Many cities have seen the ranks of their homeless population grow since the start of the pandemic, and Seattle is no exception. At the start of the pandemic, city officials worked tirelessly to address the problem by setting up new shelters as quickly as they could. The city even went so far as to cover the cost of hotel stays to keep people off the streets and away from overcrowded shelters in an effort to limit the spread of COVID-19.
But putting the homeless up in hotels isn't a sustainable solution due to the cost involved. Thankfully, a new company may have a near-term solution to the city's ongoing crisis.
Compact, cost-effective housing
City Pods, a modular housing company, thinks it may have solved Seattle's homelessness crisis, at least for the time being. The company has proposed placing modules in vacant warehouses and other commercial buildings that currently aren't in use. Doing so would effectively turn them into dormitories for the homeless -- or what CEO Keenan O'Leary likes to call wellness centers for those seeking shelter.
O'Leary insists that these centers can be built for far less money than King County is paying for hotels as part of its $350 million Health Through Housing initiative. In one case, the county forked over $313,000 per room for a North Seattle property.
Specifically, O'Leary is convinced that warehouses and other buildings with high ceilings can be acquired and retrofitted with hives of pods for $80,000 a unit. The pods serve as individual living spaces and cost $12,000.
Of course, additional funds would be needed to outfit these buildings with the right technology and built out kitchens and hygiene centers. But overall, the proposal at hand is a cost-effective one for addressing a very pressing problem.
O'Leary insists that developing permanent supportive housing could take decades due to the high cost and logistics involved. And the city can't afford to wait that long given the number of people it currently has living on the street.
Furthermore, O'Leary's proposed setup lends to easy deconstruction. The properties in question can always be reverted to their former state and resold if the city comes up with a better longer-term solution for housing the homeless.
A scalable solution?
Seattle isn't the only city in which the homeless population has soared since the pandemic began. If converting warehouses and other large spaces and implementing a pod setup ends up working well in Seattle, other metro areas with large homeless populations, such as New York City and San Francisco, may look to follow suit.
Pushing aside the humanitarian angle, homeless contingencies can drag down the value of the local real estate. That's not something residential or commercial investors want to see happen.
And so, as cities rework their budgets to come up with plans for longer-term solutions, quick warehouse conversions may be a viable near-term option for putting a roof over the heads of the people who need one. If local property values are preserved in the process, that's an idea real estate investors should wholeheartedly support.