Wakeland Housing and Development

May 24, 2023

SAN DIEGO — A divided county Board of Supervisors on Tuesday agreed to authorize up to $32 million in loans toward the city of San Diego’s potential purchase of four residential properties that could be used to house more than 300 homeless people. The city’s Housing Commission is considering buying the properties with money from the state’s Project Homekey program, and the purchases are contingent on receiving the grants. The latest round of Project Homekey funding provides $736 million in competitive grants statewide, with $34 million set aside for San Diego, which also is eligible to apply for a share of the total funds. Construction of any housing with Project Homekey funds must be complete within 12 months of receiving the money, and units must be fully occupied within 15 months. The Housing Commission has unanimously backed the purchases as a way of quickly finding permanent housing for homeless people at a far cheaper cost than building new units. Advertisement The board majority said the purchases were worth pursuing, with Supervisor Terra Lawson-Remer saying that it would be “silly to leave money on the table.” Supervisor Jim Desmond cast the only opposing vote and said at the meeting that he disagreed with the housing-first approach, which does not require residents to undergo treatment for substance abuse or mental health issues. In a statement issued shortly after the vote, Desmond also said the cost of the properties was too high. “Today’s legislation fails to address the root causes of homelessness and lacks the necessary accountability for taxpayer funds,” he said. “Spending over $153 million taxpayer dollars at $478,000 per unit is not the solution.” The properties being considered include three hotels and one apartment building. One of the hotels is a 62-unit Ramada Inn on Midway Drive, which the Housing Commission agreed to pursue at its May 12 meeting when it unanimously agreed to apply for $18 million in Project Homekey funding. The estimated purchase price would be $11.6 million, equating to about $182,000 a unit, but adding kitchenettes and other upgrades would increase the overall cost to $29.5 million, or $469,000 a unit. The city also is submitting a joint $4 million application with Wakeland Housing and Development Corp. to purchase a vacant 13-unit apartment building in Ocean Beach. Purchasing the building would cost $4.5 million, but rehabilitation expenses would increase the cost to $6.8 million, bringing the per-unit cost to $525,000. The other two properties are a 107-unit Extended Stay America Hotel on Murphy Canyon Road for $40.7 million and a 140-unit Extended Stay America Hotel on Mission Valley Road for $52 million. In all, the city is applying for $88.7 million in Project Homekey funds and would contribute $32.2 million for the purchases. The Housing Commission began investigating the purchase of the Ramada Inn last year and already has conducted due diligence on the property, which included reviewing preliminary title reports, obtaining appraisals, conducting a market study and physically inspecting the property. Due diligence still is being conducted on the other properties, and the Housing Commission is expected to apply for Project Homekey funds next months if the properties are found to be in good shape and appraisals and other factors are favorable. With Tuesday’s action, the Board of Supervisors agreed to enter into a memorandum of understanding with the city to authorize up to $32 million in combined funds from the American Rescue Plan Act and Behavioral Health Impact Fund. The action also authorized issuing competitive solicitations for behavioral health supportive services for the projects. The county would provide up to $4.6 million annually for at least five years for tenant supportive services, including outreach, case management and clinical case management for people who had experienced chronic homelessness and have behavioral health issues. The Housing Commission will provide 320 housing vouchers for all units, valued at $68 million. Board Chair Nora Vargas said the project is an example of a successful partnership and addressed a top priority in the county. “What’s really important for us about this is it’s the creation of permanent affordable housing, and I think that’s important to help our most vulnerable populations,” she said. Desmond said he would not support the purchases because they do not require tenants to commit to alcohol and drug treatment. “As a county entity I think we really should be focusing our money on treatment and services, not on taxpayer hotels as homeless housing that do not require treatment,” he said. “Any effort to reduce homelessness must require treatment and care.” When asked to clarify if he indeed meant every tenant should be required to go into treatment, a representative from Desmond’s office said the rule wouldn’t apply for people who are homeless solely for economic reasons or because they were domestic violence survivors. His office also cited a statistic from the Substance Abuse and Mental Health Services Administration that more than 80 percent of chronically homeless people struggle with drug and alcohol abuse. Luke Bergmann, director of county Behavioral Health Services, said at the meeting that all tenants of the properties would be screened and offered any care needed. He said research has shown the housing first approach gets people into treatment with successful outcomes. “The idea here behind the Homekey initiative isn’t to ignore the significance or consequence of behavioral health conditions,” he said. “It’s to provide a space that optimizes the likelihood that people actually engage in care and then be successful.” A representative of San Diego Mayor Todd Gloria spoke in favor of the property purchases, but two Republican mayors of other cities issued statements before the meeting in opposition. “I believe this initiative lacks the necessary measures to address the root causes of homelessness and will not effectively solve the ongoing crisis in our community,” El Cajon Mayor Bill Wells said. “Without the political will to confront the reality that homelessness stems from substance abuse rather than inadequate housing, our efforts to overcome this predicament will remain futile. “I firmly believe that providing housing alone, without addressing underlying issues such as sobriety, substance use, and mental health, does not present a comprehensive solution to homelessness,” he said. Coronado Mayor Richard Bailey also said he opposes the purchases. “This initiative, touted as a solution to homelessness, is profoundly misguided and fails to address the core issues perpetuating this crisis,” he said. “California politicians continue to repeat the decade-long failures of housing first. At the same time, more and more people tragically end up on the streets. San Diegans should reject ineffective approaches and demand solutions that tackle the underlying causes of homelessness in our community.”