Birmingham Mayor Randall Woodfin on Thursday night gave an update on the city’s plan to build tiny homes to house the homeless.

“We know that homelessness has been a pressing issue in this city,” Woodfin said in his “Blueprint” speech on Thursday at the Birmingham Museum of Art, which recapped the first two years of his second term in office since his re-election and inauguration in 2021.

Woodfin named three finalists who had submitted proposals to help run a tiny home community for the homeless in the city. Faith Chapel Care Center, AIDS Alabama and Urban Alchemy are the three finalists who submitted proposals to run the program, Woodfin said.

“This program will help us reduce homelessness,” he said.

The plan involves small, lockable shelters where the homeless can sleep safely, using units provided by Pallet Shelter, “the leader in rapid response shelter villages.”

The city plans to use up to $1 million in federal Community Development Block Grants to fund the program, along with support from non-profit organizations and corporate support.

In January, the city asked for proposals from organizations willing to take on administration of a program using the shelters. The pilot program would purchase 50 shelters, along with accompanying shower/bathroom units that could be assembled to form a small shelter community. A two-stall bathroom-shower unit is installed for each group of 10 shelters.

“These shelters will be assembled on a dedicated site for safe sleep, shelter and support, because that’s what they deserve, everybody,” Woodfin said.

The city has not proposed any locations for the shelters and will not select the sites. That is part of the requested proposals from community organizations, which would have to meet city specifications.

The proposed pilot program, called “Home for All,” will be a community partnership that will include Pallet sleeping units and other services. The proposals also include a plan for services including healthcare, job training, substance abuse counseling and case management.

Pallet Shelter has built shelter communities for the homeless in Fayetteville, Arkansas; Dallas, Texas; Fresno, California; and Tacoma, Washington, and other cities. The organization has constructed 1,764 sleeping units among 63 shelter communities with more than 4,000 people served. Pallet Shelter would provide private, lockable sleeping units that feature a heating and cooling system and desk. The micro-shelters would be congregated in safe, private communities, according to the proposal. Each can be assembled in under an hour and at a fraction of the cost of traditional homeless shelters, according to Pallet Shelter.

Each basic unit costs about $12,000 and Pallet Shelter does the on-site assembly.