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In March last year, California Gov. Gavin Newsom promised 1,200 tiny homes to temporarily house homeless people, specifically those who already live in encampments, in four major regions across the Golden State.\u00a0<\/p>\n
The idea for the homes extend far beyond just a place to rest your head, though. Under the governor\u2019s plan, the homes are meant to create a tiny-home community\u2013with kitchens, dining and living rooms, common areas, and cabins for counseling\u2014to help people experiencing homelessness find stability.\u00a0<\/p>\n
Yet a year after the governor\u2019s announcement, the tiny homes have not housed a single resident, and only about 150 of them have even been purchased<\/a> by the state and cities so far. Changing parameters from the state, along with other bureaucratic delays, are to blame for the standstill.\u00a0<\/p>\n The plan<\/a>, a $1 billion initiative, is meant to cover the costs of contracting, delivering and installing tiny homes from six state-approved vendors<\/a>, and bring needed aid for the state\u2019s homelessness crisis<\/a>, as California has the highest percentage of homeless people living without shelter in the country, according to a 2023 federal report<\/a>.\u00a0<\/p>\n According to the state, the California National Guard was set to help prepare and deliver the homes \u201cfree of charge and ready for occupancy,\u201d but that changed last winter, when the state announced it would offload the responsibility to buy and place homes to the jurisdiction of each city and county. Now, some regions are left without enough money to afford all the homes they were promised, and others are getting caught up in lengthy board votes on where to place them\u2014all while the homeless remain unhoused.\u00a0<\/p>\n What will the $1 billion pay for?<\/strong><\/p>\n The governor\u2019s plan covers funding for 500 homes in Los Angeles, 350 homes in Sacramento, 200 homes in San Jos\u00e9 and 150 homes for San Diego County. But instead of buying and delivering the units ready-made, the state decided to send many of the cities cash<\/a> to let them order and install the tiny homes on their own. The decision means some cities, like San Jos\u00e9, are now responsible for providing more funding to the tiny home initiative than initially planned.\u00a0<\/p>\n According to a memo reviewed by the city\u2019s council<\/a> in February, the governor\u2019s office sent San Jos\u00e9 a fixed payment of $13.3 million so the city can construct tiny homes by itself, which San Jos\u00e9 Mayor Matt Mahan told Fortune<\/em> is about half the cost of buying and building its promised 200 tiny homes, which would cost $22.7 million.\u00a0<\/p>\n \u201cThe big moment for us was in March of this year,\u201d he said, when the state provided him with a grant agreement that spelled out how the state would subsidize the units. \u201cWe turned that grant agreement and a project delivery plan around within the same month.\u201d<\/p>\n San Jos\u00e9, he said, has already opened 500 tiny homes, mainly funded through local dollars, in different areas of the city\u2014and in addition to the 200 units under the state initiative, plans to open 500 more over the next 18 months. \u201cSan Jos\u00e9 has moved forward so quickly and stood up so many of these [units] because we have demonstrated that they work,\u201d he said, \u201cand have been able to secure community and city council support for devoting public land to tiny home communities.\u201d\u00a0<\/p>\n Mahan noted the units themselves are not the biggest cost nor the most important factor to consider in terms of improving homelessness on a state-wide level. \u201cWe need the state and county levels of government to support ongoing supportive services people need, such as mental health care, drug treatment, job training and other social services that states and counties are well suited to provide.\u201d\u00a0<\/p>\n The vendors have been approved, but orders are at a standstill\u00a0<\/strong><\/p>\n Last October, the state signed contracts with six companies approved to build tiny homes for the initiative, asking many of these companies to specially design units that would make up tiny home communities, including cabins for sleeping and other shared facilities, like kitchens, dining rooms, and classrooms.<\/p>\n One of the state-approved tiny home vendors, AMEG, has the ability to offer such long-term social support to residents. AMEG specially designed 18 different units meant to accommodate all the different facilities the state requested, including bathrooms, kitchens and laundry rooms. But the group, along with several other of the state-approved vendors, still say they\u2019ve received no orders.\u00a0<\/p>\n Long delays and strict approval criteria of the models \u201cis the nature of the beast when it comes to these kinds of government things,\u201d according to David Gonzales, AMEG\u2019s chief operating officer. \u201cWe\u2019ve changed whatever the state needed us to change in our models, and we\u2019re sitting at the ready,\u201d he told Fortune,<\/em> adding, \u201cthe anticipation is we\u2019re going to see something soon.\u201d\u00a0<\/p>\n Other vendors, including one called Pallet, also told Fortune<\/em> that no orders of tiny homes in connection with the initiative have been placed. Amy King, Pallet\u2019s CEO, told Fortune<\/em> the company can deliver tiny-home units, which typically cost around $19,000, or $55,000 with a bathroom, within 8 weeks of receiving an order. The company also keeps a \u201csafety stock of product on hand for emergency use,\u201d so cities and states can \u201ccall on us at any time to get shelters deployed and people housed.\u201d\u00a0<\/p>\n Kam Valgardson, the general manager of one of those tiny-home vendors, Irontown Modular, told CalMatters<\/em><\/a> <\/em>the group is \u201cabsolutely shocked\u201d that they haven\u2019t received orders for their modular homes. Securing the state contracts, he told the publication, required his company to design new products in order to meet the state\u2019s strict requirements on things like vapor-resistant light fixtures and emergency exit lighting, which took months and cost tens of thousands of dollars.<\/p>\n Which cities have built tiny-home communities so far?\u00a0<\/strong><\/p>\n As it turns out, securing a location to build tiny-home encampments is one of the biggest challenges many cities and counties face, as there is often considerable pushback from residents and companies concerned about maintaining the safety and quality of their neighborhood.\u00a0<\/p>\n \u201cIdentifying the site is one of the biggest barriers,\u201d San Jos\u00e9 Mayor Mahan told Fortune, <\/em>\u201cas is finding a place that has suitable land where you can secure a long term lease to use for years to come.\u201d\u00a0\u00a0<\/p>\n Of the four areas set to build tiny-home communities\u2014namely Los Angeles, San Diego, San Jos\u00e9 and Sacramento\u2014the most progress has been made in Sacramento, for which the state bought about 155 housing units from Boss, a Montebello-based tiny-home company.\u00a0<\/p>\n Sacramento, which was allotted 300 homes, initially planned to place tiny homes at Cal Expo<\/a>, the location of the state\u2019s annual fair and where Newsom first announced his homelessness initiative last year, but those plans fell apart<\/a>. Now, Sacramento is deploying<\/a> 175 tiny homes on the city\u2019s Stockton Boulevard, which is a \u201cpartially built, long-vacant retail center,\u201d according to Julie Hall<\/a>, a communications specialist for the City of Sacramento, who told Fortune \u201c<\/em>the first shipment of tiny homes arrived on site this week.\u201d The city plans to establish the remaining\u00a0175 homes on Watt Avenue.\u00a0<\/p>\n San Jos\u00e9 has already leased a site, Cerone bus yard, which will house all 200 of the state-funded units by July 2025.\u00a0<\/p>\n In Los Angeles, city officials have yet to finalize locations to build out their 500 promised tiny homes. Monica Hassan, the deputy director of the state\u2019s department of general services, told Fortune<\/em> the state has \u201cprovided their initially requested funding of $980,000 for one of their sites,\u201d which will include 33 beds and will break ground by the end of this month.<\/p>\n San Diego County had originally planned to establish its tiny-home community at a site on the county\u2019s Jamacha Road, but due to \u201cnumerous concerns from Spring Valley residents and the impact it will have in their community,\u201d decided to rescind the approval of the site, according to a letter the county sent to the governor\u2019s office on June 5. A spokesperson for the governor\u2019s office told Fortune<\/em> \u201cit is disappointing that San Diego County chose to abandon its efforts to provide tiny homes,\u201d and the \u201cstate plans to recoup the funding provided to them and weigh options for redeploying it to other jurisdictions.\u201d The situation \u201cunderscores the challenges faced at the local level regarding site selection,\u201d the state\u2019s spokesperson said, and will be discussed at the next board of supervisors meeting on June 25.<\/p>\n To be sure, roadblocks such as resident complaints can considerably delay or even halt plans to build tiny-home communities completely. Still, some cities, like San Jos\u00e9, could serve as a model for how to successfully establish them while also reducing neighborhood crime rates.\u00a0<\/p>\n In the neighborhoods San Jos\u00e9 has built communities in, Mayor Mahan told Fortune<\/em>, \u201cwe see fewer 911 and 311 calls, a reduction is calls for service for crime and blight. And it actually makes a lot of sense because we\u2019re getting folks who are living in very insecure and unstable environments with no rules, no security or sanitation and we\u2019re moving them into a managed site with all those things.\u201d\u00a0<\/p>\n The tiny-home communities are meant for people \u201cto stop having to worry about the most basic things, like where their next meal is coming from or where to use the bathroom so they can start to focus on their future.\u201d At San Jos\u00e9\u2019s tiny home sites, Mahan said, \u201cwe have seen that of the 1,500 people who have come through one of these 500 units, 70% of those people remain housed up to three years later, indoors and off the streets.\u201d\u00a0<\/p>\n<\/div>\n