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An additional $200 million for Project Homekey that was recently announced by Governor Gavin Newsom will include more than $56 million to fund four permanent housing projects across the Bay Area.

Project Homekey is a statewide initiative that buys different motels, hotels or apartment buildings and transforms them into a site for permanent or interim housing for unhoused residents.

Newsom, along with San Jose leaders Mayor Sam Liccardo, Assemblymember Ash Kalra and Councilmember Dev Davis, gathered this past Friday at the Bernal Monterey Emergency Interim Housing Community to tout the project’s success.

“By eliminating red tape and deploying more innovative, cost-effective construction methods, San Jose is showing how we can build housing in four months — where it previously took four years — at one-eighth of the standard cost of development.”

San Jose Mayor Sam Liccardo

“The $200 million will provide us with now $800 million total for this effort, 78 projects under contract, construction or completed in 45 jurisdictions in this state,” Newsom said.

The Bernal Monterey site is the first of three sites in San Jose to complete construction and provide unsheltered residents secure housing and various social services during COVID-19. The sites were funded by the state’s Homeless Housing, Assistance and Prevention Program and from the city’s Coronavirus Aid, Relief and Economic Security act allocation to provide 307 units.

“By eliminating red tape and deploying more innovative, cost-effective construction methods, San Jose is showing how we can build housing in four months — where it previously took four years — at one-eighth of the standard cost of development,” Liccardo said. “It will become a national model for saving lives and rebuilding communities.”

It is the same model as Project Homekey, which funds a similar type of housing along with supportive services for residents across the state.

Bay Area cities benefit

With the new funding, San Francisco received the most money — more than $29 million to transform a 130-room property into permanent housing with supportive services.

The city of Oakland was awarded nearly $17.5 million for two projects. One is the conversion of a recently rehabilitated hotel into 82 units for some of Alameda County’s most vulnerable residents. The other will provide 21 permanent housing units with supportive services, of which priority will be given to veterans with Veteran Affairs housing vouchers.

Santa Clara County was also awarded more than $9.5 million to acquire a 54-unit hotel in Milpitas that would eventually be developed into 110 units of permanent housing with supportive services.

However, the Milpitas City Council voted on Thursday night to sue anyone involved in the construction of the new housing project in attempt to block it, a move Newsom fervently disagreed with.

“I don’t want to see them walk away from that … That opportunity may never come back,” Newsom said about the City Council. “You are going to look back in your life and you are going to regret this … that you could’ve, should’ve, would’ve done the right thing and helped turn another human’s life around.”

Of the $200 million secured for Project Homekey, $81.4 million was released for the sixth round of awards, more than half going to the Bay Area. The remaining approximately $25 million was awarded to Los Angeles and San Bernardino counties.

To date, $709 million of the $800 million budgeted has been awarded to provide 5,068 units of housing. The average per-unit cost was $139,000 — well below the average cost to build new housing units in the state, according to Newsom.

Project Homekey started in July and is the state’s second phase of tackling the state’s unhoused population and the looming threat of thousands of evictions at the end of the eviction moratoriums.

The first phase was Project Roomkey, which temporarily housed over 22,000 Californians in hotel and motel rooms from April to September of this year.