How and Why Rick Steves is Using his Retirement Nest Egg to House Homeless Mothers & their Children
The Roots of this Project
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In my early travels — my "Europe through the gutter days" — my main challenge each day was finding a safe and affordable place to sleep. While traveling in Central America, I learned about how a rich country's policies (in this case, my country's) can cause landlessness (which means homelessness and hunger) in an underdeveloped country. This creation of a landless peasantry — at the mercy of an aggressive landowning class — reminded me of European feudalism. To think that the structural poverty that characterized those "dark ages" existed in our affluent and modern world was a shock to me. Then, after reading progressive books on hunger and homelessness (like Francis Moore Lappe's "Food First," Noam Chomsky's "Manufacturing Consent," and Arthur Simon's "Bread for the World"), I saw how structural poverty was an almost invisible but very real by-product of American capitalism, both within our country and abroad.
In about 1990, I had brainstorming sessions with my pastor on ways to house our local homeless. I came to believe that this is a real problem that the vast majority of people in our community choose not to see. To me, the problem had urgency and I wanted to do something about it. The next month, a ratty duplex adjacent to our church came up for sale. I had enough money to buy it ($80,000), and with the help of our church (Trinity Lutheran in Lynnwood) congregation to help maintain it, we offered it to Pathways for Women, a local non-profit that works with the YWCA to house local homeless moms and their kids.
Over the next decade, the duplex's three sisters on the same street went up for sale — each at an opportune time for me — and by the mid-1990s I had eight units in four duplexes in use housing homeless single mothers and their children. Eventually the buildings developed a mold problem and became uninhabitable. In 2002, we realized to ever have these buildings usable again; we'd need to invest lots of money in a clean up.
But to me, this was actually good mold. God was in that mold. After much thought the right move became clear. I'd tear down the duplexes and replace them with four-plexes, doubling the people I could house and creating a little community I'd call Trinity Way.
Trinity Way: a Pathways/YWCA/Rotary Club/Steves Collaboration
Until now this project was simply me offering the use of the duplexes to Pathways. This new vision was to solely finance 16 new units, deal with zone changes, plan thoughtfully, and oversee the construction. While I am providing the land and all the cash for the project (up to our $1 million ceiling for the four 4-plexes), our partners were providing substantial and essential services, without which, Trinity Way could never happen. The Rotary club joined in to motor the project to completion with their many talented members (architecture, project management, city relations, landscaping, furnishing, and so on). I would promise the free use of our buildings for 15 years. The Rotary Club would contribute various services as needed over the years. And Pathways/YWCA would manage the project with an obligation use the buildings to the absolute maximum capacity.
Defeated by Modern Building Codes
My hope was to build Trinity Way for my $1 million budget. I demolished the old duplexes, hired an architect, contracted with a builder, and barreled ahead with my vision. Slowly it became clear, modern American building codes simply do not allow for basic utilitarian construction to provide safe and comfortable yet sparse temporary housing for homeless people. The buildings, the land…even the sidewalks needed "contour" so they would look nice. Landscaping requirements chipped away at play zones. Financial setback after setback drove the price up until a $200,000 drainage requirement drove the building price to $1.6 million — well beyond the combined budgets — and finally sealed the fate of the project. It was no longer a wise use of my limited capital.
A New Direction: Renovate an Existing Apartment "Trinity Place"
Rather than invest $1.6 million plus the land for 16 new units, I decided to look for existing apartment buildings (which would enable me to buy into the standards of an age with simpler codes). Trinity Way became Trinity Place. I located a 24-unit complex for the same amount of money (and that came with land to boot). Back on track, my vision — born in El Salvador, and matured with a long march through church meetings, mold, and suburban Seattle zoning codes — was finally within reach.
The location of Trinity Place couldn't be handier for people in transition (good access to public transit, groceries, Edmonds Community College, church). Purchasing the apartment in April, 2005, my partners (Pathways, the YWCA, and the Rotary Club) renovated the units and we're housing single mothers and their children by Thanksgiving, 2005.
Why Homelessness? Why Pathways?
As a man (in a male-dominated world), I take partial responsibility for the plight of women abandoned by their husbands to raise children alone. Pathways (which joined forces with the YWCA a few years ago) works very effectively in my community with exactly that problem as its focus. For me, Pathways/YWCA is not a charity. It's a service. I pay them to translate my excess productivity into fighting this problem. Since I've already consumed all I really need, this gives me the treat of vicarious consumption. It's a fun way to consume beyond my capacity.
Single moms have so many cards stacked against them and society almost seems to blame them. I have an affinity for these women because I have friends and relatives who have been in this overwhelming and very discouraging me-and-my-kids-against-the-world situation.
I think the issue of homelessness strikes a chord with me, in part, because of my travels. For years, as a teenage vagabond slumming around Europe not knowing where'd I'd sleep tonight — sleeping in train stations, or sacked-out, frightened, in city parks — allows me to relate to being cold, wet and lonely through the night. While this was a perspective-altering experience, I had no kids to care for and a plane ticket home. I can't imagine the weight of having no money, no roof over my head, no job, and small children to care for.
Mixing Motivations: as a Christian and as a Businessman
As a businessman, I feel it's a responsibility to make a real commitment to my community. And, it's my hope that a project like this — utilizing a local agency like Pathways/YWCA as a service more than a charity — will inspire business people to think creatively about making a real difference this way. In a time with greater human need and lesser return on conventional investments, simply redefining "returns" suddenly makes this a smart use of capital.
As a Christian, I believe in tithing. And as a Christian businessman, I think a business can have this kind of giving as a goal too. A business has a lot of potential for good in its community. In my creative charitable initiatives, I hope to inspire other business people to do more than canned food drives. I was inspired this way back in the early 1980s when I met with a group of local business people who were supporters of Seattle's World Concern (a relief agency working for caring Seattleites in the developing world). I hope Trinity Place inspires other individuals, businesses, and charitable organizations to creatively use their capital (even if on a smaller scale) to buy simple existing housing to equip non-profits to help our homeless.
We Can Make a Choice: A Thousand Points of Light or an Enlightened Society
As an American and a liberal, I'm tired of hearing people say "there's not enough money." With any honest assessment, there is enough money. In fact, there is more money than ever. But we as a society have different priorities. As a Democrat, I believe providing affordable housing (like health care and education) is a responsibility of society in general — implemented efficiently by government. But I'm willing for now to be proceeding in the "thousand points of light" and "faith-based" Republican style which prefers to let the people who really care handle the problem apart from government involvement. But I do this under protest. I believe this can and should be performed most fairly and efficiently with governmental initiative by society as a whole. In short, an enlightened society brightens its world in unison and doesn't need a thousand points of light.
A Political Backdrop…Driven by "Class Warfare"
I believe our current government is motivated primarily by the greed of its corporate and wealthy patrons. President Bush's passions need to be understood in economic terms — how each initiative enriches the groups whose financial support put him and his party in power. Military expenses (about 50 percent of our governments discretionary budget and as much as the rest of the world combined) enriches Americans who make and sell arms. Privatization of social security pumps more money into Wall Street. Prescription benefits drives up the deficit (which future tax payers will have to pay) in order to enrich the pharmaceuticals. Our "war on terror" allows us to secure oil and gas interests in West Asia and the Middle East. ("Freedom" for Afghanistan means huge new military bases protecting a vital new gas pipeline through that country — which almost no one sees as taxpayer-subsidized corporate welfare.) Tax cuts for the wealthy and various forms of corporate welfare make it urgent that we squeeze "discretionary domestic" budget items (which is a kind of warfare on the poor both in America and abroad). All the domestic squeezing in the name of fiscal discipline saves around $60 billion. This is a paltry number compared to the hidden windfall each category above brings to corporations and the wealthy. The last thing a wealthy person like me needs is a huge tax cut. You'd be surprised (and probably outraged) if you know how much money I have saved as President Bush has cut my taxes in order to squeeze our poor and inflate our deficit.
Global needs trumped by local homelessness
For me proximity has nothing to do with suffering and need. I believe that if $1,000 helps more people in a distant land than here in the USA, investing it abroad is better stewardship of that charitable resource. That can be a tough sell in America. And many believe in "keeping it local" and helping the person across the street rather than across the ocean. You can't jam a world perspective into the minds of people who have not traveled. And people who've not traveled are often actually put off by a global concern that has no local concern element to it.
In investing my retirement funds in Trinity Place, I know that same money could help more people in a developing nation. While over the last 20 years I've enjoyed many creative charitable ventures for hungry and homeless people oversees, now I want to balance that with this local initiative. Now that Trinity Place is up and running, I can focus vigorously on more distant concerns knowing that I'm balanced with a strong and local project. I hope this will help people be more open to my global perspective on human needs.
The Financial Arrangement Between the Steves and Pathways/YWCA
I provide and own the apartment complex. Pathways and the Rotary club see that the units are renovated and fit to house clients of Pathways/YWCA. Pathways/YWCA will manage the project in a way where I have no risk, no expense, and no income for 15 years. During this time, Pathways will charge a small rent to its clients who stay in Trinity Place in order to have a budget covering taxes, insurance, utilities, and general maintenance. I own the buildings and have the option to take them back for my own non-charitable use after 15 years, with one-year notice. In 10 years, I turn 65 and will have access to the buildings for my retirement if I choose.
Are you not just enabling people to live off charity?
The "give a man a fishwich and he's fed for a day or give him a net and teach him to fish and he's fed for a lifetime" thinking is pure wisdom to me. So when I support something, I want to do it in a way that empowers people to become self-sufficient. Providing a resource for Pathways for Women/YWCA to house homeless moms and their kids empowers Pathways to do the important work they are so good at: helping these single mothers get back on track and build lives in which they can raise their children with dignity. I meet people routinely here in Edmonds who came upon tough times, were supported by Pathways, and are now happy and well-settled members of our community again. I wish these success stories made headlines.
Smart Investing — From "Europe on $5 a day" to "Dignity on $3 a day."
From a practical point of view, this "investment" is ideal for anyone who can enjoy the "vicarious" consumption of a homeless person getting a safe and comfortable place to sleep. Think of my rewards. Put a $1.4 million in a CD and you earn maybe $80,000 in taxable interest (which would be about $50,000 after taxes). With this investment, my taxable income is zero. But I know that I am providing 24 moms and probably 46 children a home. That's housing for about 70 people at a cost to me of $800 a year (less than $3 a day) each. In my work of finding budget travel places to eat and sleep, this is a real turn-on. So, that's my selfish little pleasure: I stow my money in a safe place and as a return, rather than taxable income, I know I'm housing all these people. What would I do consuming an extra $50,000 a year? How much joy would that car, condo at Whistler, yacht, or whatever bring me? About one percent of the joy that the 70 people I'm helping (indirectly through the work of Pathways/YWCA). That's my kind of investment. And, by partnering with hard working charities whose passions are the same as yours, you don't need a million dollars to get these royal returns. This isn't altruism, it's just awake.
The Same Vision on a Smaller Scale (with $200,000 to "invest")
On a smaller scale, an affordable housing investor could invest $200,000 in a simple duplex; let their church or local homeless organization use the property. Rather than $14,000 in taxable interest (about $9,000 after tax annually), you're housing two families — six people. Real people being housed by you for $1,500 a year or $5 a day each…what a wonderful kind of passive income.