Housing projects vie for experimental state funding.

More than dozen Bay Area developments seeking Project Homekey money

Bay Area cities and counties are vying for a shot at a new statewide experiment: If they win, they’ll get state funding to buy hotels and apartment buildings and turn them into desperately needed homeless housing.

Bay Area officials have submitted more than a dozen applications for Gov. Gavin Newsom’s Project Homekey — an effort intended to produce long-term housing for homeless residents that will replace temporary shelters set up during the coronavirus pandemic. The projects, which will compete against one another for a share of roughly $100 million reserved for the Bay Area, include submissions from Santa Clara, Alameda, Contra Costa and San Mateo counties.

Newsom launched the precursor to this effort — Project Roomkey — in April. That program provides federal funds for counties that moved sick and elderly homeless residents off the streets, out of shelters and into hotel rooms, where they could be protected from COVID-19. Additional rooms were made available for homeless residents who caught COVID-19.

As homeless outreach workers wondered where people living in those hotels would go once the pandemic ended, Newsom in June launched the next phase of his plan: Project Homekey. Applications were due at midnight Friday.

The Governor’s Office on Friday wouldn’t say how many applica

tions have been submitted throughout the state, but interest was strong in the Bay Area.

Santa Clara County submitted three project applications — one for an Extended Stay America hotel in Milpitas and another for the Palm Tree Inn motel on Monterey Road in San Jose. The county asked for $29.2 million and $5 million for those projects, respectively. The county also is seeking nearly $10 million to turn the former Santa Clara Inn in San Jose, which already serves homeless residents

on a temporary basis, into permanent housing. The 56unit hotel, now called Casa de Novo, became homeless housing in 2016. Half the rooms serve as emergency housing where people coming from off the streets can stay while they wait for permanent housing. The other half provide long-term supportive housing.

For years, nonprofit Abode Services has intended to knock down the hotel and replace it with a new development of more than 100 permanent supportive housing units where homeless residents can live forever with access to case management, mental health, job training and other services. But funding has been tight since

COVID-19 devastated the economy, and Homekey could provide a muchneeded boost to the Casa de Novo project, said Abode CEO Louis Chicoine.

“This could be the difference between getting this project in place in the next couple years, and having to do it in five years,” Chicoine said. “And costs go up over time. Nothing gets better with delays.”

Many of the other Project Homekey applications seek to convert existing hotels and apartment buildings into housing, a process that can be much cheaper and quicker than building from scratch. It can cost $600,000 and $700,000 per unit to build new affordable

housing, and converting a hotel usually runs between $300,000 and $400,000 per unit, Chicoine said. But those projects come with their own challenges. Hotels generally lack space for supportive services — staff offices, computer labs, community rooms, etc. And it’s often costly to update sprinkler systems, fire escapes and other safety measures to bring older hotels up to code, Chicoine said.

In Oakland, officials submitted four applications, including one for a vacant, 63-unit apartment building in the city’s Rockridge neighborhood that once served as dorms for California College of the Arts students. The city also hopes to

use Project Homekey for an apartment building on 11th Street in downtown Oakland — which currently serves as co-living apartments run by startup Starcity — and the Inn at Temescal hotel.

Contra Costa County submitted one application: to convert a Motel 6 in Pittsburg into 174 rooms of homeless housing. The county estimates it will cost $17.4 million to buy and renovate the motel, and $4.17 million to operate the facility for two years.

Alameda County submitted three applications, and San Jose and San Mateo Counties each submitted one. Neither jurisdiction provided further details on the projects Friday. San Francisco

did provide any information on its Project Homekey submissions.

Chicoine was excited to see so much interest. When submissions opened a month ago, he worried the program’s tight deadline and experimental nature would deter applicants.

Though they won’t do it on their own, the Homekey projects could help the Bay Area get closer to its goal of keeping everyone now in pandemic shelters housed long term, Chicoine said.

“It’s really exciting to have the state thinking innovatively like this,” he said. “So that’s great to see.”