S.F. has an unprecedented $1.1 billion to spend on homelessness

[Pedestrian]

The pressure is on to make a difference
Trisha Thadani
July 16, 2021
Updated: July 16, 2021 4 a.m.

. . . the city has a combination of onetime federal and local funds to pour into homeless services. The pot also includes about $800 million from Proposition C, a controversial 2018 business tax that is finally free to use after years of being tied up in a lawsuit.

Now, advocates and city leaders say, San Francisco is in an unprecedented position to make a tangible difference on the city’s streets.

But the historic investment is also presenting the city with a tenuous question: If this doesn’t make a difference for the city’s homeless, then what will?

San Francisco has thrown significantly more money at the crisis over the past few years, but the issue has only grown. From 2016 to 2019, homelessness spending in each two-year budget swelled 83%, from about $200 million to $360 million. At the same time, the number of homeless people grew from about 6,000 to more than 8,000, a 33% increase.

Prop. C expands that spending significantly. The measure — which taxes the gross receipts on large corporations — collects about $250 million to $300 million for homeless services each budget cycle. The money in the upcoming budget, which will be finalized in August, is unusually large because it includes an extra $500 million from the past two years that was tied up in court for years due to a lawsuit over the tax.

After months of haggling over the details, the Our City, Our Home committee, which oversees the funds, reached a deal with the mayor and board last month on how to dole out the money. Among their planned investments: funding for at least 825 units of new housing, 650 rental subsidies, over 1,000 new shelter beds, about 200 tents in sanctioned sites and several new street outreach teams.

Shanell Williams, chair of the committee, said the spending plan was carefully crafted over several months with the input of more than 800 people, primarily those who are homeless or formerly homeless. She said the money will “make a huge difference” . . . .

“With all this money we have to invest in homelessness, there is no way that we shouldn’t be able to be more effective,” [Mayor] Breed said in a recent interview . . . .

She also said that, without a similar investment in surrounding counties, San Francisco could attract more unsheltered people to the city. That concern is not substantiated by the city’s most recently available data, which showed that 70% of the city’s homeless in 2019 were last housed in San Francisco . . . .

City officials are working on creating a public database to track metrics, such as how many people have been placed into housing and how many new units have been built or acquired.

Along with Prop. C, the upcoming $1 billion-plus budget also includes tens of millions of dollars in one-time funding from federal emergency assistance due to the pandemic, local bond money and the city’s general fund. The city is also expecting a chunk of money from the state, which has yet to be finalized.

Matthew Doherty, the former director of the United States Interagency Council on Homelessness, said San Francisco’s funding for homelessness is “close to unprecedented” for a city.

“It is the kind of investment that can really make a difference,” said Doherty, who now works as a consultant. “And the fact that it is an ongoing and predictable source of revenue for upcoming years, so they can plan for other investments, is not something that many communities have.”

Joe Wilson, the director of Hospitality House, a shelter in the Tenderloin, called Prop. C a “once in a generation” investment.

Yet, he still remains skeptical it will be enough . . . .

https://www.sfchronicle.com/bayarea/...d-16318448.php

What would be enough? Can any amount ever be enough?

[bossabreezes]

This will do a grand total of nothing. Nice try but this money would be way better spent doing something productive but why be productive when you can virtue signal, ya know?

[Pedestrian]

Originally Posted by bossabreezes

This will do a grand total of nothing. Nice try but this money would be way better spent doing something productive but why be productive when you can virtue signal, ya know?

Unfortunately, I almost agree. But the money won't do "nothing". It will likely set up comfy retirement plans for some highly paid non-profit executives and their staffs and it will employ some in the construction industry building that 850 units of housing (I wish they'd specified exactly how much that's costing but I'll be it's costing way more per square ft than most here paid for their homes).

By the way, most here should be able to read the entire article and I recommend you do. If you do, you will discover the story of a lady who is currently occupying a free studio apartment but is "holding out" for a spacious free one-bedroom on threat of . . . what exactly? Camping on the sidewalk in front of the Mayor's house?

[mhays]

In Seattle, a lot of federal dollars have gone toward buying hotels. Some have happened already and others are coming soon.

I doh't know the details, but this seems like a great way of getting a lot of housing very quickly and relatively cheaply.

King County (Seattle and the closest additional 1.5 mil) has shown new leadership on homelessness. That's probably a big reason why these acquisitions are around the region rather than centralized -- Auburn, Bellevue, Renton, etc. Including some earlier Seattle purchases (at least one was a newly-completed for-profit micro housing building), the number of units is pretty decent.

The savings isn't a panacea. The buildings generally aren't built to the same longevity/durability standards for example, and some are pretty old.

[Pedestrian]

Originally Posted by mhays

In Seattle, a lot of federal dollars have gone toward buying hotels. Some have happened already and others are coming soon.

I doh't know the details, but this seems like a great way of getting a lot of housing very quickly and relatively cheaply.

King County (Seattle and the closest additional 1.5 mil) has shown new leadership on homelessness. That's probably a big reason why these acquisitions are around the region rather than centralized -- Auburn, Bellevue, Renton, etc. Including some earlier Seattle purchases (at least one was a newly-completed for-profit micro housing building), the number of units is pretty decent.

The savings isn't a panacea. The buildings generally aren't built to the same longevity/durability standards for example, and some are pretty old.

San Francisco did that. In fact, the state of California, flush with a huge budget surplus, has appropriated funds to be passed out to cities to do more of it. So far SF has completed the purchase to 2 hotels I believe. But you've got to have willing sellers and that's getting tougher as the tourist industry begins to come back.

California spent $850M on inns for homeless
Buying spree came as federal funding expired
Los Angeles /
January 04, 2021 03:30 PM
By Matthew Blake

Hotel sales in California fell through the floor in 2020, but a state-run spending spree produced dozens of deals at year’s end.

Gov. Gavin Newsom announced last week that the state used money from the federal CARES Act to help purchase 94 hotels, which are intended to house homeless people. The buying frenzy was prompted by the expiration at year’s end of federal money for the Project Homekey program.

State government put $846 million total toward the purchases, with $750 million coming from CARES Act funds. (Another $50 million came from state general revenue funds, and $46 million from philanthropic contributions.)

Not clear is what sums hotel operators, which include local government bodies and nonprofits, added to the purchase of the hotels. The state won’t have the total cost “until sometime in February,” said a spokesperson for the governor’s office.

For some hotels, the state may have handled all purchase costs, while handing over the inns to applicants such as the Housing Authority of the City of Los Angeles.

But other buys required supplemental money. For the Extended Stay America in Santa Clara County, the state paid sellers Blackstone and Centerbridge Partners $29.2 million as part of a $65 million purchase, according to a lending record provided to TRD.

The record indicates that Santa Clara County spent $20 million of its own money, and nonprofit Jamboree Housing Corporation took out a loan to cover the rest.

The governor’s office has disclosed how the state allocated the $846 million to local hoteliers. Twenty Los Angeles County hotels received chunks of that money including $20.8 million to a Holiday Inn in Long Beach and $16.2 million for a Motel Six in Hacienda Heights . . . .

Newsom has billed Project Homekey as a way to permanently house the homeless, noting that the 94 hotels add up to 6,029 hotel rooms — with each room potentially serving as a long-term residential unit. It would be the applicant’s obligation to add a kitchen.

The state’s latest effort to address its homeless crisis is a cousin of Project Roomkey, in which hotels are paid to house homeless on a temporary basis . . . .

https://therealdeal.com/la/2021/01/0...-for-homeless/

San Francisco is moving forward in the construction of permanent homeless housing.

The city purchased Hotel Diva using a $29.1 million share and awarded a $45 million grant for the Granada Hotel with the intent to transform these buildings into permanent supportive housing. These purchases are all a part of Mayor London Breed’s Homelessness Recovery Program that she announced back in July 2020, aiming to create up to 6,000 housing placements for people experiencing homelessness within the next two years.The Homelessness Recovery Program proposes the largest one-time expansion of permanent shelter housing in San Francisco in 20 years.

https://goldengatexpress.org/96600/c...rtive-housing/

[jmecklenborg]

"I know Darth Vader's really got you annoyed/But remember if you kill him then you'll be unemployed..." - Weird Al

[Crawford]

They really purchased 94 hotels? Geez.

IMO most money directed towards "homeless services" is money thrown down a rat hole.

[Pedestrian]

Originally Posted by Crawford

They really purchased 94 hotels? Geez.

IMO most money directed towards "homeless services" is money thrown down a rat hole.

With $25 billion in federal stimulus en route and an estimated California budget surplus of $76 billion, per Gov. Gavin Newsom (the Legislative Analyst’s Office puts it around $38 billion), lawmakers are making bold plans to spend that cash down.

https://calmatters.org/economy/2021/...-surplus-game/

They are choking on money in Sacramento (remember how people said CA was broke?) and they gotta spend it somewhere (they think). They are also sending $600 checks to people making under $75,000/yr. Giving it back to the people they dragooned it from never crossed their mind I'm sure.

[SFBruin]

It's really an ongoing cost, right?

Like, even if $1 billion plus is enough to house every homeless person in SF for 5 years (rough estimate), then another several hundred million dollars will be needed for year 6.

Right?

[SFBruin]

I legit think SF's "we'll accept anyone from anywhere (as long as they can pay rent)" political philosophy kind of guarantees a homeless problem.

It basically guarantees that they will have an oversupply of residents, unless they go through an 1800s New York-style building spree, which I guess they could do.

[Pedestrian]

Originally Posted by SFBruin

It's really an ongoing cost, right?

Like, even if $1 billion plus is enough to house every homeless person in SF for 5 years (rough estimate), then another several hundred million dollars will be needed for year 6.

Right?

It's a mixture. Whatever money they spend on constructing housing and shelter spaces is a one-time capital cost. But there will be ongoing costs to maintain and operate what is built. It looks like a lot of the $1.1 billion is going to be spent on such one-time costs.

But the good thing, I suppose (assuming you don't think it's money down a rat hole) is that with Prop. C money now available (read the original article to understand that) the city will have about $650 million ($350 million they've been spending plus $300 million in new Prop. C money) coming in each year to spend on the ongoing costs.

[Northern Light]

Originally Posted by Pedestrian

https://www.sfchronicle.com/bayarea/...d-16318448.php

What would be enough? Can any amount ever be enough?

You need to work backwards in answering that question.

How many people ARE homeless in SF right now?

What is a reasonable cost to get them housed, in the most basic, but decent housing, either by building it; or renting on the open market?

Multiply A x B and you get the right amount for the moment.

It then becomes a separate issue as to how to avoid repeating the problem.

****

In general, housing people 'permanently' ie some form of public housing, institutional housing, or a private apartment where that makes sense, tends to cost less per month and per day than a shelter bed.

Therefore I lack enthusiasm for investing in net new shelter beds.

Shelter Beds are for tonight, so to speak, not for the month.

The effort when someone falls that far, for whatever reason, needs to be to re-house them, properly, with a fixed address, private accommodation, their own bathroom, their own fridge, their own keys, wherever practical.

****

Looking at 1.1B........I'm not sure what the numbers crunch out like in SF.......but I tend to think you ought to be able to must (at-cost) a permanent housing unit for $250,000 even in an expensive City.


That would be 4,400 permanent housing units, not 825

That also doesn't include the option of leveraging, (debt-financed construction), whereby you transfer the subsidy tied currently to shelter beds, to operating new permanent housing, but while financing over 20-30 years.

In that context, you might reasonably expect a lot more than 4,400 units.

[Gordo]

$250k per unit in SF? lol no

[Northern Light]

Originally Posted by Gordo

$250k per unit in SF? lol no

I can't say if that number is right for SF; I can say it works in Toronto; which has very high real estate prices in a North American context.

The object, remember is not paying market for a condo for someone; its building at-cost, typically on land already owned by the government, so you avoid the land-cost.

You do that using vacant/surplus land, but also building on top of schools, sites that are now shelters, or low-density public housing etc.

Another leverage tool is sharing that surplus land w/the private sector........on a lease-basis (say 99-years), and they can build market housing, so long as 'x %' number of units are deeply affordable.

At any rate, I'm not tied to the 250k number. That was simply to put a number out there.

I think its fair to say, it costs the City more to sustain things the way they are in the long term (homelessness, shelters, associated health, unemployment and crime costs) vs housing people properly.

For further clarity, there's more mileage to be gained out of the 1.1B than there is currently; but yet, a bigger number probably is necessary to get the City to a better place.

[SFBruin]

Originally Posted by Pedestrian

It's a mixture. Whatever money they spend on constructing housing and shelter spaces is a one-time capital cost. But there will be ongoing costs to maintain and operate what is built. It looks like a lot of the $1.1 billion is going to be spent on such one-time costs.

Oh, I see.

If these are one-time costs, does this mean that this is public housing?

[Camelback]

Calling all homeless, calling all homeless, now hear this: now is the time to relocate to SF!

[Pedestrian]

Originally Posted by Northern Light

You need to work backwards in answering that question.

Looking at 1.1B........I'm not sure what the numbers crunch out like in SF.......but I tend to think you ought to be able to must (at-cost) a permanent housing unit for $250,000 even in an expensive City.


That would be 4,400 permanent housing units, not 825

That also doesn't include the option of leveraging, (debt-financed construction), whereby you transfer the subsidy tied currently to shelter beds, to operating new permanent housing, but while financing over 20-30 years.

In that context, you might reasonably expect a lot more than 4,400 units.

You are ignoring the costs of employing the huge number of professional “homeless advocates” that infest San Francisco. You are also forgetting the high maintenance and operating costs of property inhabited largely by the drug addicted and mentally ill. And there are those who simply cannot manage their own lives—shop for and safely prepare food and so on. For this reason, San Francisco puts social and medical services in its housing for the formerly homeless and that isn’t cheap.

I’m not arguing with the proposition that you ought to get a lot of housing for over a billion $ but addressing the homeless problem is far from being just about building rooms and handing over the keys.

[Pedestrian]

Originally Posted by SFBruin

Oh, I see.

If these are one-time costs, does this mean that this is public housing?

Sure it’s public housing but unlike “regular” public housing, where occupants usually pay some rent based on income and families get preference, this would be for single adults with virtually no income except whatever benefits they may qualify for and so there would be no rent charged. Also, as I keep saying, since there’s a high proportion of them who are mentally ill or substance addicted, this housing would probably come with outpatient mental health and possibly addiction treatment services in the building. Finally, I think people given a room or apartment in this housing would actually have to be homeless when first encountered whereas people in regular public housing qualify based on family size and income. They don’t have to ever have been homeless and I think most have not been. Many have low income jobs.

[Pedestrian]

Originally Posted by Camelback

Calling all homeless, calling all homeless, now hear this: now is the time to relocate to SF!

I think you are onto why SF is so swamped with them in spite of offering any who want it a free bus ticket to Phoenix.

[jd3189]

It’s gonna take something groundbreaking on a city, state, and possibly federal level to deal with this issue sufficiently.