Giving Circles Portfolio

By: Hannah Kim

Another great piece of feedback received after presenting the Homeless Sponsorship idea to the Tri-Cities Homelessness Task Group on July 10, 2009 revolved around expanding the portfolio of giving circle solutions.

A concerned citizen advocate suggested applying the giving circle model to simply subsidize homeless clients’ rent for 6 – 12 months. Whereas our original model centred on rounding up investors to purchase housing units, we would first find existing empty spaces available for rent. Then, members of the suggested variant of the giving circle would each contribute about $100 per month to subsidize rent payment of the 2 – 3 homeless clients per housing unit. In essence, the giving circle would be purely donation-based in covering the rent requirement above the monthly $375 social assistance housing allowance that each homeless client receives. For instance, two homeless clients would be able to collectively pay $750 per month for an apartment suite that requires $1,200 in rent; a donation-based giving circle consisting of five members would then contribute $450 per month (=$90/month per member) to make up the difference for 6 – 12 months.

I’d like to note that another way of expanding the portfolio of our novel solutions is to implement giving circles with differing degrees of involvement in interacting with the homeless clients. On the one extreme, giving circle members would be completely hands-off and only supply funding (whether that funding is a down payment for purchasing property or subsidizing rent). On the other extreme, giving circle members would participate in some of the support services for homeless clients, such as providing companionship and mentorship.

Watch for further posts that detail further development of these ideas!

A Real Estate Agent’s Perspective

By: Jackie Go

This week I met with a real estate agent from Coquitlam who has been working in the real estate industry for over 20 years. I presented our homeless sponsorship idea to him and asked him for his feedback from a realtor’s perspective. We had a lengthy discussion about the real estate industry and I would like to share some of the key concepts he wanted to contribute to our idea.

• Foreclosures – this represents a great opportunity to obtain cheaper property. With the economic downturn, the number of foreclosures is increasing, and these are properties which can be bought very cheap. We will be looking for foreclosures that we can buy cheaply for the investment giving circle, or that need repairs. If the property needs repairs, we can ask local businesses and volunteers to donate their services (painting, renovations, etc.) in order to add value to the property in that way.
• Land – he emphasized heavily that in the real estate industry, this is what has value and continues to appreciate, despite decreasing prices for buildings.
• Economic Feasibility – he emphasized that housing each homeless client in a separate unit would be very costly. In comparison, if we were to buy a unit with 3 bedrooms and house 3 clients there, the costs per person go down a lot. Furthermore, he pointed out that the homeless clients that we are trying to help have low barriers and we can look at helping those who are capable of living with companions. From talking with a homeless person myself, Sally (pseudonym from Hannah’s “Eye-opener” post) she mentioned how hard it is to get out of homelessness due to the fact that the client is essentially leaving their entire life behind, including their circle of friends. Therefore living together with 1 or 2 other people going through the same thing can help the client form a community of support in order to successfully get out of homelessness.
• Rental Units – he emphasized the difficulty of getting a landlord to rent to a homeless person. Potential renters have to fill out forms asking questions such as their previous address, their current job and other similar information which would be difficult for a homeless person to provide. Essentially renting to a homeless person would be more risky for the landlord compared to other tenants who have a job and a previous address. However, as we will discuss in other posts, we don’t want to rule out the rental model for funding the housing because this would require a lower investment from donors compared to the model which buys the property in order to generate a property investment. We will keep in contact with the realtor to see if we can find a landlord who would be willing to rent to a homeless person, or if we can find other people who may have empty basement suites. Please let us know if you might know of a philanthropic landlord or property owner who would be interested in helping the homeless, while also getting a steady flow of rent.

Legal Issues Regarding Property Rental In BC

by: Ryan Chahl

Our social innovation needs to consider different funding options. Our first option is to approach the church or community organization and ask them to fund the housing unit. The second option is to consider a property management scheme, where we would look for investors who would pool their money in order to purchase a piece of property together.  The investors would be able to have a safe investment in the form of the appreciating property as well as the $375 per month for each client who stays at the place as this is the amount of government assistance that is available for housing for one person.

Here is an overview of some legal issues we might encounter.

The length of time we rent a unit for can be any amount of time, this is decided upon in the contract.

The usual standard for this is the tenant takes a years lease of the property and once this is complete they can either re-new the contract or move to a month to month basis. The issue we will have with this is the fact the rent is for one year, for our purpose it would be a lot safer if we could go from month to month right from the start. Most landlords would not agree to a contract that give the tenants so much power but as we are a non profit organization trying to help people we may be able to find someone who is willing to do this as a gesture of good will.

Can we can terminate the rental agreement without a penalty?

The answer to this is almost always no unless the lease is up. The best way to resolve this is to push for the month to month rental agreement so we are not tied down to the property for a long period of time. If we can’t find anyone who is willing to do this type of rental agreement we will have to try and put a clause in the contract that allows us to terminate the contract after a period of time we are comfortable with. Once again this is not normally done but we will be trying to use our non profit organization to gain support.

How much will our rent be?

This is going to be one of the biggest challenges we will face. Rental prices are lower in the tri-cities are compared to many other places in Grater Vancouver but this does not mean they are cheap. We will be trying to find a landlord who is willing to rent at a very low cost and we believe the best way to do this is by searching for people at church venues where people are open to helping people who are less fortunate than themselves.