June 30, 2023

$23 Million in State Homekey Funds Sought to Create 75 Affordable Apartments for People Experiencing Homelessness

SAN DIEGO, CA — Continuing collaborative efforts to create additional permanent affordable homes with supportive services for people experiencing homelessness, the San Diego Housing Commission (SDHC) has applied for up to $23 million from the state Homekey program for two properties in collaboration with the City of San Diego and County of San Diego.

“My administration’s comprehensive strategy to address homelessness includes robust street outreach; expanded shelter, Safe Parking and Safe Sleeping programs; advocacy on mental health treatment and fentanyl enforcement; removing tent encampments from our sidewalks and canyons; and, most importantly, creating housing,” said Mayor Todd Gloria. “I am proud of the City’s collaboration with the Housing Commission and the County to seek as much Homekey funding as we can to get our unsheltered residents into permanent homes and on a path to a better quality of life.”

“Our County is committed to supporting creative, sustainable, and equitable solutions for our unsheltered population. Through strong collaborative partnerships with the City of San Diego, and the San Diego Housing Commission, we can continue finding viable solutions for our unsheltered community,” said Nora Vargas, Chairwoman of the San Diego County Board of Supervisors. “No single level of government can do this alone. By prioritizing housing and vital services like mental health, food assistance, and primary care we can keep our families, seniors, and veterans under a roof.”

San Diego’s first applications for this round of Homekey funding are for:

• Ramada Inn at 3737-3747 Midway Drive in the Midway community. SDHC applied for up to $18 million toward the purchase and rehabilitation of this property to create 62 affordable rental apartments with supportive services.
• A vacant, multifamily housing property at 2147 Abbott Street in Ocean Beach, which would provide 13 affordable rental apartments with supportive services. SDHC applied jointly with Wakeland Housing and Development Corporation (Wakeland) for up to $5 million toward Wakeland’s acquisition and rehabilitation of this property.

“We cannot solve our homelessness crisis without more homes,” said Council President Sean Elo-Rivera. “A safe and dignified home provides people the mental and physical stability needed to regain control of their lives, utilize key services, and stay permanently housed. By tapping into state funding, this innovative and collaborative approach is one of the most cost-effective and efficient ways to significantly reduce homelessness in San Diego.”

“As a family physician, I know that homelessness is a healthcare crisis, and we must look at every opportunity to help unsheltered San Diegans. Thank you to the City’s Homelessness Strategies and Solutions Department, the San Diego Housing Commission and the County of San Diego for their vision to find solutions that will end homelessness in San Diego,” said City Councilmember Jennifer Campbell. “Additional funding for the Homekey Program will provide a home, stability and quality of life for unsheltered people in San Diego.”

Residents would receive access to supportive services, such as primary health care, mental and behavioral health care, and other community-based programs to best meet a resident’s individual needs.

“The San Diego Housing Commission has focused on developing a continuum of housing opportunities to best meet the needs of people experiencing homelessness. Affordable rental apartments are one of the many essential types of housing necessary to meet the diverse needs of our unhoused neighbors,” SDHC Interim President & CEO Jeff Davis said. “Homekey funding makes it possible to add this type of housing quickly. Residents will also receive site-based supportive services to enhance their quality of life and support stable tenancies.”

The purchase and rehabilitation of the Midway Drive and Abbott Street properties is contingent on the state awarding Homekey funds. The state is expected to announce funding decision in approximately August.

Project Homekey provides an opportunity to bring badly needed housing online faster and cheaper than traditional new-construction affordable housing. Thanks to funding and regulatory streamlining from the Homekey program, San Diego has a unique opportunity to get people out of encampments and shelters into permanent homes in months rather than years, and for as much as several hundreds of thousands of dollars less, per door. In some cases, the cost of new construction in San Diego has exceeded $675,000 per door. Homekey requires rehabilitation and occupancy to occur by a little more than a year at the latest; new housing can take three or more years to complete.

Two additional properties remain under consideration for potential applications in the statewide competition for the current round of limited Homekey funding. SDHC is performing due-diligence activities to evaluate the properties, including obtaining appraisals, to determine whether to proceed with their purchase and rehabilitation, which also depends on the availability of limited state Homekey funds.

The Extended Stay America properties being considered are:

• 3860 Murphy Canyon Road in Kearny Mesa, which would create 106 affordable housing units with supportive services
• 2085-95 Hotel Circle South in Mission Valley, which would create 163 affordable housing units with supportive services

A third property previously was considered. However, during the due diligence process, the decision was made not to pursue the potential purchase of the property at 7440-50 Mission Valley Road in Mission Valley.

If the state awards Homekey funds to support any submitted project, SDHC would request approval from the San Diego City Council, sitting as the Housing Authority of the City of San Diego, to accept and expend the funds for the purchase and rehabilitation before proceeding.

On May 23, 2023, the County of San Diego Board of Supervisors approved up to $32 million toward the purchase and renovation of up to four potential Homekey projects and $4.6 million per year for a minimum of five years toward supportive services for those projects in collaboration with the City of San Diego and SDHC. The award is contingent upon completion of all due diligence and successful Homekey awards.

The Homekey program is a statewide initiative to rapidly produce housing for people experiencing homelessness or at risk of homelessness. The current round of funding makes $736 million available statewide, of which $34 million is set aside for the San Diego region’s local geographic pool. The San Diego region may also apply for a competitive statewide pool of funds.

San Diego has received more than $49.5 million from the Homekey program in previous rounds of funding to create 372 affordable rental apartments:

• PATH Villas El Cerrito: Last year, the state awarded $11.83 million in Homekey funds to help finance the development of 40 new affordable rental apartments at 5476 El Cajon Blvd. in the El Cerrito neighborhood. Construction is underway on the development, a partnership between PATH Ventures, Family Health Centers of San Diego and Bold Communities. The City of San Diego and County of San Diego also allocated funds to this development, with the County committing additional funds for supportive services. SDHC awarded 40 rental housing vouchers to help residents of the new development pay rent.
• Kearny Vista and Valley Vista Apartments: During the pandemic in 2020, in the first round of Homekey funding, the state awarded $37.7 million to SDHC toward the purchase of two extended-stay hotel properties. The City of San Diego also allocated funds toward the purchase of these properties, and the County of San Diego allocated funding for supportive services. Within two and a half weeks of SDHC’s purchase of the properties, people experiencing homelessness began moving in. Today, the properties continue to provide 332 units of permanent affordable rental housing with supportive services for residents who experienced homelessness.

 

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Media Contacts:
Office of Mayor Todd Gloria, City of San Diego
MayorPress@sandiego.gov 

Humberto “Beto” Gurmilan, Office of County Board of Supervisors Chair Nora Vargas
Humberto.Gurmilan@sdcounty.ca.gov; (619) 548-2513 

Scott Marshall, San Diego Housing Commission
scottm@sdhc.org; 619-578-7138