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Tips for Finding More-Affordable Housing

***EDIT: Some of this advice may seem like wishful thinking, because in some ways it is.  But acting purposefully in certain ways, even if wishful, has been known to make others respond in kind. ***

When I had five-figure consumer debt, I tried to find a place to live in San Francisco that would allow me to get rid of that debt in a year. Are you laughing? Because it is laughable unless you have a six-figure salary. Most Bay Area residents do not earn six figures. Yet most housing in the area is unaffordable to the lower-income masses. It makes no sense — unless you’re a greedy property owner sitting on a vacancy until finding a six-figure-income-earning tenant. (A single person earning $100k a year can comfortably afford $2,500 – $2,750 in housing expenses.)

There will be competition no matter what, no thanks to the lack of new housing construction. But there are actions one can take to increase chances for finding housing that don’t involve signing up for a lottery or waiting list.

Tip 1: Save Your Cash

Saving cash is especially important if your credit score is less than Good. How much should you save? Some places require one month’s rent as a security deposit plus the first month’s rent, though it’s better to have at least two months of security plus rent in the bank. But if your credit is Poor to Fair, you might need more cash. Try to save at least six months of rent; even better if you can save a year’s worth that can be paid in lump to a landlord. This cash may be the factor that beats the competition.

Saving cash is much easier if you aren’t already paying an arm and a leg for housing, maybe living in your vehicle, on the street, or on someone else’s couch. If you’re already cost-burdened by housing, consider getting a roommate. I Airbnb’d an inflatable mattress in my living room for $40 a night. My building’s management knew I was in financial trouble, and they let me get away with it for a little while. But maybe your landlord will let you use Airbnb if you remain transparent about how much money you make. (Full disclosure: that link refers you via my personal Airbnb account, and if you sign up through it, I get $300 Airbnb credit. Hey, I don’t have a salary.) Make sure to check your lease for restrictions and amend it if necessary.

At the least, make changes to your spending or lifestyle. If you drink alcohol, stop and put that drink money into a savings account. Find something else to do. I found a Scrabble game at the thrift store for $3 to occupy time with friends in lieu of going to a bar. Olympic figure skater Adam Rippon has a saving trick: use shopping desires to move money into savings.

Tip 2: Improve Credit-worthiness

Even someone with a perfect credit score can have trouble finding affordable housing, but if your FICO score is below 600, you’re in real trouble. Unfortunately, paying rent every month isn’t going to raise it. Unless you have a mortgage or other qualifying loan from a financial institution, the only way to raise your score is to have, use, and regularly pay off a credit card.

I have a credit card for exactly that purpose. I use it to pay my phone bill, an expense already in my budget. I have another credit card for emergencies, which is used rarely, and if it is used it’s paid on time every month. The key to raising a score with a credit card is to ensure payments of more than the minimum are made on time every billing period. Do not just make minimum payments, because if you use the card for other purchases, the account may appear as “revolving,” which is not good for your FICO score. Besides, you may end up paying more in interest than for the actual purchase.

Tip 3: Lobby for Decreased Rates

Many property management companies will accept tenants for market-rate units even though the rates are higher than 30% of tenants’ gross income. Many of San Francisco Housing Authority’s “affordable” units allow tenants to be cost-burdened having them pay 50% of income on rent. We need to demand rents to come down or demand legislation that makes them come down. San Francisco has such legislation in the works for a tax on vacant units. If you’re in San Francisco, tell your city supervisor to support the vacancy tax ballot; and then vote for it in November 2019. If you’re in another city, propose appropriate legislation to influence affordability for your jurisdiction. That might mean starting a petition to approve new housing construction, like multi-family buildings. As the market dictates, if there is more housing availability, the rates decrease. While we don’t have time to wait for rates to fall, we can do something.

Or just ask

You can also ask for a decrease in rent rate. Asking for a decreased rate on a unit that received a dozen applications probably isn’t going to work. But if a unit has been vacant for longer than a month, the owner may be asking too much rent for it. Let’s say your budget is $1,600. If a homeowner is asking $1,700, ask, “Would you take $1,600?” The worst that can happen is the homeowner says “No.”

A neuroscience study by Reuter et al. (2011) found that 72% of the study’s participants had a genetic predisposition for altruism. If most homeowners are altruistic, then some might accept less for rent.

Negotiation can help. It may help the owner to know if you have home repair skills, if you’re a neat freak, or if you’re industrious and will help keep the grounds clean. An example of a home repair skill is changing the stopper in a toilet tank. A good stopper costs about $6. Calling a plumber to fix a leaking toilet tank costs at least $200. These days, you don’t even need tools to change it. I just changed one myself the other day without even turning the water off.

Tip 4: Use Humor

Homeowners whose vacancies you apply for or their agents will remember you better if you make them laugh. Researchers Curry & Dunbar (2013) found that shared humor increases altruism. Altruism not only has genetic markers, but it can also be influenced by neurotransmitters in the brain. Mirthful laughter reduces stress hormone levels and releases endorphins. Granted, a property owner or agent may not have the same humor as you, but different humor and new jokes can be learned. Get the owner or agent to laugh, and you may tap into that person’s altruism.

Tip 5: Increase Your Social Circle

If anyone in the Bay Area is able to find housing below market rate that’s not a share and not subsidized, there’s a good chance the lessee was previously known to the lessor. Care Association is working to increase these chances with our forthcoming Care For Us platform. But for now, build face-to-face connections with people, because someone knows someone who has a vacant unit.

Connecting with people face-to-face these days can be difficult. If you’re uncomfortable in social situations, you may be at a disadvantage, but building connections with others is still possible. You may need to find different ways to connect with people. Some ideas:

  • Spend time on Nextdoor.com if you can get an account, engage in conversations, and find opportunities to acquaint yourself with others.
  • Join a Meetup.com group and participate in meetings.
  • Volunteer for a charity.
  • Attend neighborhood events and offer your help.

Many homeowners prefer to not rent out their vacancies but prefer peace and quiet, and the feeling of privacy. Some homeowners simply don’t want just anyone to live with them. They want someone they like and respect, and who will leave willingly if they no longer want a tenant. If you meet a homeowner like this, you need to be willing to comply.

Related to increasing the number of people in your life, connect to people who can provide positive references. Positive references should indicate that you’re reliable and trustworthy. Make sure that these people you count as references are open to being contacted by potential leasing agents and homeowners. If finding references is difficult, then you’ve got work to do that might involve taking a sober look in the mirror. I’ve been there.

Tip 6: Find a Roommate

This follows increasing your social circle. As you get acquainted with more people, you might find that certain personality types are more compatible with you than others. Jungian personality typology can help with this. My personal favorite resource is Humanmetrics.com. The website appears Web 1.0, but the content can be useful if tried. Maybe a potential roommate is a homeowner with a spare room.

What if making connections to people is hard for you? Psychological researcher Abigail Marsh recommends learning to stop making yourself important to learn to have compassion. Compassion leads to acts of kindness. People notice acts of kindness. Acts of kindness draws people in and opens up opportunities for making connections.

Tip 7: Lower Your Expectations

The media is filled with luxury. Popular Instagram posts show mansions, designer goods, and everything else expensive. Celebrities popularize wealth. Yet less than 100 years ago, up to 20 families crowded into one 4-story New York City building just 25 feet wide and 100 feet deep. If five families lived on one floor, each family may have had roughly 450 square feet of space. Today, people with low income expect multiple bedrooms in more than 1,000 square feet for a single family. Privacy and having one’s own room has become so important that renters are willing to be cost-burdened, paying 50% or more of their income for housing.

Spending more than half of one’s income on housing will not improve life. If anything, it will perpetuate impoverishment. Look for housing that costs 30% to 33% of your gross income, including the cost of utilities. This may mean finding a room instead of an apartment. It may mean sharing a studio. It may mean moving away. If you’re fortunate, it may mean finding an altruistic landlord with a vacancy and taking it even if it’s not the perfect place.

Tip 8: Simplify Your Life (Go Tiny)

Many people who have downsized their belongings, keeping only what they need, or keeping only what sparks joy a la Marie Kondo, have found themselves feeling less anxious and more stable. Downsizing belongings thus enables requiring less space. Less space is less maintenance and lower cost. By downsizing, living expectations no longer require lowering; rather, they simply change.

Consider joining the tiny house movement, influenced by Sonoma County resident Jay Shafer, known by the tiny house community as the godfather of the movement. If a family of eight 100 years ago could share 450 square feet, then you can live in a tiny house, which ranges in size. Shafer’s house is 89 square feet, but they can be larger. In general, going tiny means moving out of a conventional house or apartment into much smaller spaces. Tiny houses on wheels tend to be no more than 360 square feet.

There are barriers to tiny house living, especially in the Bay Area. For one, they aren’t easy to find, and empty lots are expensive. Nor is it easy to find a place to park a tiny house on wheels and live in it legally. RV parking is limited in the Bay Area, but people have been able to occupy houses on wheels parked on RV pads. Maybe someone in your social circle knows someone with a driveway where one could park. Or maybe rent a tiny house on Airbnb, connect to the owner, and see if becoming a tenant is possible. When I managed an Airbnb listing, I got tired of the revolving door and settled with a roommate.

Municipalities vary in their support of tiny houses. Sonoma County planning department recognizes tiny houses as livable structures. And Marin County has a temporary waiver on the $1,500 permit fee for building separate accessory dwelling units and junior dwelling units inside the main house up to 500 square feet. Alternatively, 120-square-foot structures are allowed without a permit. David Smith in Marin builds attractive structures this small called Backyard Eichlers. His sheds have been installed in the backyards of both Marin and San Francisco counties. For those living with family, it’s not exactly moving out, but it can be an improvement.

The best part of tiny house living in my opinion is that the options are endless, especially for houses on wheels. They are only limited by lack of creativity. Maybe someone in your family has a spot in the yard or driveway. Or reach out to your social circle for leads. Search online for ideas, educate yourself, start dreaming, and get yourself a home.

Epilogue

I know that there are vacant apartments in San Francisco that have been empty for years. Care Association wants to reach out to their owners and encourage altruism that they may offer them for affordable rents. We are building the Care For Us website so that property owners can get acquainted with people looking for housing, and we hope they will make these vacant spaces available to users on the site. But we need to populate the site.

Participate in the demonstration phase of our Care For us project and build a biography page to tell your story. Then we will direct potential lessors to the site. To participate, fill out this form.

References:

Curry, O., & Dunbar, R. (2013). Sharing a joke: The effects of a similar sense of humor on affiliation and altruism. Evolution and Human Behavior,34(2), 125-129. doi:10.1016/j.evolhumbehav.2012.11.003

Reuter, M., Frenzel, C., Walter, N., Markett, S., & Montag, C. (2011). Investigating the genetic basis of altruism: The role of the comt val158met polymorphism. Social Cognitive and Affective Neuroscience,6(5), 662-668. doi:10.1093/scan/nsq083

Yim, J. (2016). Therapeutic benefits of laughter in mental health: A theoretical review. The Tohoku Journal of Experimental Medicine,239(3), 243-9. doi:10.1620/tjem.239.243

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What San Francisco’s Minimum Wage Can Afford for Housing

A full-time worker earning minimum wage in San Francisco can comfortably afford $780 a month in housing expenses based on the national standard of 30% gross income; housing expenses include rent and utilities. Yet, the city’s housing authority is calling a studio with a rent of $1,190 a month “affordable” for someone who earns only $2,380 a month. Fifty percent of income spent on rent is not affordable.

On July 1, 2018, San Francisco’s minimum wage rose to $15 an hour for all employees. In spite of the increase, a minimum wage worker is still unable to afford the cost to live in San Francisco where a tenant is lucky to find a studio for $1,300. This year, Seattle instituted a minimum wage of $16 for companies with more than 500 employees, such as Amazon. Unlike in San Francisco, a Seattle worker can find a studio for under $900 a month through the rental market. The real estate market in the Bay Area is simply unjust.

The Burden of Cost

San Francisco city authorities are encouraging a cycle of poverty by allowing a high cost burden on its residents.  If a worker earns $2,600 a month and pays $1,300 a month in rent (a home at this rate would probably be at least a 45-minute drive from work in the city), little is left for living. If the worker has a car, the below table might be his monthly budget.

Monthly Expenses
Rent $1,300
Electricity, Water, Gas 50
Phone 60
Taxes 420
Car payment 200
Gasoline 220
Insurance 75
Cash left for food and other expenses 275
Total $2,600

Nothing is left for savings in this scenario. Healthcare costs are not included. Also omitted is the cost of the San Francisco-Oakland Bay Bridge, which is $7 a day if a worker drives alone across the bay. This worker could save a few hundred dollars a month by using public transit but then he would lose travel time, not to mention a sense of freedom. Imagine that this worker has a child. Feeding two people well is not easy for less than $300 a month. Forget the additional time and expenses needed to take the child to and from daycare.

No one should pay more than 30%

Reducing rent from $1,300 to $750 frees $550 a month for a livable life.  It allows for a healthier diet. It allows the worker to relax and go to the movies or enjoy a dinner out.  The worker can put money into a savings account and save for his child’s future. More disposable income supports a stronger economy for local businesses and for the country.

Is San Francisco pressured by the real estate market to offer “low-income” housing at costs too high for its residents? California’s 1995 Costa-Hawkins Act makes matters worse by preventing local governments from mandating affordable units with every luxury project. Instead, the government is forced to subsidize to make up for market rates. Contractors charge a premium for construction fees adding to building costs. Meanwhile, a two-bedroom house in the Castro neighborhood has sat empty for more than a year, its owner and agent waiting for a renter to pay $5,000 a month for it.  Multiple households crowd themselves in shared apartments. Others sleep in their vehicles.

The San Francisco Examiner estimated that 142,000 workers in the city were to benefit from the wage hike last July. According to some workers, instead of helping, the raise resulted in cut hours.  Some earned less as a result, forcing them to find additional work to pay bills. For a city that offers no real affordable housing units, this is no solution.

Build $750 units

The only solution to the housing crisis is to provide housing units people can actually afford with a single full-time job.  This does not necessarily mean repealing Costa-Hawkins. But it does require using innovative strategies. McCormack Baron Salazar is a company based in St. Louis, Missouri, that has been doing just that.  Started as a consulting firm, then McCormack Baron & Associates found an opportunity to become a developer of low-income housing by pooling available resources including tax credits, government subsidies, and private funding. With over 22,000 homes built to-date, and over 68% of them for lower-income households, McCormack Baron Salazar proves that building affordable housing is possible and can be profitable. But it will take commitment and cooperation to make it happen in San Francisco.

Be the Change

In spite of the unjust nature of the real estate market and the slowness of building needed housing, property owners can make a difference.  Care Association wants to help.

If you own a home with vacant space, contact us by email or phone at 415-890-0011 to find out how you can help a low-income tenant.

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Affordable Housing May Be Next Door

Homelessness continues to affect us.
Developers continue to build houses that are too big and costly.
Affordable units continue to be in extraordinarily high demand.
New units take too much time and argument to build.

What can we do?

Make Connections

Many homeowners are willing to offer housing below-market to people they like. But many of these homeowners don’t know where to find them. Under federal law, homeowners with no more than four units on the property on which they reside may choose whoever they want to live there. By providing a platform on which homeowners can get to know prospective tenants, Care Association wants homeowners to be able to exercise their rights while helping a household that is unable to compete in a hyper-inflated market. Though a trouble-free landlord-tenant relationship is without guarantee, establishing dialogue can help both parties make better-informed decisions. The goal of the Care For Us platform is to make connections and facilitate this dialogue.

While Care Association is building the platform, we are reaching out to make connections for people in need. Currently, we are working on finding housing for E’Dreana Black and her son. Get to know E’Dreana on her Care For Us page. We are also raising funds for a security deposit.

Vacant Units Exist

The Anti-Eviction Mapping Project found that many-times more vacant residential units exist in San Francisco than do homeless households. Would these units remain vacant if their owners personally knew someone who needed a place to live? Sadly, there is little camaraderie between the Haves and Have-Nots, contradicting idyllic images of community that the Summer of Love presented. California real estate laws are absurdly in favor of the Haves. While rental laws provide some tenant protection, many homeowners avoid having tenants for fear of facing trouble with ones who reserve their right to stay. Until there is change, we need to find alternatives.

One alternative is to reach out to homeowners.

We Have to Start Somewhere

We are starting by working with one household, but the platform will be designed to multiply the effort.  And there will be more. Sign up to join the mailing list to stay informed.

Fundraising in Noe Valley

After the 1906 earthquake, San Francisco responded with emergency housing. Human needs have not changed. Affordable housing is possible today.

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The Care For Us Website

Care Association is developing an affordable housing technology solution, a platform to enable homeowners with vacant rooms or units to offer housing to lower-income tenants who tell their stories on the CareForUs.us site. We have found that many homeowners wish to help those in need of affordable housing yet don’t know where to find tenants who are suitable for them.

The Care For Us site will also enable donors to search for, choose, and give goods and services to individuals and charities in need. Goods provided through the program are items that assist individuals in achieving a U.S. standard of living or quality of life and nonprofits in procuring supplies and equipment for their charitable operations. Services may be educational, legal, financial, or health-related. Beneficiaries are verified by Care Association as “in need” based on financial criteria and knowledge of individuals and organizations.

When I first started this nonprofit, I was providing nonprofits with equipment and supplies. I was also providing pro bono emotional regulation care. The website idea came after talking with people about their hesitance getting rid of things that are meaningful to them. Knowing who benefits from donations gets lost when donating to thrift stores. How can we find recipients who would appreciate them? Others mentioned their desire to help people, but didn’t have a way to help without committing to a program. Care For Us would enable pro bono services directly to people in need. But I realized that lack of affordable housing is probably the cause of most low-income stress. If the Care For Us site can connect donors to beneficiaries, why not connect landlords to prospective tenants?

The Care For Us Demo

Today, the Care For Us demonstration website is under construction. We need a demo in order to raise funds, and to show that the Care For Us site will work. Results will enable us to effectively apply for grants. For this demo, I wanted at least five participants who needed affordable housing to be “users” and beneficiaries of the site. I put together an online form where prospective beneficiaries could upload photos and write their stories. I learned that few people are willing to allow someone else to choose housing for them, and that those who struggle with low income do not want to broadcast their needs. Our society looks down on people with low income, leading to shame and embarrassment. Only one out of ten people invited to become participants of the demo completed the form.

The demo site is meant to be a working prototype. So far, the participant who completed our form has a live page hosted at careforus.us. We have been reaching out to landlords and property managers and will soon place an ad to find the participant’s family a home.

Volunteers Are the Heart of Care Association

While we wait for more people to sign up for our demo, there is a lot of work to do. I have been building the demo site by typing out the html markup. It’s not super pretty, but it functions. One volunteer is working on our technology infrastructure with Salesforce at its center. Another volunteer has written an article to boost marketing. Soon we will look for a web architect to plan construction of the launch site. Since we were unable to raise enough funds to hire an engineer, I will be coordinating site construction with volunteers. We had an original beta launch date of January 2019, but it will be much later than that. I am also a volunteer, enabled by loved ones to carry on with this venture. This means 100% of funds received will go toward operations and housing assistance. Currently, we have a GoFundMe campaign to raise a security deposit to help our participant find a home.

Six months ago, when someone told me that nonprofits take a long time to make accomplishments, I thought that I would be the exception and be able to launch our project expeditiously. Now humbled with a fourth revision to our business plan, I still have hope to make this world a better place for some.

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Humble Beginnings for a Grand Plan

Building a business is difficult, but building a nonprofit has its own unique challenges.  For starters, nonprofits like ours don’t have anything to offer in return for revenue except a sense of goodwill.  Many nonprofits rely on donations to complete their missions.

To make things more difficult, our project is based on technology — the WWW.  The site needs to provide an easy-to-use interface, to be safe with its data secure, and to connect to secure third-party software for income verification.  And it needs to look good. Building a site that accomplishes what we want, provides the security its users need, and functions in a way that benefits and doesn’t frustrate is no small feat.  To accomplish this successfully, we need money, and a lot of it.  Unfortunately, relying on volunteers is neither efficient nor effective for a technology product that is not about technology.  The computer platform Ubuntu was built by volunteers but for computer purposes.

On September 1, we began fundraising so that we can hire developers to build the site.  We found a table for free on Craigslist and covered it with an old sheet with Sharpie-colored words, “Make Affordable Housing Happen Now.”  Since we are starting from nothing, we had to start somewhere.  At least a picture of our table gave us something interesting to post on our Instagram account (@careforus.us).

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Beginning Care Association

When this project first started, it was just me with an idea: create a networking site where people who needed things for a better quality of life could connect with people who had something to give.  Care For Us went on the drawing board.  Unfortunately, someone else in California had the name, another nonprofit that serves children with autism.  As opposed to supporting a silo of people who had differences from others, I wanted to create a nonprofit that could involve anyone in the United States.  With Bruce Wolfe as Treasurer and Cedric Bertelli as Secretary, and with the help of Larry Ross, CPA, we formed Care Association and applied for 501(c)(3) status, but kept the Care For Us name for the project.

When our status letter arrived in the mail, it came as a surprise having been months after the window of time in which the IRS said they would inform us of our status. By then, I had started graduate school thinking the project would never happen unless I funded it myself.  I needed to make money if I were to fund it, and there weren’t any jobs out there that interested me enough.  Someone at the Internal Revenue Service believed in what we want to do… or we just completed Form 1023 correctly, thanks to Mr. Ross.

More than a year after applying, our business plan is written, the organization’s website is up, and wireframes are in process.  Most important, our focus has changed to affordable housing.  While writing the business plan and looking for feedback, I realized that exchanging goods and services wasn’t on the forefront of people’s minds.  But many people, perhaps most in the San Francisco Bay Area have been struggling with the lack of affordable housing.  Even people with money that can afford the high prices are unhappy with the costs.

As with any business, building a nonprofit takes a lot of work.  But unlike for-profit businesses, we rely on donations to help us get started.  Having a business plan and applying for a loan isn’t really an option right now.  Our first project is the Care For Us site, and it won’t be providing revenues right away if at all.  Not only are we not for profit, we are also tech-related.  We don’t have a program with active volunteers going out and meeting people’s needs, but we do have a plan and a vision.  That vision includes bringing the nonprofit world to the frontier of technology.