to conduct our surveys, analyse them and communicate our results.
We will use mainly computers to manage our surveys, our marketing and our communication programs.
Legal aspects of the program
- Definition of the notion of ownership as an individual and as a group;
- Legal aspects of the Joint Venture Capital LLC;
- Legal aspects of the maker space;
- Legal aspects to manage the group quarters;
- Legal aspects to develop a franchise.