City allows new residents at HomesNOW! tiny home camp after former president’s arrest

Bellingham’s planning department says it is allowing HomesNOW! to move forward with admitting new residents into its tiny home village for the homeless after police arrested the nonprofit’s former president for alleged embezzlement.

The planning department had previously barred the organization from allowing new residents until it updated its policies and procedures to prevent future misconduct, repopulated its board and the criminal investigation had ended.

Former HomesNOW! president and co-founder James Lee Peterson, 62, of Bellingham, was arrested Nov. 1 on suspicion of first-degree theft for allegedly embezzling more than $75,000 from the organization. Peterson was released from Whatcom County Jail Monday, Nov. 4, after paying $10,000 bail, according to jail records.

Current chairman and co-founder Doug Gustafson said he came to police with allegations of financial misconduct after noticing discrepancies with the nonprofit’s funds.

Bellingham police said the investigation is ongoing, and it’s unknown if further charges will be filed against any other HomesNOW! members, Bellingham Police Lt. Claudia Murphy told The Bellingham Herald.

Since the investigation started, three managing members have been removed from the nonprofit’s board and new policies are being put into place to prevent future misconduct, Gustafson said.

HomesNOW! is a nonprofit organization that operates a tiny home encampment for the homeless, called Unity Village, in the city-owned parking lot at 210 McKenzie Ave., near the Post Point Water Treatment Plant. The tiny home encampment, which can house up to 28 people, is permitted to operate at its current location through April 2020.

The encampments were allowed under rules the City Council adopted in October 2018. Tiny home encampments are permitted to operate for up to two years at a specific location, according to Rick Sepler, Planning and Community Development Director for Bellingham.

In an email to The Herald, Sepler said the temporary shelter permit remains valid and its use can be fulfilled. Sepler said there are currently 14 residents and five vacant tiny homes.

While HomesNOW! can admit new residents until Unity Village is at capacity, Sepler said any discussions or requests, such as future locations, are on hold until HomesNOW! gets an administrative permit issue in compliance.

HomesNOW!’s temporary encampment permit provides several conditions that must be met in order for it to remain operational.

Sepler said the organization had previous outstanding permit issues, but most have been brought into compliance.

The final item that remains out of compliance is having someone with demonstrated expertise in serving the unsheltered population available to assist with housing, program, services and placement for residents. Sepler said the city is actively working with HomesNOW! to get a person or people on board who can help with case management and advocacy.

“We are trying to ensure continuity of services to the residents — the encampment is meant to be more than just basic shelter,” Sepler said. “As we understand it, there is a transition going on now (the current individual with expertise is curtailing her involvement). The city’s interest is meeting the requirement of the permit and ensuring that HomesNOW! focuses on finding qualified individuals who can connect the residents with services.”

Gustafson said he’s working with the Opportunity Council and the Whatcom County Health Department to identify a dedicated case worker to work with HomesNOW!. Gustafson also said the nonprofit is holding interviews later this week for the five vacant tiny homes and expects to have them occupied soon.

Seventeen of 22 tiny homes are occupied at HomesNOW!’s Unity Village in the Fairhaven area of Bellingham, Wash., Tuesday, Oct. 1, 2019. Bellingham Police are investigating allegations that specific managing members of HomesNOW! misappropriated funds. Lacey Young The Bellingham Herald

Sepler said that the city has been approached by other individuals or groups interested in establishing a tiny home site, but that the effort and logistics required often “tempers their interest.”

“The City hopes that (HomesNOW!) is able to make good on its commitment to find housing for the residents of Unity Village. Tiny home encampments like Unity Village are only a temporary measure and are not intended to provide long-term housing,” Sepler said.

Gustafson said the nonprofit has a 30% rehousing rate — helping residents in the temporary encampment get into permanent housing.

The residents at Unity Village said that while the allegations of embezzlement hurt them all deeply, the tiny home model works for pulling people out of homelessness.

“Operations continue to run smoothly and we’re ready to do more, and we’re excited about where the future’s going for HomesNOW!,” Gustafson said.

Reporter Denver Pratt joined The Bellingham Herald in 2017 and covers courts and criminal and social justice. She has worked in Montana, Florida and Virginia.