California's hotel-to-housing program put 13,500 people into homes

A California housing program started during the Covid-19 pandemic promised to turn vacant hotels and motels into homes for unhoused Californians. How did it do?

In an analysis for CalMatters, Lauren Hepler and Marisa Kendall assess the results of Project Homekey, and the results are mixed. The program awarded over $3.8 billion to local governments to convert shuttered motels and other properties into housing. But the program had little oversight, and state lawmakers failed to advance a bill that would have required an audit. "The challenge now: A new and more complex phase is already underway with up to $2 billion from the voter-approved Prop. 1 mental health bond. But no one has publicly accounted for how many of the program’s original projects stalled out and how many succeeded."

CalMatters filed over 100 public records requests to assess the progress of Project Homekey at 250 projects. They found that "When Homekey worked, those involved stress that it really worked. Nearly 13,500 people now live at Homekey sites, according to the state Housing Department." In some cases, small communities were able to create their first-ever housing for homeless residents. 

But projects totaling around 3,000 units have stalled, and 2,000 units are being occupied on a temporary basis. "In 10 instances involving 500 more units, the state publicized grants that later were canceled or that never materialized because local officials or developers backed out." Furthermore, completing a conversion project is just the first step. Cities need additional funding and resources to maintain the new properties and provide services for residents. The state Housing Department says it monitors each project closely and "is learning" as it begins to dole out additional funds. The state has doubled the timeline for new construction from one year to two and raised the budget for projects that serve veterans.