California Cities Race For Emergency Funding To Turn Hotels, Other Properties Into Housing

Dozens of local and county governments are competing for pieces of $600M in funds California has made available to transform hotels, vacant apartment buildings and other properties into interim or permanent, long-term housing. 

The program, Project Homekey, is the second major phase in California's efforts to help homeless residents obtain shelter amid the coronavirus pandemic. It follows Gov. Gavin Newsom's April launch of Project Roomkey, in which the state secured emergency federal funding to turn thousands of hotel and motel rooms into safe isolation space for people experiencing homelessness. 

Though the second phase opens up potential funding to properties beyond hotels, local entities like the city of San Francisco and Santa Clara County have submitted a handful of applications aimed mostly at turning select hotels in their jurisdictions into new housing.

Fund allotment will be segmented geographically based on the size of the different areas' homeless populations and number of severely rent-burdened households, or those paying over 50% of income on rent. California expects to administer about $100M in funding to Bay Area counties and about $175M to Los Angeles County, with further divisions made between Southern California minus LA, the Central Coast and other regions.

"The state was creative in its response with the Project Roomkey initiative ensuring a safe housing response during this public health crisis," Tomiquia Moss, founder of homelessness-prevention nonprofit All Home, said in a statement. "It will take strategies like these during this economic and public health crisis to ensure our most vulnerable residents aren’t left behind.”

The deadline for most applications and for most of the $600M allotted through Project Homekey passed in mid-August, and awards will be made on a rolling basis through September. All but $50M is coming from federal coronavirus aid relief funds and thus must be spent by recipients by Dec. 30.

The remaining $50M has to be spent by June 30, 2022.

The historically tourism-reliant city of San Francisco, which is already leasing about 2,600 hotel rooms for essential workers, homeless residents and other vulnerable citizens, submitted two Homekey applications earlier this month, San Francisco spokesperson Leonard Alfaro told Bisnow. 

"As part of the Mayor's Homelessness Response Plan, we look forward to beginning the largest expansion of resources in 20 years," the city's Department of Emergency Management said in a statement. "The City has submitted two Project Homekey applications to convert San Francisco hotels into permanent homeless housing."

Likewise, Santa Clara County has reportedly submitted Homekey applications for three current or former hotels in its jurisdiction. It has asked for $29.2M to convert an Extended Stay America hotel in Milpitas, $5M for a Palm Tree Inn on Monterey Road and about $10M for Casa de Novo, a former hotel now serving some homeless residents on a permanent basis, the Mercury News has reported. 

State officials with the Department of Housing and Community Development administering the program and Santa Clara County officials didn't respond to multiple requests for submission information, nor did San Francisco with regards to specifics of its two submissions.

Alameda County is also looking to utilize Project Homekey. It has submitted four applications for a total of 324 rooms, Alameda County Public Information Director Jerri Applegate Randrup told Bisnow.

"The county is proposing to acquire sites currently used under Roomkey, so those partnerships will remain in place during our COVID-19 response," Randrup said. "When we move toward developing the projects into longer-term permanent housing, we will likely bring in developer partners through a procurement process."

As of earlier this month, Alameda County was leasing eight hotels under Project Roomkey, but Randrup said the county won't disclose which it is hoping to acquire until after it receives approval from the state to move forward. Sites it is currently using under Project Roomkey include an adjacent Comfort Inn & Suites and Radisson Hotel on Edes Avenue in Oakland.

Partners in Alameda County's proposals include Fremont-based nonprofit Abode Services, as well as Berkeley Food and Housing, Building Futures with Women and Children and Five Keys, Randrup said.

Abode Chief Operating Officer Vivian Wan said the organization has opened 13 different Roomkey sites, the largest of which is Oakland's nearly 290-room Radisson, and that it is involved in one Homekey application in Santa Clara County. In a Thursday morning call led by HCD and attended by Abode Chief Real Estate Officer Jon White, HCD reported 140 Homekey applications statewide and 30 in the Bay Area, Wan said.

“I think it’s a great idea and that we probably need to scale it,” she said of Homekey. “The more that we can transition these into long-term housing options where it makes sense and where it’s financially feasible, I’m always in support of creating more long-term housing solutions."

The city of Oakland submitted four applications for the Homekey program, according to a spokesperson. One is at 392 11th St., which is one of co-living company Starcity's two Oakland locations, and another is at 5276 Broadway, where the city is in negotiations with the California College of the Arts to purchase a 63-unit dormitory building. 

The Oakland City Council has a special meeting Friday morning to vote on how it wants to use funds, should they be granted, for the four properties. 

Before this year, the Bay Area's homelessness crisis was already worsening at a rate likely exacerbated by the pandemic. Point-in-time counts last year reported about 35,000 homeless people living in the nine-county Bay Area, up 24% from the prior count in 2017. 

Project Roomkey, which was launched with the goal of procuring 15,000 rooms for homeless residents, had done so for 15,678 rooms by the end of June, Newsom's office announced when it launched Homekey. The California Department of Social Services estimated over 14,200 of those rooms were occupied by then.

“The terrible pandemic we’re facing has given us a once-in-a-lifetime opportunity to buy all these vacant properties, and we’re using federal stimulus money to do it," Newsom said at the time. "Hand in hand with our county partners, we are on the precipice of the most meaningful expansion of homeless housing in decades.”