Ongoing, collaborative efforts to create additional permanent affordable homes with supportive services for people experiencing homelessness in San Diego will receive another infusion of state funding with the award of $35 million from the Homekey program to the San Diego Housing Commission (SDHC).

The Homekey funds will support SDHC’s proposed purchase of an extended-stay hotel property on Hotel Circle, which will be converted into affordable homes with supportive services, in collaboration with the City of San Diego and County of San Diego.

“Housing ends homelessness, and this latest funding award will help us house more than 160 San Diegans and provide the services they need to remain stably housed,” Mayor Todd Gloria said. “I applaud Governor Gavin Newsom for this critical assistance and am grateful for the partnership of the Housing Commission, the County, federal partners, and the City Council in making the Homekey program a success in San Diego.”

The purchase and rehabilitation of the property at 2087 Hotel Circle South, to be known as Presidio Palms, will create 161 affordable rental apartments, all of which will serve people experiencing homelessness.

“Creativity and innovation are essential in solving our housing and homelessness crisis. The Homekey program has provided the tremendous opportunity to create affordable homes incredibly fast for San Diegans, meeting the moment of today’s need for housing. This new award shows just how fruitful collaboration between the City, the Housing Commission, and the County can be, and most importantly will result in lifting 161 of our neighbors out of homelessness and into housing,” City Council President Sean Elo-Rivera said.

“I want to thank Governor Newsom for granting this Homekey Award, which will help reduce homelessness in my district,” said City Councilmember Stephen Whitburn, who represents District 3, where the Hotel Circle property is located. “The best way to help people off the streets is to provide them housing and services, and many people will benefit from this opportunity. I congratulate and thank the San Diego Housing Commission for successfully applying for this funding.”

The City’s investment in this project includes federal project-based vouchers and funding from the American Rescue Plan Act garnered for the City with the support of U.S. Rep. Scott Peters.

“Our national housing and homelessness crisis demands that we snatch every opportunity presented to us to build more housing everywhere for everybody. That's why when asked to lean in to help get this deal done, I was glad to do it. Thank you to everyone who worked hard to make this happen and to the Governor for selecting this project to fund. I look forward to the day its doors are opened so more people have a safe place to live,” Rep. Peters said.

The County Board of Supervisors has also approved capital and services funding to support this project.

“California's Homekey program is more than just providing housing; it's about giving dignity, security, and hope to those facing housing instability. San Diego County is dedicated to partnerships and funding to keep families, seniors, and veterans housed. With an extra $35 million in Homekey funds, the State is creating over 600 affordable apartments in San Diego, helping those experiencing homelessness. The opening of Presidio Palms shows the power of teamwork, marking another step towards caring and inclusive communities,” said Nora Vargas, Chairwoman of the San Diego County Board of Supervisors.

SDHC has committed 161 rental housing vouchers to help residents pay their rent at this property. SDHC will request approval from the SDHC Board of Commissioners, subject to review by the San Diego City Council, sitting as the Housing Authority of the City of San Diego, to accept and expend the funds for the purchase and rehabilitation of this property before proceeding.

The San Diego community provided broad support for SDHC’s application for Homekey funds, with many organizations submitting letters in support to the state. These organizations included the Asian Business Association of San Diego; California Restaurant Association’s San Diego County Chapter; East Village Association; Downtown San Diego Partnership; Forever Balboa Park; Little Italy Association; Lucky Duck Foundation; San Diego Black American Policy Association Foundation; San Diego Food Bank; San Diego Padres; and San Diego Regional Chamber of Commerce.

In the current round of Homekey funding, the state allocated $41.1 million for the San Diego region. However, with the new award announced today, the state has awarded nearly $15 million more than that amount—$55.75 million—to San Diego in this round alone.

In addition to the Homekey funds awarded for Presidio Palms, San Diego has received more than $70.2 million from the Homekey program, including previous rounds of funding, to create 447 affordable homes:

• Pacific Village. In September 2023, the State awarded $16.85 million for SDHC’s purchase and rehabilitation of a hotel property at 3737-3747 Midway Drive in the Midway Community to create 62 affordable single-room occupancy (SRO) units with supportive services . SDHC committed 62 rental housing vouchers to help the residents pay their rent.
• Abbott Street Apartments. Also in September 2023, the State awarded an additional $3.9 million that will support SDHC’s collaboration with Wakeland Housing and Development Corporation to rehabilitate a vacant multifamily housing property at 2147 Abbott Street in Ocean Beach to create 13 affordable homes . SDHC awarded housing vouchers to help residents pay their rent.
• PATH Villas El Cerrito: In 2022, the State awarded $11.83 million in Homekey funds to help finance the development of 40 new affordable rental apartments at 5476 El Cajon Blvd. in the El Cerrito neighborhood. The development is a partnership among PATH Ventures, Family Health Centers of San Diego and Bold Communities. The City and County also allocated funds to this development, with the County committing additional funds for supportive services. SDHC awarded housing vouchers to help the residents pay rent.
• Kearny Vista and Valley Vista Apartments: During the pandemic in 2020, in the first round of Homekey funding, the state awarded $37.7 million to SDHC toward the purchase of two extended-stay hotel properties. The City also allocated funds toward the purchase of these properties, and the County allocated funding for supportive services. Today, the properties continue to provide 332 homes with supportive services and housing vouchers to help residents pay their rent.

The Homekey program provides an opportunity to bring much-needed housing online faster and cheaper than traditional new-construction affordable housing. Thanks to funding and regulatory streamlining from Homekey, San Diego has a unique opportunity to get people out of encampments and shelters and into permanent homes in months rather than years.