Economic hardship is nothing new to the 60 residents of Dignity Village.

But now that the crappy economy has driven down donations of money and food by more than 50 percent over the past year, the city-sanctioned homeless community is adopting more of a business model to generate revenue and clamp down on expenses.

"It makes us more self-sufficient," says Bradford Powell, a Dignity Village resident since 2006. "Times are getting harder."

Before getting into the changes at Dignity Village, here's a quick refresher for those who may be unfamiliar with the homeless settlement in Northeast Portland.

A few days before Christmas 2000, eight homeless people formed a controversial tent city near downtown Portland. The tent city residents' battles with city officials continued until Aug. 22, 2001, when the Portland City Council granted the group space in Sunderland Yard—part of a recycling factory next to the Columbia River Correctional Institution.

The nonprofit, 1.5-acre village has an annual budget of $40,000 and survives both on grants and personal donations.

Each new project needing money goes before the city Bureau of Housing and Community Development. If the bureau approves the project, it issues a grant, such as money recently OK'd for propane heaters, Internet service and materials for the village community center. Since its inception eight years ago, the village has received less than $200,000 in city grants, or less than $25,000 a year.

But the free-falling economy has dried up personal donations to the village, including weekly contributions of cash from Hostess factory workers, food from Fred Meyer and bread from Safeway.

Dignity Village responded by meeting last October with Micro Enterprise Services of Oregon, a nonprofit that helps entrepreneurs develop sustainable business models.

The result? Dignity Village is trying to generate its own income with new enterprises.

One of these enterprises is a hot-dog cart selling "Dignity Dogs" at city events, including the upcoming Rose Festival.

The second new business is an eBay store, which for the past three months has sold various items such as camera lenses.

At MESO's suggestion, Dignity Village is also working to cut its expenses.

Dignity Village renegotiated its yearly liability insurance, for example, from $10,535 a year down to $2,354. Residents are also hoping to install indoor plumbing, which would be cheaper in the long run than the current practice of renting portable toilets.

At the same time Dignity Village is trying to run more like a business, it's also urging City Hall to help start a second tent city given that Portland's homeless population rose 13 percent between 2007 and 2009.

Sally Erickson, manager of the city's Ending Homelesss Initiative, says a second tent city is unlikely because there's neither the money nor the motivation.

That's disappointing to Dignity Village council member Randy Curl, a longtime resident.

"I'd like to see another camp started," Curl says. "With the amount of homeless around, it wouldn't make a dent overall, but it would help."


Guaranteed by the city to retain its land through 2010, Dignity Village features 10-by-10-foot houses built from recycled and donated materials.