San Diego to begin assessment of plan to pay $383,000 per room in hotels for homeless people
Asher Notheis
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The San Diego Housing Commission has moved to ask for funding from the state that will allow them to buy three different hotels to help people experiencing homelessness, each room costing $383,192 on average.
The three hotels being purchased are all Extended Stay America Hotels, and will provide the commission with 412 hotel rooms to use. Part of the funding for purchasing these hotels will come from some funding from California’s Project Homekey, with the latest round of payments from the program setting aside $34 million for the San Diego region, according to the San Diego Union-Tribune.
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“When you can find a way to pick up 412 rooms and begin housing people and close in October, you have to be thrilled about the opportunity,” said Commissioner Eugene Mitchell.
This is not the first time the San Diego Housing Commission has sought to purchase hotels using Project Homekey funds, as the city council had previously approved the Commission’s plan to buy two extended-stay hotels in October 2020. The Hotel Circle South, which had 190 rooms, cost $67 million to purchase, or $353,000 a room, and a hotel in Kearny Mesa, coming with 142 rooms, cost $39.5 million to purchase, equating to $278,000 a room.
For this purchase, the three hotels would cost $40.7 million for a 107-unit hotel, $52 million for a 140-unit hotel, and $65.2 million for a 165-unit hotel. The proposed purchase of these hotels, which cost on average a little more than $383,000 per room, is more than the cost of the commission’s 2020 purchase.
Bob Rauch, who is from hotel operator R.A. Rauch & Associates, believed in 2020 that the previous purchases were not good deals, and believes this new proposed purchase has issues as well.
“They’re nuts,” he said. “They overpaid last time during a pandemic, and they’d be overpaying again.”
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The proposed spending by the San Diego Housing Commission comes shortly after Los Angeles Mayor Karen Bass (D) introduced her first budget at the State of the City address on April 17, where she recommended spending $1.3 billion next year to get homeless people into shelter and treatment programs.
The spending would be part of Bass’s goal to get the city to the point of being a “new L.A.” She is set to unveil the budget at City Hall on Tuesday.