“People who live in these buildings cannot pay what is required,” Graf says. “You have to find long-term rental subsidies, and that is a huge problem. It is becoming riskier and riskier.”
Even when developers or support agencies get the money, it can be hard to keep it. Developers say that the government subsidies that used to last 20 years are dropping in longevity. Some now even require renewal each year.
“It is not something you make money at,” Graf adds. “If SROs were our entire portfolio, we wouldn’t survive.”
LABOR OF LOVE Building SROs requires developers to think far beyond move-in day. There’s 24/7 security to consider—not to mention the needs of residents 10 or even 20 years out. “The hardest part isn’t the building, which is still a challenge,” says Paul Cummings, senior vice president of Enterprise Community Investments in Columbia, Md., a for-profit company that finances SRO housing. “The hardest part is: Can you service that population? How do you bring services to that tenant every day for at least 15 years?”
The short answer is money. But raising money for housing the chronically homeless is a daunting task, say developers and homeless advocates. “There is a recognition that it is hard to acquire money that is going to have long-term implementation,” says Cummings. “To help that individual, you need 20 years of subsidy—and that is a tough sell.”
Add to that a far more tightfisted climate overall for wooing donors. “Fundraising has become even harder when we are competing with causes like Sept. 11 and Hurricane Katrina victims,” Mercy’s Sister Murphy says. “But the funding sources need to get better.”
Those long-term hurdles come on top of what’s needed to operate SROs every day. “You have to do 24-hour management to make sure people are safe,” Graf says. “Often the SROs are located in less-than-stellar neighborhoods so security is often a problem. Those are just some of the challenges of management.”
Holler, of Mercy Housing Lakefront, asserts that a key to Mercy’s success in Chicago is integrating SROs into higher-end housing. Integrated neighborhoods help SRO residents feel like a productive part of society, she says. But mixing housing types also requires that SRO buildings have strict management.
“You must have lots of rules, because you are dealing with a population that needs guidance,” she says. “We have strict visitation policies, 24-hour desk clerks, and units designed to be inside and not outside.”
The final key to SRO development is passion. SRO developer have that in excess and say the drive to help a population that can’t help themselves is what keeps them going through the money shortages and management hassles.
“This kind of housing development is not for the faint of heart,” Mercy’s Graf says. “It is the hardest stuff we do. It is also probably the most rewarding.”
Erin Massey is a freelance writer in San Marcos, Calif.