San Jose gets $25M to convert downtown hotel for homeless

The City of San Jose will pay $25.2 million to convert a boutique hotel in Downtown San Jose for homeless housing under the state’s Project Homekey program.

The state grant will allow the city to buy the 90-room Arena Hotel at 817 The Alameda, the San Jose Mercury News reported. The three-story hotel, a short walk from the SAP Center, will house homeless men and women, and couples.

It marks the second hotel in the city purchased under the state Homekey program, which allows cities, counties and nonprofits to acquire hotels, apartments and other buildings and turn them into homeless housing.

“In 2016, San José pioneered a new approach to housing our unhoused neighbors by buying and converting hotels and motels into dignified living accommodations for our most vulnerable residents,” Mayor Sam Liccardo said in an emailed statement to the newspaper. “That model successfully moved thousands of San Joséans off the street.”

The state Homekey program doled out $846 million in 2020. In September, Newsom awarded another $2.75 billion through 2023, with about $200 million funneled to Bay Area projects in the first year. The program has so far supplied funding for 10,000 housing units.

If approved by the legislature, another $150 million proposed by Newsom this week will make $1.5 billion in Homekey grants available next year.

In 2020, San Jose received $14.5 million in Homekey funds to buy the Best Western SureStay motel, located near the airport. The motel gave vulnerable residents free rooms to shelter in place during the COVID-19 pandemic.

But the effort to turn the motel near into permanent housing stalled after a state lawmaker accused the city of proposing rents that would displace the very people it was supposed to help. Residents were warned they’d either have to pay $627 a month or find new accommodations, the newspaper reported.

Assemblyman Alex Lee, D-Milpitas, notified the state’s Department of Housing and Community Development, which agreed the rents were too high. The city disagreed, but said it would reassess its rent structure.

[San Jose Mercury News] – Dana Bartholomew