Central Dallas Ministries

The Key to Opening Many Doors Is In Our Hands

A Simple Cure for Homelessness:

Single Room Homes

CENTRAL DALLAS MINISTRIES CENTRAL DALLAS COMMUNITY DEVELOPMENT CORPORATION Building community one person at a time.

One simple object, recognized by many, symbolizes the hope

of the American dream. A powerful thing. It can give a person

dignity, respect, independence, self-worth, pride and security

when they have none. All represented by one small object:

a key to the door of a place you call home.

Introduction In each of the 11 years that I have led Central Dallas Ministries, I have watched more and more friends and neighbors in the community where I live and work connect with opportunities through our strong programs. At the same time, I have watched the needs throughout inner-city Dallas expand while the safety net shrinks.

need to think bigger and seize opportunities where both the need and the opportunity are at crucial junctures.

Single room occupancy (SRO) housing is at a critical point in the city of Dallas, both in terms of need and opportunity. More than 6,000 people are homeless and there are less than 200 inexpensive efficiency apartments available to them.

Corresponding to this real

Council created a task force on homelessness, redevelopment plans are underway and the mayor – who recently met with us on this very issue – has made promises to a public that is tired of inaction.

Central Dallas Ministries cannot solve Dallas’ homeless problem. But we believe we can put a dent in it and set an example that may be replicated on a larger scale, here and elsewhere.

Our careful research tells us that SRO housing is the best opportunity we can offer our homeless friends and neighbors. Our project is ambitious, but it’s a necessary step. Importantly, the timing for such action is right.

Thank you for your time and interest in our vision.

– Larry James, CEO Central Dallas Ministries

SINGLE ROOM OCCUPANCY (SRO) HOUSING IS AT A CRITICAL POINT IN THE CITY OF DALLAS, BOTH IN TERMS OF NEED AND OPPORTUNITY. MORE THAN 6,000 PEOPLE ARE HOMELESS AND THERE ARE FEWER THAN 200 INEXPENSIVE EFFICIENCY APARTMENTS AVAILABLE TO THEM. Central Dallas Ministries will continue to connect people with greater opportunities, no matter how overwhelming the needs become. But to continue succeeding in the face of today’s challenges, we

human need is a strong public interest in a solution.

I am talking about the buzz at Dallas City Hall about shelters, SRO housing and the corresponding efforts to clean up downtown. The City

Published Sunday, February 6, 2005 – Larry James/The Dallas Morning News Larry James: A Homeless Solution So Simple, It Works

Hardly anyone heard what Tom Dunning, chairman of Mayor Laura Miller’s task force on homelessness, really said in his briefing last month before the City Council.

Homes. That’s right. Homes are what Mr. Dunning talked about. Something so simple that almost everyone misses We hear that it’s bad for it. People are homeless business when the homeless because they don’t have sleep on sidewalks or use homes. Dallas needs SROs and lots of PEOPLE ARE HOMELESS BECAUSE THEY DON’T HAVE HOMES. DALLAS them. Single Room NEEDS SROS AND LOTS OF THEM. SINGLE ROOM OCCUPANCY UNITS. Occupancy units.

Oh, he finally got around the outdoors for bathrooms. to unveiling the task force Relatively small and inexpenBad for property values. Bad sive efficiency apartments for for sanitation and crime. Bad, recommendation on site selection for the new homeless people to lease at bad, bad.

Homeless Assistance Center, below-market rates. Places a nice enough But how often do we hear spot just south that people sleep on the RIGHT NOW, DALLAS HAS FEWER THAN 200 of downtown streets, in the parks and SUCH UNITS AND 6,000-PLUS HOMELESS. and north of behind the buildings of our Interstate 30. But first he they can call home. That is city because they just don’t talked about solutions, real what Mr. Dunning reported have homes? solutions to the challenges to us. posed by people sleeping on the streets of Dallas.

Many homeless Dallasites qualify for various benefits that would allow them to lease apartments like these.

From a business standpoint – the best way to approach most civic problems – development and management of this type of home make lots of sense.

Right now, Dallas has fewer than 200 such units and 6,000-plus homeless.

Developing such homes in downtown areas has worked in every major urban center where it has been tried. Cities that address the need for homes find that they don’t need to worry about “getting the homeless out of downtown.”

Once in homes, these folks turn into neighbors! Nice transition. The most successful

We must have the courage, vision and good sense to take the next step and offer homes

SHELTERS ARE NOT THE ANSWER. SHELTERS ARE TO HOMELESSNESS WHAT FOOD PANTRIES ARE TO CHRONIC UNDEREMPLOYMENT AND HUNGER. THEY SIMPLY ARE NOT ENOUGH. downtown renewal efforts have found ways through mixed-used development to blend these units into comprehensive revitalization strategies.

Without homes, we cannot possibly make a dent in the real issues associated with homelessness. Shelters are not the answer. Shelters are to homelessness what food pantries are to chronic underemployment and hunger. They simply are not enough.

to those who do not have them. To make something good – not focus on the bad.

Larry James is the Chief Executive Officer of Central Dallas Ministries and Central HOMES. THESE ARE THE ANSWER. Dallas Community Development Corporation.

Larry’s e-mail address is: ljames@cdm-hope.org

Larry’s blog is: larry jamesurbandaily.blogspot.com

dignity

Questions and Answers

Q

Who are we?

Central Dallas Ministries is an expansive faith-based community development organization serving innercity Dallas with the county’s largest food pantry, as well as a family practice health clinic, civil legal services for the working poor, affordable housing and comprehensive programs in work-force development, children’s education and services for youth aging out of foster and juvenile care. CDM began in 1988 as a small food pantry serving those on the streets and has grown into one of the city’s most respected and

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well-known social service organizations with a presence in dozens of sites in South and East Dallas, as well as near downtown. Each year CDM touches more than 50,000 people.

Between 1997 and 2005, CDM’s operating budget grew from about $200,000 to over $4 million in response to the growing needs of inner-city Dallas.

Central Dallas Community Development Corporation is the economic development arm of Central Dallas Ministries. CDCDC is a 501 ( c )3 organization with CHDO (Community Housing Development Organization) status from the City of Dallas. To date, the CDCDC has completed one multi-family, workforce

housing development in East Dallas and is working with the Dallas Housing Authority on another large-scale development for the working poor.

Q

What do we want to do?

We want to double the number of single room occupancy homes (SROs) available in Dallas by opening an SRO building downtown.

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An SRO is a small, inexpensive efficiency apartment – the ideal home for many of our neighbors leaving the streets.

Currently there are fewer than 200 such units in Dallas for a homeless population of more than 6,000.

Q

Why build SROs?

A

Because they work.

“The cities that have actually reduced their homeless population have all done it with SROs,” according to Tom Dunning, who led Mayor Laura Miller’s Task Force on Homelessness.

We want to do what works. It’s time for Dallas to start moving homeless people off the street and into decent homes.

Every person needs a decent place to live. It doesn’t have to be big if you live alone, but it needs to be clean, safe and comfortable. Above all, it needs to feel like home.

respect

Rooming houses filled this need years ago. Now SROs do, but there aren’t enough of them.

The nation’s oldest and largest organization advocating for the homeless – the National Coalition for the Homeless – reported in their Sept. 2002 Fact Sheet:

A recent study of one SRO by the Department of Housing and Urban Development (HUD) found that 84.5% of disabled and formerly homeless tenants stayed in housing after one year. A four-year study by the Department of Health and Human Services of formerly homeless mentally ill adults now living in support-

that we will use two floors of the building for the relocation of Central Dallas Ministries’ other offices (administrative, development and program offices, including legal assistance, the CDCDC and work-force training). CDM will pay rent on those two floors and we will lease out the ground floor as retail

“…A HOUSING TREND WITH A PARTICULARLY SEVERE IMPACT ON HOMELESSNESS IS THE LOSS OF SINGLE ROOM OCCUPANCY (SRO) HOUSING…FROM 1970 TO THE MID-1980S, AN ESTIMATED ONE MILLION SRO UNITS WERE DEMOLISHED.” One recent study of clients using food pantries and other services such as those offered at CDM found that 90% listed “more affordable places to live” as their number one immediate need – ahead of morethan a dozenother needs.

ive housing found 83.5% of tenants remained housed after one year.

Q

What does an SRO look like, on the inside and outside?

At the back of this brochure is a trial pro forma for a hypothetical 12-story SRO building. We have assumed

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space, providing an income stream for the project’s longterm sustainability. This will leave room for 200 SRO units, of two different sizes, on the remaining nine floors.

The diagram on the next page shows a loft floor plan, which is one possible design for the smaller of the two. It is followed by a photograph of a successful SRO in Manhattan.

We have been very cautious in our assumptions. We have assumed that 20% of the SRO units will remain vacant and that 20% of the rentable commercial space will remain vacant, with average rents of only $8 per square foot per year.

Our budget also reflects costs that are well over the industry average. We expect to do better, but we want to be realistic and assure our investors that this project is based on data that will not place it at serious risk of failing.

However, even under these pessimistic assumptions, our plan ensures that the project can pay back the money borrowed to complete it.

Floor Plan Proposal

Here’s what a successful SRO development in New York City looks like:

THE COMMON GROUND COMMUNITY IN MANHATTAN IS ONE OF THE NATION’S MOST SUCCESSFUL SRO DEVELOPMENTS, WINNING NUMEROUS AWARDS AND DRAWING HEAVY PUBLICITY (FEATURED ON 60 MINUTES, AMONG OTHER NEWS OUTLETS). THE TIMES SQUARE BUILDING SHOWN HERE SERVES HALF WORKING POOR AND HALF FORMERLY HOMELESS PEOPLE.

independence

Q

Why locate it downtown?

Downtown is where SROs have been most successful in other cities. Services are downtown.

Jobs are downtown. Mass transit is available. If you don’t have a car, like most SRO residents, then downtown is the place to be.

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Q

Will an SRO development harm the neighborhood?

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Absolutely not – quite the opposite.

The experiences of other cities reveal that SRO developments strengthen the downtown environment. Moving people off the streets and into their own homes is a good thing.

Some objectionable effects

of the homeless population downtown diminish as people move into their own homes, according to those we talked to who have launched similar projects.

Q

Who will live there?

Anyone who needs a safe, clean and inexpensive place to live. People like Alfredo Rusk, 39, who has worked part-time as a computer specialist in CDM’s CyberSpot Technology Center for six months. Mr. Rusk lives in a downtown shelter but, with a few more hours, could afford his own “HAVING A PLACE OF MY OWN WOULD OPEN UP OTHER OPPORTUNITIES SRO unit.

FOR ME BECAUSE LIVING IN A SHELTER, YOU ARE REALLY RESTRICTED. He could IF I WANT TO WORK EXTRA PAST 6 P.M., I CANNOT BECAUSE I MUST not afford a CHECK IN BY THAT TIME AT THE SHELTER. IF I WANT TO RELAX AND market-rate TAKE MY SHOES OFF AFTER WORK, I CAN’T IN A SHELTER. YOU JUST apartment REALLY NEVER GET TO RELAX IN A SHELTER.” – ALFREDO RUSK on his salary.

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self-worth

The person who wrote Larry James after reading The Dallas Morning News’ Viewpoints column might also be a candidate for an SRO unit: Mr. James I just read your article “A homeless solution so simple, it works: single room homes” I’m mentally disabled & on Social Security Disability.

But when my parents die I fear I’ll be homeless. In your article you mentioned that some homeless people would qualify for programs that would get them in housing.

Can you tell me how to get in touch with these programs.

The Housing Authority is not currently taking new applications, they’re full.

Some of the residents who will live in our SRO will have been homeless. Some may be at risk of homelessness without access to an SRO to call home.

Others, because of additional circumstances or choices, may need to simplify their lives by finding a decent, inexpensive place in the city to live.

Q

What does it cost for a single room occupancy home?

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Between $300 and $500 per month inclusive of utilities.

Q

How will the residents pay for their rooms?

Some residents will have disability or veteran’s benefits.

Some residents will have Social Security or a pension.

Other residents will work,

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just as many of the homeless people on the streets do despite not having a home.

Q

What services will be provided to residents?

Central Dallas Ministries will make available the services it already provides, such as job training, legal services and medical care. In addition, we will partner with other organizations, both private and public, to provide all the services residents need. One small but valuable benefit to SRO tenants will be access to a phone and email – the very things that are needed to find a job.

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Q

Will the single room occupancy homes be safe?

We certainly think so – we’re going to move our headquarters to the same building and work there every day. Additionally, dedicated program and security staff will be available twenty-four hours each day to deal with any problems as well.

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There will be a basic set of house rules and standards of conduct prohibiting physical altercations and weapons, for example. Danielle Noble, a director with the successful SRO Housing Group in Los Angeles, said enforcing rules is key but so is making them minimal so as to reduce barriers. “Obviously you need a certain standard of behavior.

But you can encourage people to come in off the street by having as few barriers as

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possible,” she said. “That might mean allowing people enough room to bring their belongings, not requiring any religious affiliation and maybe offering but not requiring case management.”

Q

Will this project solve Dallas’ homeless problem?

We wish it would, but it’s only a start.

Dallas needs as many as 6,000 SRO homes and it has less than 200. Even doubling that number won’t solve the problem, and some homeless people will need facilities of a different sort.

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But we believe we can make a significant impact on the problem by connecting several hundred of the homeless to more self-sufficient, dignified lives. In doing so, we believe this project will spawn other

efforts – possibly some of our own.We really believe Dallas is the kind of city with companies and people who will jump in to help once they see how this works. We at CDM/CDCDC may not be able to solve homelessness, but we are confident that if we work together with a strong plan, we can significantly reduce the problem.

Q

What will this cost?

How will the financing work?

Six million dollars.

Initially, we need to raise more than $2 million in capital funds. We can then leverage this into an additional $4 million in loans (we will be eligible for at least two different loan programs offered by the U.S. Department of Housing and Urban Development, but we can also pursue private loans if

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necessary). Further details, including how we will cover operating costs, are included on the draft pro forma for our target project (a 12-story SRO building).

not know the exact cost until we have a building under contract, we are confident that this level of support will enable us to effectively launch and sustain this project.

How do the costs break down?

Who will provide the capital?

Q

Complete details are provided on the attached pro forma, but the general breakdown is:

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• $2 million to acquire a downtown office building with roughly 100,000 square feet of space; • $4 million to remodel the building into 150 to 200 SRO units, as well as office space for our programs.

These are estimates based on our target project (a 12-story building). Although we will

Q

Our plan is to raise $2 million in capital funds prior to submitting requests for loans to HUD. We project that half of this amount – $1 million – needs to be secured from private sources. We will then challenge the City of Dallas and several large foundations to match that amount.

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We can raise almost $500,000 through the sale of our current headquarters, whose operations will be consolidated into the SRO building to maximize the effectiveness and

security

sustainability of the project.

However, we need your support to raise the additional $500,000, which will position Central Dallas Community Development Corporation to request matching funds from the city and private foundations. Although this is a significant investment, the return is invaluable: two

Corporation are 501(c)3 nonprofit corporations.

Q

What if we can’t raise enough funds to carry out the project?

It’s up to you. We’ll deposit all funds raised for the SRO building in a separate account.

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WE REALLY BELIEVE DALLAS IS THE KIND OF CITY WITH COMPANIES AND PEOPLE WHO WILL JUMP IN TO HELP ONCE THEY SEE HOW THIS WORKS. WE AT CDM/CDCDC MAY NOT BE ABLE TO SOLVE HOMELESSNESS, BUT WE CAN SIGNIFICANTLY REDUCE THE PROBLEM BY WORKING TOGETHER WITH A STRONG PLAN. hundred homeless individuals can move into their own home at a cost of only $2,500 per person.

Q

Will my gift be tax deductible?

Yes. Both Central Dallas Ministries and Central Dallas Community Development

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If we can’t complete the project,

then we’ll return your money, use it for a different project, or give it to another charity.

Whichever you decide. We are confident that will not happen, but we want to ensure that the intent of your gift is carried out.

PLEDGE YOUR SUPPORT TODAY I am interested in:

䡺 䡺 䡺

Pledging my financial support for this project in the amount of $ ________________________________ Pledging my volunteer support for the project. I can offer CDM/CDCDC my talent in the following areas: Putting CDM/CDCDC in touch with others who might be interested in supporting this project.

Specifically, I have contacts with the following people/companies that might be interested: Here is my contact information:

Name ______________________________________________ Address ____________________________________________ __________________________________________________________ City __________________ State ________Zip __________________ Work phone ________________________________________

This form can be sent by fax to 214.824.5355 or can be mailed to: Central Dallas Community Development Corporation ATTN: John Greenan, Executive Director P.O. Box 710385 Dallas, Texas 75371-0385

Home phone ________________________________________ Work email ______________________________________________ Home email ______________________________________________

If you would like to learn more about this project or any of the work of CDM and CDCDC, please contact John Greenan at jgreenan@cdm-hope.org or 214.827.1000, x21. Thank you.

Downtown SRO/Mixed Use Development – Hypothetical Pro Forma – Stabilized Operating Statement RENTS UNIT NO .

A1 A2

UNIT TYPE

# OF UNITS

SRO STUDIO APT.

120 80

RETAIL / OFFICE TOTAL UNITS

UNIT NO .

A1 A2

RENT $425.00 $490.00 $8/sq. ft.

MONTHLY $ 51,000 $ 39,200 $ 10,667 $ 100,867

ANNUAL $ 612,000 $ 470,400 $ 128,000 $ 1,210,400

PER SQ . FT. 1.33 1.23 0.67

PER UNIT 5,100 5,880

TOTALS 612,000 470,400 128,000

200

POTENTIAL RENTAL INCOME SRO Studio Commercial

1,210,400

GROSS POTENTIAL RENTAL INCOME

Less Vacancy Loss

20.0%

EFFECTIVE GROSS INCOME

OPERATING EXPENSES PER SQ . FT. PER UNIT Taxes (We expect the property to be tax exempt) Insurance $0.90 389 Utilities $2.50 1080 Maint. Reserves $0.66 200 Property Management $0.40 173 Repair & Maintenance $0.85 258 Marketing & Advertising $0.20 61 G&A $0.25 76 Payroll $3.50 1064 Total Expenses $9.26 3,301

242,080 968,320

77,760 216,000 40,000 34,560 51,680 12,160 15,200 212,800 660,160

NET OPERATING INCOME

308,160

DEBT SERVICE

281,019

$4 million at 6.5% interest, amortizing over 40 years.

CASH FLOW DEBT COVERAGE RATIO

27,141 1.10

SQUARE FEET 320 400 16,000 86,400

NOTES: THIS PRO FORMA ASSUMES A 120,000 SQUARE FOOT BUILDING (E.G. 12 FLOORS ON A 100 BY 100 SQUARE FOOT PLATFORM). ALSO ASSUMED IS A PURCHASE COST OF $2 MILLION AND RENOVATION COSTS OF $4 MILLION. A VERY CONSERVATIVE 20% VACANCY RATE IS ASSUMED. THE OPERATING EXPENSES INCLUDE STAFFING BY BOTH A DOORMAN AND DESK CLERK TWENTY-FOUR HOURS PER DAY, SEVEN DAYS PER WEEK. TWO TYPES OF UNITS ARE ASSUMED: A SMALL FURNISHED SRO UNIT AND A LARGER STUDIO APARTMENT TO ACCOMMODATE TENANTS IN A BETTER ECONOMIC POSITION. THE ACTUAL PROJECT MIGHT BE LARGER OR SMALLER, AND MIGHT INCLUDE EITHER ONLY ONE OR MORE THAN TWO TYPES OF UNITS.

Concept and Design: WinshipPhillips Photography: Hal Samples Hand Made Book Cover: Choca Loca Designs

CENTRAL DALLAS MINISTRIES CENTRAL DALLAS COMMUNITY DEVELOPMENT CORPORATION Building community one person at a time.