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California’s Homekey Program Shows Mixed Results in Tackling Homelessness
In the summer of 2020, as COVID-19 swept through California, Governor Gavin Newsom launched an unprecedented initiative to address the state’s homelessness crisis. The Homekey program has since awarded more than $3.8 billion to local governments to convert motels and other buildings into housing for unhoused individuals.
Four years later, the program’s results tell a complicated story of both remarkable successes and troubling failures, according to a comprehensive investigation by CalMatters that included more than 100 public records requests and dozens of site visits.
Nearly 13,500 people now live in Homekey properties across California. The program has created critical housing resources in communities from Glenn County to Ventura, often representing a community’s first dedicated homeless housing. When successful, Homekey projects have provided stability for some of California’s most vulnerable residents while moving significantly faster than traditional affordable housing development.
“Homekey works,” said Jeffrey Lambert, CEO of Ventura Housing, which transformed a notorious drug-infested apartment building into 29 units of quality housing. “But because of all the stuff added on top of it.”
Yet the investigation revealed that approximately one in five promised units—about 3,000 homes—remained unfinished as of late 2023. Another 2,000 units operate as temporary housing rather than the permanent solutions the program intended. In 10 instances involving 500 units, grants were announced only to be canceled later when local officials or developers withdrew.
The mixed outcomes highlight the program’s inherent tensions. Homekey deliberately streamlined processes to create housing quickly, but that speed sometimes came at the expense of proper vetting and oversight.
“You can only have high quality, high speed, or low budgets. You really can’t ever have all three,” said Taryn Sandulyak, whose nonprofit Firm Foundation Community Housing went bankrupt trying to complete a Homekey project in Vallejo. “That’s the issue with Homekey—they give you not quite enough money to do it, and they want you to do it really, really fast and really, really well.”
The Broadway Project in Vallejo ultimately opened after numerous setbacks, providing homes for 52 people, but it came in two and a half years late and 70% over budget. Sandulyak lost her business in the process.
More troubling cases have emerged, including serious allegations of fraud. Los Angeles-based Shangri-La Industries received nearly $115 million in Homekey contracts but now faces federal indictment and civil lawsuits alleging that millions in state funds were diverted to fund a lavish lifestyle for the company’s former CFO, Cody Holmes. Court records describe extravagant spending on luxury homes, designer goods, and private jets while desperately needed housing sat empty.
The state’s minimal oversight of Homekey projects has drawn criticism. Unlike traditional affordable housing development, which typically involves multiple funding sources providing checks and balances, many Homekey projects relied almost entirely on state grants with limited accountability measures.
“They gave us a bunch of money, made us do some paperwork, and then they’re out of here,” said Megan Van Sant, a Mendocino County program manager who oversees a successful Homekey site.
Despite these issues, Governor Newsom continues to champion Homekey as a “phenomenal success.” At a recent press conference, he acknowledged the challenges but emphasized the program’s unprecedented scale.
“We’re talking about hundreds and hundreds of projects all across the state of California,” Newsom said. “Each one of them brings its own opportunities and own challenges as we move forward and implement at a scale we’ve never implemented in the state’s history.”
Looking ahead, California has begun implementing a new iteration of the program, Homekey+, funded by the voter-approved Proposition 1 mental health bond. State officials say they’ve incorporated lessons from earlier challenges, including doubling construction timelines and improving application vetting processes.
However, a fundamental concern remains unaddressed: long-term funding. Most Homekey projects operate on short-term financing models rather than the standard 10-15 year affordable housing funding structures. This leaves many projects facing uncertain futures.
“If Homekey is going to be a long-term, permanent, successful program,” Van Sant said, “the state’s going to have to find a way to find some ongoing funding for it.”
For residents like Terrence White, a 62-year-old former refinery worker now living in Vallejo’s Broadway Project, or Sherry Collins, a 66-year-old widow who found stability at Mendocino County’s Live Oak Apartments, the program’s value is immeasurable despite its flaws.
“It feels wonderful,” White said of finally having his own place.
Their experiences underscore the program’s potential, even as California grapples with improving its execution in addressing one of the state’s most persistent crises.
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10 Comments
As someone who follows housing and homelessness issues, I’m intrigued by the mixed results of Newsom’s Homekey program. The ability to rapidly convert motels into housing is a creative approach, but the challenges around operations and support services are concerning. I hope the state can build on the successes and learn from the failures to strengthen the program going forward.
The scale of California’s homelessness crisis requires bold action, so I’m glad to see the state attempting innovative approaches like Homekey. However, the mixed results highlight the need for rigorous evaluation and adaptation to ensure these investments have maximum impact.
Well said. Tackling homelessness requires a multi-faceted strategy. Homekey is a start, but continued monitoring and refinement will be key to optimizing the program and translating early successes into lasting solutions.
The Homekey program’s ability to rapidly create new homeless housing is certainly a positive, but the long-term outcomes will be crucial. Ensuring these converted properties remain viable and supportive for residents in the years ahead will require sustained focus and resources from state and local governments.
Agreed. The speed of Homekey’s implementation is impressive, but the long-term viability of the housing created is just as important, if not more so. Ongoing monitoring and flexibility to adapt the program based on lessons learned will be essential.
As a resident of California, I’m eager to see the Homekey program succeed in providing stable, supportive housing for those in need. The speed of implementation is impressive, but the long-term sustainability concerns are valid. I hope the state can learn from both the wins and challenges to improve the program over time.
Addressing California’s homelessness crisis requires innovative solutions, so Homekey’s rapid creation of new housing units is commendable. However, the program’s long-term sustainability and ability to provide stable, supportive living environments are critical considerations. I’ll be closely following the state’s efforts to refine and scale this initiative effectively.
Interesting to see the mixed results of Newsom’s Homekey program. While it has helped create much-needed homeless housing quickly, the challenges around implementation and long-term sustainability are concerning. I wonder how they can improve the program to ensure better outcomes across the board.
You raise a good point. Rapid conversion of motels into housing is a creative solution, but the long-term viability of these projects will be crucial. Careful planning and funding for operations and support services seems essential.
This is an ambitious and much-needed initiative, but the mixed results underscore the complexities of addressing homelessness. I’m curious to learn more about the specific factors that contributed to the successes and failures of different Homekey projects. Evaluating those details could help inform future program improvements.