When freezing temperatures hit Washington State’s Tulalip reservation a few years ago, the leaders of the sovereign nation of Tulalip Tribes needed to find a way to protect their unhoused population from the extreme weather. At the time, Tulalip handed out motel vouchers. Looking back, community leaders realized that approach was only a Band-Aid, providing immediate shelter and little else; They lost track of residents after the ground had thawed.
This year, the nation turned to Pallet, a startup based in Everett, Wash., that builds villages of prefabricated, tiny homes offering private, secure shelter to unhoused people.
Tulalip’s Pallet village—20 heated shelters set up where a homeless encampment already existed—filled up quickly when it opened in February. Even when temperatures rose, residents could stay put as they worked to find places to live long term.
Rochelle Lubbers, interim CEO of the Tulalip Tribes government, says the privacy and semipermanence of Pallet’s tiny homes give village residents an opportunity to find their footing.
“When people feel safe and they have their dignity restored and they have food and shelter, they will also start reconnecting with their families and potentially going to treatment and turning their life around,” says Lubbers.
Across the U.S., elected officials and advocates are searching for answers to the problem of pervasive homelessness. On a single night in January 2022, more than 580,000 people in the U.S. were experiencing homelessness. Since 2017, more than 100 communities across 16 states have enlisted Pallet to provide temporary shelters for their unhoused populations, from Burlington, Vt., to Dallas, to Maui, Hawaii. The startup will assemble villages in London, Ontario—its first outside the U.S.—later this year.
“People have the dignity of their own space, with wraparound support services and care in a community-based model. That’s what people want,” says founder and CEO Amy King. “They want to stay with their communities. They want to work through that rehabilitative process together, but they also want to have their own space and feel safe in it.”
Donald Whitehead, executive director of the National Coalition for the Homeless, says the need for housing is so critical, “we need all sectors of society to be involved in the solution”—startups included.
Tiny homes for the unhoused
King, 43, started Pallet six years ago when she and her husband ran a construction company in Seattle that employed people who’d experienced the justice system, addiction, and homelessness. The workers taught King about the shortcomings of the group shelter system, like the lack of privacy and security to keep pets and belongings.
“We had people with lived experience telling us: ‘This is what’s missing.’ And so we really centered that voice of lived experience to understand what the solution was,” she says.
One solution is simple: a door that locks. Pallet units’ windows lock, too. The tiny homes, which can accommodate two to four people, also come with beds, electrical outlets, safety features like smoke detectors and fire extinguishers, and different heating and cooling configurations to adjust to the climate.
The shelters are made out of insulated composite walls and an aluminum frame and are portable so Pallet’s clients—local homelessness initiatives, government agencies, and nonprofits—can easily move them around as their needs change.
Pallet sells the tiny homes for $7,500 to $12,000 apiece. As part of its contracts, Pallet requires that clients provide residents with hygiene facilities like bathrooms and laundry, transportation to off-site services like medical care, safety measures, access to food, and social services.
King says that Pallet tries to address the root causes of homelessness.
“One-hundred percent of the time, there’s trauma involved and isolation involved,” she says. “So the solution to that is really embedded in relationship-building, and the interconnectivity of community. You can give services to a person all day long, but they’re not going to engage with them if they’re not ready for that interconnectivity of human relationships.”
Providing ‘psychological safety’
The unknowns of operating a community of people experiencing homelessness and concerns about substance abuse gave the Tulalip Tribes council pause, Lubbers says. But ultimately leaders enlisted Pallet because the company gave clear guidance on what services the residents needed. Pallet’s success in a nearby town also served as a vote of confidence.
Once the council approved the Pallet initiative, residents moved in three months later. Not everything went to plan. Some residents violated community guidelines against using drugs on the village grounds. And there were two near emergencies related to residents’ substance abuse and mental health. Lubbers says Tulalip is still learning from the experience, and adjusting its approach, mainly by investing more in staff and training. The village will stay open year-round for this first year as leaders assess if it’s meeting its intended purpose of providing “psychological safety.” Lubbers says so far, it has.
For the first time in a long time, families know where their loved ones are staying. Since opening in February of this year, four people have entered in-patient treatment for addiction. One of those residents has begun working at the treatment center and was able to purchase a car. Residents are reengaging in simple acts like preparing their own meals.
“I realized there was no access to cooking for someone who loved cooking and became homeless. You lose access to lots of things you love, and things that make you safe,” Lubbers says.
Residents stay in Pallet’s tiny homes for an average of six months, ideally transferring to their own permanent housing thereafter.
Whitehead notes there are drawbacks to tiny homes as a homelessness solution, namely the expense, which can rival the cost of renting an apartment in some cities. But there are two big pros to tiny homes, Whitehead says: They provide people with safety and privacy.
“I’m not opposed to people being entrepreneurial if they are providing services for others who would not be able to provide it for themselves,” Whitehead says. The problem of homelessness is too big for nonprofits alone to fix, he notes.
Putting itself out of business
Pallet is a public benefit corporation (PBC), a designation that requires a company to consider its public mission—in addition to profits—in its decision-making. Pallet has raised $18.6 million in venture capital, mostly from social impact funds like Citi Impact Fund and DBL Partners that back for-profit companies moving the needle on societal issues. And last year it earned $18 million in revenue. In addition to its flagship business, Pallet runs a workforce development program for the 100 employees working at its headquarters, many of whom have experienced homelessness themselves.
King argues that the PBC business model is sustainable since it’s not dependent on donations.
“I also like that we can show that profit isn’t the enemy. Having profits allows you to have more impact in your community,” says King. However, Pallet is not yet profitable.
Now six years in, King wants to expand Pallet beyond serving chronically homeless people. She envisions more use cases for Pallet like working alongside the Federal Emergency Management Agency to assist those displaced by natural disasters. But still, eradicating homelessness is her top priority.
“If I could work myself out of a job, that would be amazing,” she says.
