FREMONT — The Fremont City Council unanimously approved Tuesday a plan to apply for a $40 million state grant to purchase a motel in the city and into permanent affordable housing for more than 150 people who are homeless or at risk of becoming homeless.
The city is hoping to secure the funding through Project Homekey, the state’s massive effort to quickly house thousands of homeless people and people earning very low incomes across the state in converted hotels, motels, apartment complexes and other buildings.
“We do have a homeless epidemic, and an affordable housing crisis. And we do have our homeless living on the streets without basic access to housing and all the other things that come with it,” Vice Mayor Raj Salwan said during the Jan. 18 council meeting.
“So this is one of the most important things we can do as city leaders, is to provide solutions for this issue,” Salwan said.
Fremont, a city where the median home sale price is currently about $1.4 million, counted among its residents more than 600 homeless people in early 2019, city and county reports said.
With the number of homeless people expected to rise in Fremont when another homeless census is taken this February, city leaders, staff, and some residents emphasized the dire need for creating more affordable housing.
“Homekey truly offers us an unprecedented opportunity to secure a significant amount of state funding, not only to provide permanent supportive housing for the chronically homeless, but also to do it within a year’s time,” Suzanne Shenfil, the city’s human services director said during the meeting.
The city has taken steps in recent years aimed at reducing homelessness, most significant of which was the opening of a homeless navigation center, which houses people without homes temporarily while assigning case workers to help them find permanent housing.
Fremont also runs a temporary winter shelter, a warming center, and a mobile hygiene trailer that offers people living in encampments access to laundry machines and showers.
“Many of the city’s initiatives related to homelessness have been designed to improve the quality of life of unhoused residents while they search for more permanent housing solutions,” Shenfil said.
“But, the ultimate need for hundreds of unhoused residents is the availability of permanent and affordable housing,” she said.
Through the Homekey program, the city is planning to partner with Los Angeles-based for-profit housing developer Shangri-La Industries, and Santa Monica-based nonprofit mental health services provider Step Up On Second Street, to purchase the Motel 6 at 46101 Research Ave. in Fremont, and convert it into permanent housing with supportive services for residents.
The motel has 159 rooms with “studio suite” layouts, according to city reports, and after the conversion, which would include adding kitchenettes to each room, there would be 152 to 156 rooms for resident apartments, with the other rooms being used for managers and staff who will live on site.
Because the rooms are studios, the building would “predominantly serve singles or perhaps couples,” but not large families, Shenfil said.
City staff said they expect a decision from the state’s housing department on whether Fremont will receive the grant by March. If the grant is received, conversion construction work would be required to be finished by March 2023, and residents would need to be moved in by June 2023.
The apartments would be reserved for the chronically homeless, with 10% of the apartments for chronically homeless people with serious mental illnesses, city reports said. People at risk of homelessness, who earn 30% or less of the average median income for Alameda County are also eligible, city reports said.
In Fremont, 30% of the median annual income is roughly $29,000 annually for a one person, and it’s about $41,000 for a family of four, according to Alameda County and federal data.
About 10 people called into the meeting Tuesday to say they support the project; no one called to oppose it.
Marie Hughes, a resident and a member of a group called Fremont For Everyone that advocates for affordable and inclusive housing, said the city has done a woeful job at producing enough affordable housing for people who earn low incomes, and supports the Homekey project.
“We are all aware that Fremont has a homeless problem, and that this problem has skyrocketed during the pandemic,” Hughes said.
“An additional 159 rooms of permanent housing would be a great addition to our arsenal to address this pressing problem,” she said.
The cost to purchase and renovate the motel is estimated at $33.4 million, according to city reports, and Shangri-La would receive about $31.8 million from the Homekey grant if it is approved.
The city has agreed to pick up the total cost for operations and support services at the building over the first five years of roughly $14.6 million. City staff said the Homekey grant application includes a $5.2 million request to cover some of the operating costs total.
The city council also approved putting aside about $9.4 million in city funds to cover the remaining costs, more than two-thirds of which would be from the city’s affordable housing funds, which are supported by new development fees.
Dan Schoenholz, the city’s community development director, said the city expects about $6.8 million of that chunk of city funds to ultimately be offset by outside funding sources, including a $3 million from Alameda County’s share of American Rescue Plan Act funding for housing.
The city is also hoping to pick up more state funding for operations through Homekey, including up to $10,000 per apartment by meeting incentives such as filing the application by the end of the month. Fremont could also could receive some funds toward the project from Measure W, the county half-percent sales tax increase approved by voters in 2020.
Jane Lin, a resident, is also a member of Fremont for Everyone. She said she was in favor of creating “a viable pathway” to permanent housing through this project.
“A resourced, compassionate city like Fremont should not have people sleeping on the streets,” Lin said.