Helping Jurisdictions Leverage New Homekey 2.0 Funding

Homekey is back in 2022 and bigger than before, thanks to substantial funding from the American Rescue Plan Act (ARPA). The program has become the backbone of the Governor’s strategy to provide lasting solutions to homelessness: the FY 21 State Budget allocated $2.75B in ARPA and State General Funds towards a second and third round of Homekey.

Yesterday, Governor Newsom announced $45M in awards for two new Homekey projects in Sacramento and Los Angeles that will make 170 units available. Including these new awards, a total of $323 million has been awarded through the Homekey program for 1,208 units in 14 projects across the state. to learn about Homekey and LeSar’s engagement with the program.

The first round of Homekey originated in late 2020, growing out of Project Roomkey, which was California’s initial pandemic response to temporarily provide housing and shelter for persons at high risk for COVID-19 due to homelessness. Project Roomkey primarily focused on leasing then–vacant motels for temporary occupancy, simultaneously utilizing vacant rooms for those in need and providing a stream of revenue for motel owners also in need. Homekey then emerged, utilizing Coronavirus Aid, Relief, and Economic Security (CARES) Act funding that had to be expended by the end of 2020. Under these constraints, the State, led by the Department of Housing and Community Development, created a program that would acquire sites—still primarily motels—as long–term housing solutions for those that are homeless or at risk of homelessness.

The primary challenge regarding Homekey is its highly accelerated set of deadlines: recipients must expend program funds within eight months of award and complete development within twelve months. In return, Homekey offers significant capital and operating support.

LeSar has been engaged with a number of local jurisdictions as they prepare their applications for Homekey 2.0. We have found that partnerships between state and local public sector partners and a range of other organizations and companies is essential to realizing Homekey’s potential and ensuring its lasting impact. Here is a snapshot of our activities:

The County of Orange has been leading a Homekey application process building on terrific front-end preparation the County employed during the first-round experience from 2020. LeSar has assisted the County with its pre-application pipeline assessment and strategy, coordinating with city governments, and identifying partners and opportunities that will best meet the County’s objectives.

With the County of Los Angeles, LeSar has been supporting their approach to partner with providers and developers as co-applicants, drafting a request for statements of interest, vetting partners and sites for alignment with countywide objectives, and coordinating and providing technical assistance for all applications co-sponsored by the County.

Finally, on behalf of the City of Palm Springs and in partnership with Riverside County, LeSar is leading the development of a Homekey application for a new interim housing site on the City’s north end. The Palm Springs opportunity has utilized both LeSar’s Housing and Homelessness Solutions teams to address the programmatic, financial, and real estate challenges of this site.