Project HomeKey to Flip Milpitas Motel into Long-Term Housing

Santa Clara County has secured $29.2 million from California’s Project HomeKey to convert an Extended Stay America in Milpitas into permanent homes for the homeless.

Gov. Gavin Newsom announced the funding Monday during his weekly “Newsom at Noon” press briefing. Project HomeKey—and its predecessor Project RoomKey—have been a key part of Newsom’s pandemic response to protect medically vulnerable homeless individuals from contracting Covid-19.

The California Department of Housing and Community Development plans to allocate $550 million by the end of this year to help local governments rehabilitate hotels, motels, vacant apartments and residential care facilities to house homeless individuals and families. The latest round of cash, which totals $236 million, will help 12 local jurisdictions and one tribe secure 1,810 new units across the state.

“There’s simply not a state in America that’s committed to this kind of capital infusion to purchase motels and provide for permanent supportive housing for homeless individuals,” Newsom said during his presser earlier this week.

In Milpitas, Project HomeKey will help transform the 146-room Extended Stay America at 1000 Hillview Ct. into 132 apartments for formerly homeless residents. The new development will be aptly renamed Hillview Court.

“This funding comes at a time when the need for affordable housing is greater than ever, as the current pandemic exacerbates the challenges being faced by our most vulnerable residents,” Santa Clara County Supervisor Cindy Chavez said in a news release about the funding. “Service-enriched permanent housing is a proven solution.”

The county’s Office of Supportive Housing worked with nonprofit Destination: Home and developer Jamboree Housing Corp. to submit the application for funding to the state.

“Housing is the true solution to homelessness, and this unique project will allow us to immediately bring people inside into permanent housing for our most vulnerable neighbors,” Destination: Home CEO Jennifer Loving said in a statement.

On top of the 132 apartments, Hillview Court will have two additional managers’ units and onsite supportive services, according to an Aug. 25 memo from Milpitas Building Safety and Housing Director Sharon Goei.

Some of the existing ground floor rooms will be converted into a community area with space for a kitchen, laundry, multipurpose rooms, counseling rooms, case management offices, wellness classes, educational programs and more.

Milpitas Mayor Rich Tran told San Jose Inside that “the funding has been really done at a speed [he has] never seen for housing for the unsheltered homeless."

“I am almost shocked that our city has been awarded such a valuable amount of money,” he added. “We continue to ask for government dollars at the state and the county level so we can build more housing for the homeless.”

Milpitas Vice Mayor Bob Nuñez, who serves on the City Council's housing subcommittee said the Hillview Court project is “significant headway in our fight to end homelessness.”

“I could not be more proud of how staff has represented the City of Milpitas,” Nuñez added. “We are part of a multi-agency partnership and the Homekey program that will transform lives. This is truly a unique opportunity to address critical housing needs.”

The city of Milpitas plans to hold a number of community meetings in the coming weeks to discuss more details of the project.

Grace Hase is a staff writer for San Jose Inside and Metro Silicon Valley. Email tips to [email protected]. Follow her on Twitter at @grace_hase. Or, click here to sign up for text updates about what she’s working on.

23 Comments

  1. > Project HomeKey to Flip Milpitas Motel into Long-Term Housing

    Concentrating and warehousing other people’s vagrants, drug addicts, and mental cases on a half a square block in your community for $220,000 per unit.

    The “homeless problem” is solved, right?.

  2. Readers can get more context from two other recent articles in SJI on this topic (https://www.sanjoseinside.com/news/temporary-housing-is-a-downpayment-on-homelessness-goals-san-jose-officials-say/; https://www.sanjoseinside.com/news/california-cities-counties-target-homelessness-with-newly-launched-project-homekey/). In addition, a recent piece in San Jose Spotlight, reported that a Homekey project in San Jose received a $14.5 million state grant to be used to produce 76 units destined for low-income, senior and homeless residents (https://sanjosespotlight.com/san-jose-makes-dent-in-low-income-housing-shortage-with-grants-developments/#comment-24045). The unit cost in that case is $190,789 as compared to the Milpitas motel transformation project estimated unit cost of $221,212.

    While both these costs seem reasonable for producing a housing unit around here, it isn’t clear what accounts for the difference between them. Moreover, the average unit cost for all 478 units (costing a total of $71.5 million) cited in the Spotlight piece is just under $150,000. It would be very interesting to investigate what accounts for these differences. (Maybe it’s the size of the unit, differing land prices in the different locations or other factors.)

    Beyond this, the important point is that the rate of production of affordable housing for the houseless (who number upwards of 10,000 in the county) and the housing burdened, i.e. those individuals or households who pay more than 30% of their incomes for housing (https://oehha.ca.gov/calenviroscreen/indicator/housing-burden)–who number in the hundreds of thousands is sclerotic. With one-third of homeowners and almost half of renters in Silicon Valley being housing burdened (https://siliconvalleyindicators.org/data/place/housing/housing-affordability/housing-burden-percent-of-households-with-housing-costs-greater-than-30-of-income/), you’d think our representatives would think bigger.

    But the number of projects cited in the reference articles number less than 1,000. It is useful to note that Measure A (2016), which was lauded as a significant initiative ($950 million in bond issues), only envisions creating about 4,800 affordable units over a 10-year period (https://www.sccgov.org/sitesoshHousingand CommunityDevelopment/ AffordableHousingBond/Pages/home.aspx). That’s less than half the homeless population in 2020 and it achieves this through public debt rather than by taxing wealthy households and/or major corporations located in Santa Clara County.

    Of course, there are already existing affordable units and some number of affordable units being built via the private sector, so this is only a partial picture. It would help a great deal if San Jose Inside could provide a general quantitative framework of total affordable units in the city and county and their disposition to allow readers to understand the extent of the housing problem and the size and scope of public sector responses and remedies.

    From the looks of it, the political leadership around here is hopelessly incrementalist and tactical rather strategic in vision. That they are beholden to the powerful interests that fund their campaigns and write their legislation–including real estate and financial industries–no doubt explains their half-measures masquerading as progressive social policy.

  3. Very wonky and thoughtful Econoclast. You’ve proved that you’re caring and analytical. Five Brownie points for you!
    However, for omitting the bulletin, being truthful, and telling it like it is the Galtie goes to… (drumroll)….
    SanJoseOutsideTheBubble!!!!!

  4. Hmm. This is interesting. SJI’s robo comment checker/poster must be programmed to watch out for certain words…words like , like “swell” and “‘so’s you’re old man”!

  5. > However, for omitting the bulletin, being truthful, and telling it like it is the Galtie goes to… (drumroll)….
    SanJoseOutsideTheBubble!!!!!

    Well, OK. Whatever.

    But I was saving the spot on my mantle for the Nobel Peace Prize.

  6. Mr Bubbles

    $220k per hotel unit. And calling a hotel room a unit is generous. However this is far cheaper than the $600k SROs they just built from scratch last year. Ive stayed at that place once in Milpitas, wasn’t too cheap, if I remember correctly. I guess the Rona took them out.

  7. This would be the end of our peaceful quiet and safe neighborhood that we worked a lifetime for. Neighbors are livid. This is not over.

  8. Econoclast, you say “costs [around $200k per unit] seem reasonable for producing a housing unit”, but nothing was actually produced, only repurposed from hotels to deed-restricted housing. So the pandemic can be a bonanza for affordable housing since the travel industry withered away. New housing costs close to $500k per unit no matter how affordable it’s designed to be.

    Then you say Measure A “achieves this [“creating” affordable units] through public debt rather than by taxing wealthy households and/or major corporations”. What nonsense. Measure A was a bond authorization backed by an ad valorem tax (a percentage of assessed valuation) on all the property in Santa Clara County, including housing for rich and poor and substantial amounts of corporate real estate.

  9. At this rate, we need over $2,000,000,000 (Yes, billion) just to build housing for the current homeless in Santa Clara County, without addressing those who are ‘housing burdened’. Assuming we don’t have any new homeless between now and 10 years from now.

    That does not include the hundreds of million we will need every year to pay for the forever cost of the 10,000 free homes, you know, gas, electric, water, sewage, maintenance, insurance, security, trash removal. Plus most of these buildings end up managed by NGOs who also expect to be paid.

    Politician’s are great at spending, but they aren’t really solving any problems. There needs to be a plan that requires personal responsibility from the people being housed. Providing short-term help to get themselves back on their feet and self-sufficient. When you hear about the people who have been in free housing for years and decade, it’s obvious this is not even a consideration.

  10. > deed-restricted housing

    What is “deed-restricted housing”?

    Who can restrict a deed?

    What restrictions can “they” put on a deed?

    What is the legal authority for restricting a deed?

    How come deed restrictions don’t violate the “takings clause ” of the Fifth Amendment?

  11. Mr Bubble, I think one could make the case that adding a restriction to the deed could lower its market value and if the owner could demonstrate damages, it should be regulatory taking. If the city purchases the property and then restricts their own deed and allows Project HomeKey use it under that deed, I do not think that would be an issue. It would not surprise me though if it costs $200K per unit just to force (pay, bailout?) the current owner to change the deed language and the city still not own the property.

  12. As for the property values in the area, well they I guarantee will go down. Also it should be made only homeless american citizens get housed, no illegal aliens should get this benifit over a citizen. But that will never happen, it will be filled with illegal aliens that broke the law to be here and continue to break the law. Drug use and sales will be prevalent and trash throughout the place. They can not even keep their area clean where they are at now, or keep from burning it up. This is a bad idea at best.

  13. Why should taxpayers be expected to shoulder the entire financial burden of providing permanent lodging for homeless? Is there a time limit on how long tenancy can linger? “Build it and they will come”- for sure, the takers are on their way to claim their free lodging as the producers move away. Was a survey or vote of the local residents and taxpayers done, obviously not.

  14. I know I am going to take a LOT of flack for saying this. We are spending too much money on people that we really want DEAD.

    And I really do mean DEAD.

    We really don’t give a squat about homeless people and people in nursing homes. If we did then they wouldn’t be there in the first place.

    We don’t want people hanging around in nursing homes and homeless people living out on the street. If COVID takes them out then while I am the first to admit that I don’t wish bad luck on anybody then I will admit that I am not going to lose sleep on it if then die off a couple of months or years early.

    Reality check, Homeless people living out on the street tend to have mental or drug problems. (Note: I didn’t say all). If a chronic homeless drug addicts who really isn’t contributing to society and likely to die off with or without COVID just happen to die a little bit early then I am not going to lose sleep over it. (Note: If you want to try to get substantive drug programs that actually work then I am all ears but I haven’t seen one)

    Old and unhealthy people die. That’s unfortunate but you see people have a nasty tendency to die. They really do.

    As it stands now, we are spending more and more money on dysfunctional people and other parts of the country are going to send their problems to San Jose. You can take it to the bank.

  15. I do have concern of our neighborhood’s safety with this project , do we get to vote on this project ?

  16. How about giving each future resident of the property $100,000 (1/2 the cost per unit) in exchange for them signing a contract that will prohibit reentry into California for 20 years and a requirement for them to immediately leave California. This removes the problem and the ongoing cost of the problem and gives the problem a stake to get started somewhere else as well as the ability to buy that ticket to somewhere else.

  17. How about purchasing a hotel in Texas, Nevada, or anywhere else that has less costly housing and using the money to fix up that property and moving the homeless to that property. After all since they are homeless any place they can hang their hat will be home. Not only that with the lower costs associated with almost everywhere else in the U.S. the amount of housing could be doubled and twice as many homeless could have new homes. Why choose the most expensive place in the U.S. to try to house homeless individuals?

  18. We’ve shipped our jobs to China, India, Pakistan our junk to Bangladesh. Why can’t we send our homeless, insane, drug addicts’ and drunks to them for a fee?

  19. Milpitas is a city without many homeless. Relocating homeless people to such a city is a terrible idea which is not good for both the city’s residents and the homeless people who might not feel comfortable in Milpitas.

  20. R.C. kinda true. It will snowball. Milpitas library has many nice bathrooms and computer screens, and cool shady corners and big chairs. Homeless dream come true.

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