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Starting a Halfway House or Transitional Housing Facility

Starting a Halfway House or Transitional Housing Facility

By mbramble, Contributor
Published: March 9, 2016 Updated: April 11, 2016

Transitional housing provides people with a temporary place to live as they attempt to get back on their feet or make a major transition in their lives. Like any business, when you choose to start a transitional housing facility, you will need to thoroughly research your idea and create a solid business plan that addresses the legal and financial needs of the business.

Do Your Research

Assess your target audience and the services needed in your area. Popular resident audiences for transitional housing include former federal or local inmates, young mothers, at-risk teens, veterans, the homeless, people with disabilities, and substance abusers. If you are unsure about the needs in your community, your local social services department may be able to provide insight.

Learn about the specific population you plan to assist, including average age, the services they currently receive, and where they currently receive them. Some transitional housing facilities only offer housing, while others provide additional services like job support, counseling, and medical care.

In addition to identifying your resident audience, your business plan includes your business’ mission, goals, operations plan and projected financials.

Choose a Location 

Once you determine your audience, begin to research potential locations for the housing facility. Now this may be an extremely challenging step for a number of reasons. First are the questions about the physical building itself. Do you plan to lease or own the building? Will you need to build a new structure, or is there an existing facility that you have in mind? If you have your eye on an existing facility, will you need to renovate it? Additionally there are the intangible questions like, do you have buy in from your neighbors in the community?

The US Department of Health and Human Services (HHS) highlights key questions that you should ask yourself when determining which housing model is best for you and your residents, and offers the following advice no matter the type of housing or lease you choose, aim for residences near the following:

  • Public transportation

  • Potential places of employment

  • High schools and community colleges

  • Health care clinics and hospitals

Once you identify an ideal location, familiarize yourself with the housing regulations and zoning laws in the area.

Register Your Business and Get Licenses 

Typically, transitional housing facilities are registered as non-profit organizations, enabling eligibility for certain benefits including grants, government surplus, and tax exemptions.

You must obtain relevant business licenses and permits like any other business. Regulations vary by industry, state, and locality.

Assess Your Business Needs

Determine how many residents your facility can hold, keeping legal, funding, and safety restrictions in mind. Think about the staff you will need to keep your operations running. Assemble a development team, a group of professional consultants, service vendors and other non-profit organizations that collectively bring all of the skills, expertise, knowledge and experience to bear on the development and operation of the project.  Non-profit facilities will need to establish a board of directors and governing bylaws. 

Also consider the supplies and equipment you will need to not only run the business, but also to furnish the facility. If you receive donated goods, remember that provides guidance on the federal tax requirements for donated property. Consider your operating costs and determine how much rent, if any, you are going to charge residents.

Foster Community Ties

Know going into the process that it is common for a transitional housing facility to face opposition from potential neighbors. Talk with residents, local officials, and other business owners in the community about where you plan to operate, and solicit their support by explaining how your housing plan will benefit the community. For example, if your target audience is at-risk teens, you can explain how a transitional housing facility will provide a steady environment to combat homelessness, vandalism, and loitering.

Once you begin to gain traction in your community, begin to assemble a team of experts, including your local social services department, a realtor, and a lawyer, to help you move forward with your plans.

Additional Resources

Finance Your Business

About the Author:

Mariama Bramble