14 MONTEREY COUNTY WEEKLY JULY 13-19, 2023 www.montereycountyweekly.com Within a few months after the start of the Covid-19 pandemic, California officials launched a mad dash to permanently house thousands of people by converting motels and hotels into apartments under the name Homekey, using $646 million in federal, state and donated funds. The City of Salinas joined in that dash to open 101 apartments in a former motel but missed some procedural steps, leading to delays that have left the complex only about half occupied for the last two-and-a-half years. Homekey was an untested concept in 2020 that has since proved successful, but for Salinas there were lessons learned. Within two months of receiving $7 million from the state, city officials and a team of government and nonprofit representatives worked together to purchase and ready the former Good Nite Inn on Work Street for $12 million—the additional $5 million came from the buyer, nonprofit developer ShangriLa Construction. They welcomed 55 residents in December 2020, complete with supportive services provided by Shangri-La’s nonprofit partner, Step Up. Residents’ rooms were temporary until renovations were complete, with a plan to move in more people to fill all 101 units. Renovations had to stop after the U.S. Department of Housing and Urban Development issued a violation. Local officials missed the fact that because they were using HUD project-based vouchers, federal rules applied, including an environmental review under the National Environmental Protection Act. In July 2021, HUD officials gave the city the option to pursue a waiver. With 85 project-based housing vouchers worth approximately $30 million annually used to pay for supportive services and maintenance, city officials were prepared to jump through any hoops necessary, Salinas Housing Division Planning Manager Rod Powell says. That led to a two-year journey through a maze of regulations, including HUD requiring Shangri-La to perform a quitclaim on a sliver of the back parking lot, which is in a floodplain. Then state Department of Housing and Community Development officials noticed Shangri-La had transferred the main property to one of its holding companies without properly recording it. “We thought we were done only to have it called out by HCD,” Powell says. More hoops followed. Two years later, Powell says what’s left is asking the Salinas City Council for approval, along with the boards of Step Up and Shangri-La. If all goes to plan, renovations could be completed by next spring. After the success of Homekey’s first round of funding, California distributed round two funds last year, including nearly $20 million for two more Salinas projects now under construction, totaling another 101 units, also in conjunction with Shangri-La and Step Up. The city applied for round-three funding on June 30, this time in conjunction with Bay Area Community Services, to buy and renovate single-family homes to provide housing for low-income families. Red Taped Missteps have kept Salinas’ original Homekey lowincome apartments half full since 2020. By Pam Marino As of March, Homekey had created nearly 12,800 permanent and interim homes through 210 projects across California, including 101 units in Salinas’ first project (above). NEWS Renovations could be completed by next spring. DANIEL DREIFUSS
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