California: Governor Newsom Announces $76 Million in First Round of Homekey Awards

Nearly $76.5 million will be awarded to seven local jurisdictions for 10 projects

Projects in Tahoe Basin, Lake Elsinore will bring those communities' chronic homelessness to functional zero within two years

Innovative project in El Centro will build 13 tiny home duplexes to provide two years of permanent housing, supportive services for 26 homeless students who are also former foster youth

Initial Homekey projects' per-room acquisition cost estimates fall below original state estimates

SACRAMENTO – Governor Gavin Newsom today announced the first round of awards for Homekey, California's nation-leading $600 million program to purchase and rehabilitate housing – including hotels, motels, vacant apartment buildings and other properties – and convert them into permanent, long-term housing for people experiencing or at risk of experiencing homelessness.

Nearly $76.5 million was awarded by the Department of Housing and Community Development (HCD), which administers Homekey, for 10 projects in seven California communities totaling 579 units.

In meeting the urgency of the homelessness crisis, Homekey prioritizes speed and cost containment. These projects, and future Homekey awardees, must all complete their purchases by December 30th of this year. This first group of projects have estimated per-room acquisition costs that are below original state estimates.

"We are realizing our dream of helping local jurisdictions acquire thousands of motel rooms and convert them into housing for individuals and families experiencing homelessness," said Governor Newsom. "Homekey is the first effort of its kind in the nation and is a once-in-a-generation opportunity to protect the most vulnerable people in our state."

The first round of awards includes projects in the following communities:

The City of Lake Elsinore has been awarded $3,136,000 to acquire, rehab and operate a former hotel to provide 14 interim transitional housing units for up to 28 residents within 90 days. This project will help the city achieve a goal of functional zero for chronic homelessness within the next two years. South Lake Tahoe has been awarded $9,576,000 to acquire four projects totaling 82 units. These projects will help the Tahoe Basin achieve a goal of functional zero for chronic homelessness within the next two years. The City of El Centro has been awarded $3,024,114 to build 13 tiny home duplexes in collaboration with Imperial Valley College and the Imperial Valley College Foundation. The duplexes will house 26 homeless students who identify as former foster youth. Contra Costa County has been awarded $21,576,000 to acquire the 174-unit Pittsburg Motel 6 where Governor Newsom first announced Homekey in June. The City of San Jose has been awarded $14,516,000 to turn a 76-unit property currently operating as a Project Roomkey project into permanent housing. Kern County has been awarded $14,970,935 to acquire four sites totaling 151 units for permanent supportive housing. This project will help address a severe shortage of housing for people with vouchers who are currently unable to find housing. Mendocino County has been awarded $9,669,500 to provide 56 units for interim housing with plans to convert half the units to permanent housing. There is currently no permanent shelter for individuals experiencing homelessness in the county and only 50 year-round emergency shelter beds.

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"In 2016, we launched an effort to rehabilitate deteriorating motels to get more of our homeless residents off the street. Now, with Homekey and the Governor's leadership, we're able to move 77 more homeless individuals off the street, into a motel that we're purchasing with the Homekey money," said San Jose Mayor Sam Liccardo. "We're so grateful for the Governor's leadership, to be able to expand our efforts to house more of our San Joseans."

"On any given night, more than 500 of our residents live outdoors in East Contra Costa, but until now we had only 20 shelter beds in that part of the county," said Contra Costa County Health Director Anna Roth and Contra Costa County Director of Health Housing and Homeless Services Lavonna Martin. "This investment from Homekey will touch hundreds of lives and improve health in Contra Costa County. We're grateful for this award and look forward to working with state and local partners to address critical housing needs in our community."

"This tiny home community will primarily house homeless youth who are pursuing higher education at IVC because they believe that through education, their lives will change," said Imperial Valley College President Dr. Martha Garcia. "Collectively in Imperial County, we are committed to helping those that have the greatest barriers in life."

Building on the success of Project Roomkey, Governor Newsom in July announced the availability of $600 million in funding for Homekey, the next phase in the state's response protecting Californians experiencing or at risk of experiencing homelessness, following approval by the Legislature as part of the 2020-21 annual state budget. Of that, $550 million will be provided to cities and counties by California's direct allocation of the federal Coronavirus Aid Relief Funds, with an additional $50 million provided by the state to supplement the acquisition and provide initial operating funds.

Previously, Governor Newsom released the full $650 million in State Emergency Homeless Aid from last year's budget, and the new state budget approved by the Legislature and signed by the Governor in June includes $300 million General Fund to cities, counties and continuums of care to support efforts to reduce homelessness. The state has partnered with local governments to launch 100-day challenges for immediate impact solutions to tackle homelessness. The Governor began the year by signing an executive order as part of a comprehensive state response to homelessness and called on all levels of government to step up their efforts to combat the crisis in his State of the State address.

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HCD began accepting applications for Homekey on July 22, 2020. Additional awards are expected weekly until all $600 million has been awarded. The response from local governments and housing providers was significant – demonstrating the strength of these state-local partnerships. By the priority application deadline on August 13, a total of 138 applications had been received from 67 jurisdictions statewide, with a total of nearly $1.06 billion requested.

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