News

Palo Alto's ambitious plans for transitional housing hit financial hurdle

As other Bay Area jurisdictions acquire Homekey grants, city awaits state's verdict on $27M request

The city-owned site at 1237 San Antonio Road, which is shown here in September 2019 and which currently includes a GreenWaste storage area, has been proposed as site for transitional housing for homeless residents. Embarcadero Media file photo by Magali Gauthier.

When Mountain View opened a new interim-housing complex for homeless residents on Leghorn Street in May 2021, the project was hailed by Santa Clara County leaders and Gov. Gavin Newsom as a model approach to addressing a seemingly intractable problem.

Numerous other cities have since followed suit with their own proposals for interim housing projects that rely on modular units that can be assembled quickly and cheaply and that, in many cases, are funded by the state's Homekey program, which focuses on creating shelter for homeless and extremely low-income residents.

Redwood City secured $55.3 million in Homekey funds in December for a project called Navigation Center that will consist of 240 modular units for homeless individuals. And in early March, the city of Alameda received $12.3 million to construct modular homes for homeless youth on a parcel next to the College of Alameda. Mayor Marilyn Ezzy Ashcraft said her support for the project was inspired in part by her field trip to Mountain View, where she learned about the city's success in constructing modular homes in just six months.

"We just came away saying, 'Wow! It is possible and it is within our grasp," Ashcraft said at a City Council meeting last November, referring to the Mountain View project.

But Palo Alto's attempt to follow its neighbor's lead remains stuck in limbo. To date, the city has not been successful in obtaining funds to build a Mountain View-style shelter at a 1237 San Antonio Road. Paul Dulai, Homekey program manager, notified the city in a Feb. 22 letter that the Bay Area region, which includes Palo Alto, is already "fully subscribed." The city's application, he added, "is still under review and may be funded as funds become available."

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While Dulai indicated that the state Department of Housing and Community Development would inform the city in March about availability of funds, the city had not heard back as of early this week. Joanne Price, vice president for real estate and operations at LifeMoves, the nonprofit that operates the Mountain View development and that is partnering with the city for the San Antonio Road project, told this news organization in an April 4 email that the state agency is still evaluating applications and has not notified the nonprofit about potential funding. Deputy City Manager Chantal Gaines also said the city is still waiting to hear back from the HCD, though it expects to learn more about the status of the funding request in the coming days.

Despite the setback, Palo Alto staff and LifeMoves remain hopeful that the project will ultimately get built. Mayor Pat Burt told this news organization in an interview Wednesday that the reason that the city didn't get funding has more to do with the fact that the HCD had received far more applications than it had expected, making the field far more competitive in the second round of funding allocations.

The community area at LifeMoves Mountain View, which is shared by formerly homeless clients living in interim housing. Courtesy LifeMoves.

Burt said that if the city and LifeMoves don't get the requested $27 million in Homekey funds in the current round, they will continue to pursue it in subsequent rounds. The consensus between the city and all of its partner agencies is that the plan for San Antonio Road is an "outstanding proposal" and in some ways goes beyond even what Mountain View has done. The Palo Alto project would consist of 88 apartments, including 64 studios and 24 apartments for families. The Mountain View development includes 88 studios and 12 family units. The city, he said, has done exactly what Newsom urged all jurisdictions to do and submitted a serious proposal, which includes contributing land and spending $7 million annually on operations.

Partner agencies are also stepping up. LifeMoves and the county have agreed to contribute $7 million and $6.5 million, respectively, in operating costs, while the The Sobrato Organization has offered $5 million to help with the capital costs.

"Palo Alto came forward with a great project and the state needs to step up and do their share for the very thing they encouraged," Burt said.

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The HCD launched the latest round of funding, known as Homekey 2.0, last September, with the intent of giving out $1.45 billion in funding to cities and counties across the state. Of this amount, $787.2 million is based on geographic allocation, with each of California's eight regions getting a share based on their respective populations of homeless and extremely low-income individuals. That fund, which includes about $200 million for the Bay Area, has now been depleted.

In the Bay Area, the HCD has approved funding for 11 jurisdictions under the Homekey 2.0 program. The list includes $22 million for Santa Clara County to purchase and rehabilitate Bella Vista Inn in the city of Santa Clara to create 65 apartments and $18 million for the city of Napa to create 55 apartments for homeless youth in a purchased hotel. Redwood City had two projects approved in the current Homekey round: Navigation Center and the purchase of Comfort Inn and Suites to create 51 rooms for individuals who are currently homeless. San Mateo County, which is spearheading both Redwood City projects, received $16 million for the motel purchase. The HCD is also providing Homekey funds for affordable housing projects in San Francisco, Petaluma, Healdsburg and Larkspur.

'Palo Alto came forward with a great project and the state needs to step up and do their share for the very thing they encouraged.'

-Pat Burt, mayor, city of Palo Alto

With the Bay Area allocations now depleted because of these projects, Palo Alto's best remaining hope is the Homekey program's $196.8-million "discretionary reserve," which the HCD can provide to any project across the state. The agency plans to distribute this money by May 2, when the funding round officially closes.

"The intent is that if there are oversubscribed regions, HCD will have room and flexibility to still award funding to great projects," Angela Marin, section chief at HCD, said at a September 2021 webinar describing the Homekey 2.0 program.

Palo Alto and LifeMoves hope the San Antonio Road project will fit that bill. On March 11, Burt made the case for Homekey funds in a letter to HCD in which called the city's project "very cost competitive" and said that it can be "delivered within the fast time frame the grant requires, is a larger two-story version of the Mountain View model with more family units, and is ready to go."

The project, Burt wrote, would be "the first of its kind in Palo Alto and would provide a breakthrough in transitioning the City's unhoused individuals and families (over 300 as of the 2019 point-in-time count) to eventual permanent housing."

"In a time of having made severe cuts to our staffing and services, the City has committed to contributing valuable city-owned land and a significant share of the operational funding for the project," Burt wrote.

Burt told this news organization that if HCD doesn't provide the funding in the current Homekey cycle, he expects the city will apply again in the next funding round, which kicks off this fall. And given the success of the program to date and California's budget surplus, city officials and LifeMoves believe there will be more funding rounds after that, he said.

He also suggested that the San Antonio project has become even more viable over the past two months as the nonprofit Charities Housing proposed developing a 129-apartment complex at 3001 El Camino Real, the former site of Mike's Bikes. The development, which consists entirely of below-market-rate units, could potentially serve as a permanent shelter for some of the residents in the LifeMoves program.

"There is a great synergy between that project and the LifeMoves project because that project is for very low- and extremely low-income residents, which would include many of the folks who would potentially be transitioning from the short-term housing with the LifeMoves project and have longer-term housing potentially provided by the Charities Housing project," Burt said.

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Gennady Sheyner
 
Gennady Sheyner covers the City Hall beat in Palo Alto as well as regional politics, with a special focus on housing and transportation. Before joining the Palo Alto Weekly/PaloAltoOnline.com in 2008, he covered breaking news and local politics for the Waterbury Republican-American, a daily newspaper in Connecticut. Read more >>

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Palo Alto's ambitious plans for transitional housing hit financial hurdle

As other Bay Area jurisdictions acquire Homekey grants, city awaits state's verdict on $27M request

by / Palo Alto Weekly

Uploaded: Thu, Apr 7, 2022, 9:39 am

When Mountain View opened a new interim-housing complex for homeless residents on Leghorn Street in May 2021, the project was hailed by Santa Clara County leaders and Gov. Gavin Newsom as a model approach to addressing a seemingly intractable problem.

Numerous other cities have since followed suit with their own proposals for interim housing projects that rely on modular units that can be assembled quickly and cheaply and that, in many cases, are funded by the state's Homekey program, which focuses on creating shelter for homeless and extremely low-income residents.

Redwood City secured $55.3 million in Homekey funds in December for a project called Navigation Center that will consist of 240 modular units for homeless individuals. And in early March, the city of Alameda received $12.3 million to construct modular homes for homeless youth on a parcel next to the College of Alameda. Mayor Marilyn Ezzy Ashcraft said her support for the project was inspired in part by her field trip to Mountain View, where she learned about the city's success in constructing modular homes in just six months.

"We just came away saying, 'Wow! It is possible and it is within our grasp," Ashcraft said at a City Council meeting last November, referring to the Mountain View project.

But Palo Alto's attempt to follow its neighbor's lead remains stuck in limbo. To date, the city has not been successful in obtaining funds to build a Mountain View-style shelter at a 1237 San Antonio Road. Paul Dulai, Homekey program manager, notified the city in a Feb. 22 letter that the Bay Area region, which includes Palo Alto, is already "fully subscribed." The city's application, he added, "is still under review and may be funded as funds become available."

While Dulai indicated that the state Department of Housing and Community Development would inform the city in March about availability of funds, the city had not heard back as of early this week. Joanne Price, vice president for real estate and operations at LifeMoves, the nonprofit that operates the Mountain View development and that is partnering with the city for the San Antonio Road project, told this news organization in an April 4 email that the state agency is still evaluating applications and has not notified the nonprofit about potential funding. Deputy City Manager Chantal Gaines also said the city is still waiting to hear back from the HCD, though it expects to learn more about the status of the funding request in the coming days.

Despite the setback, Palo Alto staff and LifeMoves remain hopeful that the project will ultimately get built. Mayor Pat Burt told this news organization in an interview Wednesday that the reason that the city didn't get funding has more to do with the fact that the HCD had received far more applications than it had expected, making the field far more competitive in the second round of funding allocations.

Burt said that if the city and LifeMoves don't get the requested $27 million in Homekey funds in the current round, they will continue to pursue it in subsequent rounds. The consensus between the city and all of its partner agencies is that the plan for San Antonio Road is an "outstanding proposal" and in some ways goes beyond even what Mountain View has done. The Palo Alto project would consist of 88 apartments, including 64 studios and 24 apartments for families. The Mountain View development includes 88 studios and 12 family units. The city, he said, has done exactly what Newsom urged all jurisdictions to do and submitted a serious proposal, which includes contributing land and spending $7 million annually on operations.

Partner agencies are also stepping up. LifeMoves and the county have agreed to contribute $7 million and $6.5 million, respectively, in operating costs, while the The Sobrato Organization has offered $5 million to help with the capital costs.

"Palo Alto came forward with a great project and the state needs to step up and do their share for the very thing they encouraged," Burt said.

The HCD launched the latest round of funding, known as Homekey 2.0, last September, with the intent of giving out $1.45 billion in funding to cities and counties across the state. Of this amount, $787.2 million is based on geographic allocation, with each of California's eight regions getting a share based on their respective populations of homeless and extremely low-income individuals. That fund, which includes about $200 million for the Bay Area, has now been depleted.

In the Bay Area, the HCD has approved funding for 11 jurisdictions under the Homekey 2.0 program. The list includes $22 million for Santa Clara County to purchase and rehabilitate Bella Vista Inn in the city of Santa Clara to create 65 apartments and $18 million for the city of Napa to create 55 apartments for homeless youth in a purchased hotel. Redwood City had two projects approved in the current Homekey round: Navigation Center and the purchase of Comfort Inn and Suites to create 51 rooms for individuals who are currently homeless. San Mateo County, which is spearheading both Redwood City projects, received $16 million for the motel purchase. The HCD is also providing Homekey funds for affordable housing projects in San Francisco, Petaluma, Healdsburg and Larkspur.

With the Bay Area allocations now depleted because of these projects, Palo Alto's best remaining hope is the Homekey program's $196.8-million "discretionary reserve," which the HCD can provide to any project across the state. The agency plans to distribute this money by May 2, when the funding round officially closes.

"The intent is that if there are oversubscribed regions, HCD will have room and flexibility to still award funding to great projects," Angela Marin, section chief at HCD, said at a September 2021 webinar describing the Homekey 2.0 program.

Palo Alto and LifeMoves hope the San Antonio Road project will fit that bill. On March 11, Burt made the case for Homekey funds in a letter to HCD in which called the city's project "very cost competitive" and said that it can be "delivered within the fast time frame the grant requires, is a larger two-story version of the Mountain View model with more family units, and is ready to go."

The project, Burt wrote, would be "the first of its kind in Palo Alto and would provide a breakthrough in transitioning the City's unhoused individuals and families (over 300 as of the 2019 point-in-time count) to eventual permanent housing."

"In a time of having made severe cuts to our staffing and services, the City has committed to contributing valuable city-owned land and a significant share of the operational funding for the project," Burt wrote.

Burt told this news organization that if HCD doesn't provide the funding in the current Homekey cycle, he expects the city will apply again in the next funding round, which kicks off this fall. And given the success of the program to date and California's budget surplus, city officials and LifeMoves believe there will be more funding rounds after that, he said.

He also suggested that the San Antonio project has become even more viable over the past two months as the nonprofit Charities Housing proposed developing a 129-apartment complex at 3001 El Camino Real, the former site of Mike's Bikes. The development, which consists entirely of below-market-rate units, could potentially serve as a permanent shelter for some of the residents in the LifeMoves program.

"There is a great synergy between that project and the LifeMoves project because that project is for very low- and extremely low-income residents, which would include many of the folks who would potentially be transitioning from the short-term housing with the LifeMoves project and have longer-term housing potentially provided by the Charities Housing project," Burt said.

Comments

Native to the BAY
Registered user
Old Palo Alto
on Apr 7, 2022 at 1:30 pm
Native to the BAY, Old Palo Alto
Registered user
on Apr 7, 2022 at 1:30 pm

I wish the City of Palo Alto knew how to partner better with private, non-profit, governmental agencies -- plenty of "surveys" and highly paid "consultants" be had at the city level. Yet. Emergency housing like this needs incredible amounts human investment to pull off. That is face-to-face action, advocacy and clear understandable plans, designs. Investing to work through the current and growing unhoused crisis (families, children, teens, moms, seniors) at hand takes ingenuity, commitment and lot's of elbow grease. Like minded people who share a common goal for the good of the people, from start to finish. It's survival time. Gennady no write up of the "Housing is Key " rent relief program -- now over. Many many Palo Alto families being served 3 day notices to vacate for non-rent payment -- at this minute as I type this here comment. Where is your investigative skills in a "free press" enviro? As a reporter you seem to hold a lot of power in choosing your audience, subject and end-goal.


carlt
Registered user
Duveneck/St. Francis
on Apr 7, 2022 at 2:11 pm
carlt, Duveneck/St. Francis
Registered user
on Apr 7, 2022 at 2:11 pm

The City of Palo Alto has as one of its priorities improve the homeless situation. It's time they put their money where their priorities are. There is a surplus supposedly in the current budget which if there was a will to do so could be put to make this project happen. Even if there isn't a surplus the City should step up to the plate before the situation gets worse. Stop building speed bumps and build housing!!!


Mondoman
Registered user
Green Acres
on Apr 7, 2022 at 3:50 pm
Mondoman, Green Acres
Registered user
on Apr 7, 2022 at 3:50 pm

@carlt I thought PA has an enormous unfunded shortfall for future retired city worker pension payments. Any surplus should go toward that to prevent future city bankruptcy.


Palo Alto native
Registered user
Midtown
on Apr 8, 2022 at 8:48 am
Palo Alto native, Midtown
Registered user
on Apr 8, 2022 at 8:48 am

Palo Alto needs to get its house in order before spending money it doesn’t have. Do El Camino businesses want a large low income housing project in that location? Lots of empty apts all over, begging for tenants. Open libraries daily, fix streets, underground utility lines, build grade separation.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Apr 8, 2022 at 12:36 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Apr 8, 2022 at 12:36 pm

All of these comparisons to other cities. STOP It and THINK. This city is built from border to border with $3M homes. We do not have the same demographics as RWC which has a huge amount of commercial land east of 101. Likewise MV. The first requirement is available land. Next is a commercial section that has aging businesses that can be repurposed. How about the tax base of the city? FB donates to RWC. Google donates to MV. Does SU donate to PA? Did you all forget that the major land holder in our section of the bay is SU - and they run their own show?

Every paper and advocacy group is pushing their own agenda and is "working it". But no one is talking about what is required to build a successful camp. I do not think the one in MV on our border is anything to crow about. See fire trucks there on occasion.

Better to focus on El Camino with multi-story buildings which have a business on the ground floor and graduated size apartments as you go up. That is the weakest section in this city. Many empty buildings just sitting there collection weeds.


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