1/9: Gov Newsom this week announced the first 10 hotel-to-homeless-housing conversion projects using $600 million of COVID relief money from #ProjectHomekey. How do these projects stack up?
2/9: What really jumps out is the value. These 10 projects will secure 579 units for $76.5 million, or about $132k per unit. That's WAY cheaper than is typical for these projects. For example, this Oakland project cost $314k per unit: huduser.gov/portal/pdredge…
3/9: Or check out this Santa Cruz project that was $283 per unit: housingfinance.com/developments/h…
4/9: Or this Anaheim project clocking in at $363k per unit: ocregister.com/2020/05/22/mot…
5/9: So what's going on? PreCOVID conversions were usually old, dilapidated hotels (big $ to rehab), whereas Homekey is securing newer, currently functioning hotels, mostly ready to go (check out @mlevinreports deep dive on conversions) calmatters.org/housing/2020/0…
6/9: At $132k per room, Project Homekey is on pace to produce 4,545 units of transitional housing for the homeless and become a major accomplishment for the Newsom Admin. Great news! But here's why it probably can't scale:
7/9: CA has ~110k unsheltered homeless ppl, meaning Homekey is on pace to house ~4%. Some cities might not even notice a difference. Sheltering all 110k in a Homekey-like project would cost $14.5 billion and require at least $1 billion/yr
8/9: In short, Homekey is off to a great start, but ending homelessness requires bringing per unit costs down to depths currently reachable only by ADUs (and even then will still need fed support). We should!
9/9: In the meantime, California should end the horror of unsheltered homelessness by prioritizing safe shelter to all who need it, which at ~$35k per bed, is something we could do right now.
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