Denver City Council Monday approved a $7 million contract to provide 200 homeless shelter pallets within the city. Pallets are expected to arrive in November, according to Denver’s senior homeless advisor.

The city stamped its contract with Pallet PBS Inc., which according to the resolution approving the contract, will last until Aug. 31, 2024 with an option to extend one year.

“The contract is up to $7 million,” city Senior Homeless Advisor Cole Chandler told the Finance and Governance committee on Aug. 22. “Our quote for these units is actually running at $5.1 million but we just wanted to have a little flexibility with the master purchase order option.”

The $7 million is a cushion for unexpected expenses, the homeless advisor explained during Monday’s meeting.

City council approval allows Chandler and his team to make an immediate purchase order, he said.

“This would be some of the first 200 units that are available to bring the 1,000 people indoors,” Chandler said.

During his first days in office, Mayor Mike Johnston vowed to house 1,000 homeless people by year’s end after declaring a state of emergency over Denver’s homelessness crisis. 

The pallets are meant to be a temporary form of housing for homeless people. Pallet shelters are also seen in neighboring Aurora.

The 70-120 square-foot units come with a bed, desk, storage shelf, AC unit, heater and power outlet, according to Chandler. The 70 square-foot unit has one bed while the 120 square-foot unit has two beds with ADA accessibility. Each unit will be limited to one person, unless couples need the 120 square foot units, Chandler said.

Separate bathroom units are 140 square feet, which Chandler says has two stalls and comes with a toilet, sink and shower. The homeless advisor said the city put 11 bathroom pallets in its order.

In addition, a combined nine community spaces/laundry units are planned across three sites, according to Chandler. The plan is for three 400 square-foot community rooms, three 800 square-foot community rooms and three laundry rooms with four washers/dryers each.

Electrical panels built into the units get installed when the units are constructed, and each has a built-in heater, according to Pallet CEO Amy King.

A contractor would get the site prepared, the units would be delivered on a trailer, then it would take a couple hours to put the panels of pallets together – according to Chandler and King.

King said the pallets can withstand most any weather conditions and have not drawn any complaints, adding a pallet shelter’s shelf life is up to 20 years.

Though it was a unanimous decision approving the purchase of the pallets, council members looked ahead at long-term implications and solutions.

“We don’t have unlimited dollars,” Councilmember Stacie Gilmore said Monday, asking Chandler to do cost benefit analysts for these contracts.

City agencies help pay for emergency resources, according to Chandler. To which Gilmore said an agency provided a cost-benefit analysis for “brick and mortar” housing within Denver – such as hotels or permanent shelters – which she says provides more long-term solutions for the same price.

“Long term we have to make sure we get a bang for our buck,” Councilmember Chris Hinds said, but referenced the city’s emergency homelessness crisis and the immediacy in pallet efforts.

Denver has poured significant resources into addressing its homelessness crisis, spending $152 million in 2022 and earmarking $254 million for 2023. In the last few months, the city and housing authorities in Denver have also bought or approved the purchase of hotels with plans of converting them into shelters.

A January count put the number of homeless people at 5,818 in Denver. With a $254 million allocation this year, that means the city is spending nearly $43,700 for each homeless person. The new pallet purchase is meant to serve 200 individuals experiencing homelessness, according to Chandler – meaning the $5.1 million quote he provided would equate to $25,100 per homeless person.

The city this year saw an 8% increase in the number of homeless people who sleep in public places. All told, the Metro Denver Homeless Initiative counted 9,065 homeless people throughout the seven-county metro area, a nearly 32% increase from 2022.