SAN FRANCISCO—On December 21, the California Department of Housing and Community Development announced that San Francisco was awarded $54.7 million in capital and operating costs from the State’s Project Homekey to purchase a 160-room residential building at 1321 Mission Street to operate as Permanent Supportive Housing (PSH). The $54.7 million is in addition to the $76.89 million that the city was awarded in 2020 Homekey funds to purchase and operate Hotel Diva and the Granada Hotel.

The acquisition of the hotel is part of Mayor Breed’s Homelessness Recovery Plan, which includes the largest one-time expansion of PSH in 20 years.

The announcement applies to the next round of $113 million in Homekey funding for five projects statewide. Homekey, backed by $1.3 billion in newly available and eligible funding through the State budget allows for the largest expansion of housing for people experiencing homelessness in recent history while addressing the continuing health and social service needs of homeless residents, which were exacerbated by the COVID-19 pandemic.

Acquisitions of hotels to house former homeless residents is a key part of the Mayor of San Francisco’s plans to expand permanent supportive housing in San Francisco. The city already purchased online over 360 units of PSH through the 2020 Homekey Grant Program at Hotel Diva and the Granada Hotel, and this Fall, the Board of Supervisors and Mayor authorized the Department of Homelessness and Supportive Housing (HSH) to acquire and convert three more existing properties into supportive housing in Districts 11, 9, and 6, which will add an additional 237 units. San Francisco continues to explore more options for purchasing sites.

“The Mayor and Governor believe that housing is the solution to homelessness,” said Shireen McSpadden, Executive Director of the Department of Homelessness and Supportive Housing. “It is critical that we provide more housing, shelter, prevention and diversion for those experiencing homeless in our community.”

“We have a unique opportunity right now to direct both state and local resources to tackle one of our most pervasive issues: homelessness. This $54 million in Homekey funding is a huge win for our city. We need to urgently deliver on increasing permanent supportive housing stock in San Francisco and transitioning people off the streets and into housing,” said District 6 Supervisor Matt Haney.

In a press release from the Mayor’s Office, it notes that the city of San Francisco is committed to acquiring or leasing 1,500 new units of PSH and expanding shelter options for people living outdoors. In total, San Francisco will ensure a total of 6,000 placements in housing and shelter are available for people experiencing homelessness, including 4,500 placements in PSH.