GRAND RAPIDS, Mich. (WOOD) — Too much money to qualify for low-income programs, but not enough to afford how high rents have become in certain West Michigan cities. It’s a reality for a growing number of families who fall through the cracks of a booming housing market.
A program that started nine years ago in Grand Rapids to help these families is now gaining traction nationwide.
Cheryl Schuch, executive director of Family Promise of Grand Rapids, helped pioneer the Partners in Housing program in 2008.
“We have families who are spending more than 90 percent of their income on their housing. Most of us use a 30 percent threshold as affordable and balanced. So that shows you the disparity and the difference in our thinking about housing and the reality of what’s happening these days,” she explained.
She sees families come in where the parents — typically a single parent — are working full time, but they end up homeless because the landlord increases the rent and the numbers simply don’t add up.
Being poor can be expensive
A crisis can cut through a family’s savings account very quickly, as Schuch explained about the families she encounters.
“We often say it’s really expensive to be poor, and it’s even more expensive to become homeless. When you start sliding into that crisis, the cost of you [moving] into a hotel or not having a place to cook your meals or transportation to get to and from work or for daycare for your kids all start adding up”, said Schuch.
“You might have a little bit of money in the bank you have saved, but when you are trying to solve that problem by yourself, you blow through that savings account. You have nothing left by the end when you actually fall all the way into homelessness.”
That’s when she typically meets the families that come through the Family Promise’s intake center, where they find a place to get back on their feet.
Making old homes new again
The Partners in Housing program is the next step, once those families are through the crisis.
Family Promise works with Foremost Insurance to find older, manufactured homes that show potential for being rehabilitated and put back into use. Then a family with no place to stay can move in.
The family must pay the lot rent for the unit, which is typically $450. In nine months, the home becomes their property.
“Most people couldn’t imagine going from homeless to home ownership in a period of nine months. Once they own that home, there’s a different element that kicks in. It helps them build assets and that’s the one way families can actually move out of poverty,” Schuch explained.
Family Promise of Grand Rapids started by helping one family per year through the program, but now help at least 25 families each year.
This is made possible because of a decision West Michigan’s Edward Frey made 65 years ago to start Foremost Insurance.
“He came back from World War II, then Union Bank and Trust Company and now Chase, four mergers later, was one of the pioneers of financing of mobile homes,” said Edward Frey’s son, David Frey, who was on the board of the Frey Foundation for many years.
Banks didn’t use to offer loans for manufactured homes because insurance companies wouldn’t cover them.
“It was an opportunity for a niche company to facilitate the financing of mobile homes that increased ownership after the war, and therefore increased production of manufactured housing — so really a catalytic effect,” Edward Frey said.
Edward Frey could not have known that the effect would ripple down to Family Promise, making it possible for the Partners in Housing program to work.
Partners in the community
Foremost Insurance merged with Farmers Insurance in 2000, but is now an official partner with Family Promise for this program as the largest insurer of manufactured homes in the United States.
“It’s a great combination of being able to provide our professionalism and our skills to meet this significant need that’s out there. Family Promise reports that in the past few years, homelessness of school age children has risen by 300 percent. Our claims professionals are highly trained at understanding manufactured housing so we can identify good homes using our claims professionals and help Family Promise find these good homes and do some necessary repairs,” said Mike Kok, the chief operating officer at Farmers Insurance’s Specialty Division.
Company employees also donate their time, volunteering to help with the repairs on homes that will go to a family in need.
Although David Frey’s family is not directly involved with Family Promise, they have supported the organization in various ways, and through the Frey Foundation have given back to the community in immeasurable ways.
For him, the concept is simple.
“It’s the great joy of giving. I mean there’s no greater joy for most of us than being able to share your good fortune with others and make a difference in people’s lives,” Frey said.
Idea born in West Michigan spreads across the country
Calss Ehlers with Family Promise’s national office says the Grand Rapids affiliate identified the unique opportunity.
Foremost Insurance was already in West Michigan and has a bigger understanding of manufactured housing and what you can do with it.
These homes are generally a depreciating asset, he says, and could be worth nothing if they are run down.
It’s important to know which ones can be rehabbed, and that’s where Foremost Farmers Insurance comes into play.
“It allows the volunteer base to do a lot of the labor. Park owners also benefit because they have a detriment on the property that suddenly becomes a viable unit, which families then get to enjoy as an asset,” Ehlers explained.
He is so impressed with the program, he’s helping to expand it nationally with pilot programs in Gainesville, Florida, Colorado Springs, Colorado and Minneapolis, Minnesota.
“Different markets have different pressures, that’s why these pilot programs are so valuable. At the end of the year they can say, here is what works, here is what doesn’t — depending on your geographical location,” Ehlers said.