Everyone’s building tiny shelters, but there’s little evidence they’re effective
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This is a post by Kathy Vassilakos, Director of United Housing, and Maria Erb, United Housing Research Intern. It is adapted from their new report, The Social and Financial Cost of Non-Permanent Shelter Systems for Addressing Homelessness. For citations, see the full report.
Content to Do Something
Municipalities all over Canada are straining under the weight of a homelessness crisis that is decades in the making and largely the doing of upper levels of government.
Successive federal and provincial governments have played only a minor role in creating housing, relying heavily on market forces to drive housing starts and affordability.
The cessation of significant government funding for new community and social housing units, coupled with deregulation of the rental housing market, has resulted in an affordability crisis that begins with the most vulnerable renter households and ends far up the income scale at the middle class.
Visible homelessness and the number of individuals sleeping rough have grown since the pandemic. Single precipitating life events that in the past would have led to short-lived episodic homelessness are compounded by the effects of prolonged homelessness and result in a staggering number of people requiring intensive support to maintain stable housing.
Enter well-meaning activists, exhausted municipal social service staff, and an electorate content to do “something” as long as it doesn’t cost too much, give too much (for fear of enabling), or require anything to be built close to anything or anyone.
The result is a growing network of shelter systems that are promoted as temporary and transitional but are rapidly becoming an entrenched part of our homelessness and housing strategy. We are doing “something,” and it may feel good, but that should not cloud our ability to see these systems as evidence-free interventions, not workable long-term solutions.
In our new paper, we examine a specific part of the growing shelter system—tiny shelters— and challenge the notion that these are either a short- or long-term solution. Like food banks and emergency shelters before them, tiny shelter communities are now at risk of becoming permanent. They are supported by some activists and people with lived experience, but there is little evidence they are effective as transitional housing.
Why Tiny Shelters?
Our report focuses on 11 tiny shelter communities: nine in Ontario (Peterborough, Kitchener, Waterloo, Kingston, Chatham-Kent, Leeds-Grenville, Thunder Bay, London, and Hamilton), and two in Atlantic Canada (Fredericton and Saint John, New Brunswick).
In Kingston, Our Livable Solutions states that the shelters are eight by 12 feet, insulated and wired, have indoor and outdoor lights, a heater, an air exchanger, and a smoke/CO2 detector. A proposed Hamilton project has stated the following as requirements for their furnishings: electricity, Wi-Fi (if possible), not too close to neighbourhoods, a lock and key, couples and pets permitted, insulated, and eight by 10 feet. In Peterborough, a gated setting offers a bathroom unit (located outside the shelters themselves), 24/7 security guards, an indoor community space with a kitchenette, and laundry.
Municipalities use a range of terms for similar shelter models: Chatham-Kent refers to its shelters as “transitional cabins”; Sarnia and Hamilton use “tiny homes”; Thunder Bay, “temporary village”; Waterloo, “hybrid shelter”; Leeds, “supportive cabins”; Kingston, “sleeping cabins”; Kitchener, A Better Tent City (ABTC); and London, “micro-shelters.”
Euphemistic project titles may lead people to conclusions that are not evidence-informed and in some instances misleading. Tiny shelters may be shelters, but they are, by definition, not homes. The stated purpose of most tiny shelter projects is to serve as a transitional shelter and not permanent housing.
If one takes a narrow view of the capital costs of the shelter projects—averaging $55,650 per unit—they may seem like a cost-effective intervention. However, the annual operating costs—averaging $40,800 per unit—very quickly dwarf the initial capital outlay. Most of the tiny shelters are temporary in nature and have no long-term asset value for the municipalities.
The placement of these shelters is heavily influenced by the community. The public’s reaction to their proximity to schools, community centres, parks, and businesses confirms a negative bias towards these projects. One of the site requirements for the Hamilton tiny shelter project included “not too close to neighbourhoods.” The resulting site was on contaminated land not suitable for residential use. The original budget for their tiny shelter project called for $2.8 million in capital to support 80 people (two per shelter). That number ballooned to $7.9 million, $5.1 million over budget due in large part to remediation of contaminated land.
The Erbs Road Waterloo project is on the outskirts of the municipality. It sits before the first roundabout, just in front of the city’s waste management facilities. The recent announcement of a tiny shelter project in London further demonstrates the challenge of where to place them. South of Highway 401 in a farmer’s field is about as remote a location as can be identified for a city with a population of 420,000.
One cannot escape the fact that the choice of location for many of these projects, literally on contaminated brownfield land or at the physical margins of communities, reinforces the social marginalization and stigmatization of people who find themselves without stable and permanent housing.
For these shelters to be considered transitional, there must be regular turnover within these communities. Waterloo Region’s report on the effectiveness of their “hybrid shelter” program on Erbs Road stated that these are equivalent to traditional emergency shelter beds in terms of outcomes: “These outcomes are comparable with the averages across the emergency shelter system for this same period.” The Waterloo project reported that 19 people (out of 50 units) transitioned to supportive housing in 2024. ABTC has had recent reports of overcrowding due to a lack of turnover.
Why Not Housing First?
In 2024, an estimated 81,515 Ontarians experienced known homelessness, a 25% increase from 2022. Chronic homelessness cases account for more than half of all known homelessness cases.1
Evidence shows that the longer someone experiences homelessness, the harder it is for them to be stably housed. Layered on top of the shortage of affordable housing is a growing need for supportive housing for people experiencing homelessness who have high acuity and require intensive support services to attain and retain housing. This type of housing requires social and medical services and depends on coordinated supports across multiple government ministries.
A good model to follow is the “one needs six” theory. To ensure a correct mix of housing to accommodate safe and supported transitions out of homelessness, for every one shelter bed added, there needs to be six permanent housing resources in place. This is to allow for one shelter transition or turnover to occur every 60 days.
Of the existing 27,138 spaces reported by service managers, 65.2% of chronic homelessness cases are in emergency shelters, 13% are in transitional housing, and 21.6% are in supportive housing. Currently in Ontario there is only one supportive housing space available for every 14 people experiencing homelessness.2
The longstanding shortage of affordable housing forces people to rely on shelter systems, tiny shelters, transitional housing programs, and other interventions longer than intended. When relied upon for more than short periods of time, these interventions have negative impacts that accumulate and compound over time.
Housing First, which prioritizes permanent housing, is the only evidence-based strategy shown to break the cycle of chronic homelessness. Housing in this case is not inclusive of shelters, transitional housing, or tiny shelter villages. Housing is inclusive of private market rentals or social housing, with participants having immediate access to their homes and a rent subsidy ensuring no more than 30% of their income is spent on housing. This model includes wrap-around services that provide the support needed to remain stably housed. Housing alone is not sufficient, but it is necessary from the beginning for the success of the model.
Meta-analyses of permanent supportive housing, income support interventions, and Housing First demonstrate strong evidence that they improve housing stability and prevention of homelessness.
The two-year pilot project The Canadian Model for Housing and Support for Veterans Experiencing Homelessness in 2012 employed a Housing First approach and provided staff or volunteer resources to each participant. The program revealed promising results of an estimated $536,000 per year (in terms of cost savings) due to reductions in 911 calls and emergency shelter drop-ins.
A two-year Canadian study comparing a Housing First (HF) strategy to Treatment as Usual reported that, for chronically homeless individuals who are in the 10% highest cost category, “every $10 invested in supportive housing can generate up to $21.72 in cost savings,” and “On average … every $10 invested in HF services resulted in an average savings of $9.60 for high needs … participants and $3.42 for moderate needs … participants.”
A partnership between the University Health Network (UHN) of Toronto, the City of Toronto, and United Way Greater Toronto created Dunn House—Canada’s first Social Medicine Housing Initiative. Containing 51 units, Dunn House provides homes for the UHN’s most medically and socially complex patients. The project provides wraparound services and focuses on individuals exiting homelessness.
Early data coming out of the Dunn House project clearly demonstrates the advantage of providing housing and wrap-around services both in terms of financial savings and individual outcomes for people who were previously unhoused. A total of $1.66 million in healthcare savings over the first year coupled with improved health outcomes and housing stability for the 48 residents of Dunn House is just one example of how permanent supportive housing holds the key to addressing the crisis of chronic homelessness.
What Do We Really Want to Accomplish?
We are not advocating for the elimination of existing emergency shelter spaces, and we are not asserting that these interventions are without value. We are in a crisis with the need “right now” for interventions that reduce harm. There will also continue to be the need for emergency shelter spaces for special populations requiring a higher level of safety including women escaping intimate partner violence and homeless youth. What is alarming is that these tiny shelter projects are proliferating despite a lack of evidence they act as effective transitional housing.
There is a long-term risk in the continued expansion of emergency temporary shelter spaces. Diversion of funding from permanent supportive housing and community housing will have a long-term impact on our ability to address homelessness. Adding tiny shelter beds without an accompanying commitment to significantly increasing permanent housing pushes the system further into deficit.
What do we, as investors in our community, really want to accomplish? Do we want quick solutions that will cause our community more harm in the future, or do we want long-term investments that create stable, safe, and supported homes for generations to come?
In Perth-Huron, permanent supportive housing is needed; shelters are not. Rather than putting money into emergency shelters and tiny shelters—although undeniably the quickest way to do something—this money should be invested in permanent housing, including a strong focus on supportive housing.
It is not only the most cost-effective strategy, but also the only proven strategy. Moreover, it is the most compassionate thing to do.
For more information, read the full report: The Social and Financial Cost of Non-Permanent Shelter Systems for Addressing Homelessness.
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Citations:
- Donaldson, J., Wang, D., Escamilla, C., & Turner, A. (2025). Municipalities under pressure: The human and financial cost of Ontario’s homelessness crisis. HelpSeeker.
- Donaldson, J., Wang, D., Escamilla, C., & Turner, A. (2025). Municipalities under pressure: The human and financial cost of Ontario’s homelessness crisis. HelpSeeker.