The Sacramento County Board of Supervisors approved, at its Sept. 10 meeting, the staff recommendation to spend $19.4 million on two new, innovative projects designed to shelter and house people exiting homelessness directly off the American River Parkway.
The Department of Homeless Services and Housing originally announced the plans for the $25 million granted by the state of California last Thursday, and since the announcement, there has been misleading information circulated by an opinion writer and a city council member about the projects, the process and how the money is being used. Consequently, the County must take action to correct the record and misinformation.
Is the County spending $19.4 million on 82 beds?
No, this is an oversimplification that is misleading and reflects the opinion writer’s confusion about the differences between shelter and housing. The County is using $19.4 million to invest in both affordable housing, as well as subsidize rent for 10 years and increase shelter beds through the county’s scattered site shelter model by 50 beds.
- $8 million to help in the capital cost to purchase 32 beds of the 176 beds at the Residence Inn for Supportive Housing
- $5.9 million in capitalized operating reserve (COSR) for 32 units, ensuring affordability at 30% area median income
- $5.5 million to expand 50 new beds of scattered site shelter, dedicated to Parkway efforts. Focus on housing assessment and readiness.
Did the County “sit” on this money for 2 1/2 years?
The County has been diligently working on a meaningful plan for this funding since it was awarded. The County was thoughtful in its decisions about this important project. We heard from the community, including the unsheltered community, that more shelter beds and more affordable housing were a priority. These new projects directly address both these needs.
While the state granted these funds in April of 2022, the County received the money in April 2023. During that time, the County pursued land acquisition adjacent to the American River Parkway. After months of negotiations, the seller sold the land to another buyer.
The County then released a Request for Qualifications for an outside entity to stand up a Safe Stay Community. The County received three responses, none of which were determined to be viable to move forward with the money available and the parameters outlined by the submitters.
Is the County spending this money on units that are only 80% of the Area Median Income (AMI) – serving people that probably aren’t even homeless?
No. While the totality of the Residence Inn project that Sutter Capital is investing in does include “workforce housing” that caps rent at 80% of AMI, those units are being funded through the private funding and debt equity brought by Sutter Capital Group.
The $8 million the County is providing is funding the 32 units that will have rent capped at 30% AMI and are utilized exclusively for exiting homelessness.
Why didn’t the County use SHRA for this project?
While the County has many important projects with the Sacramento Housing and Redevelopment Agency (SHRA), the funding and projects they support are driven by competitive public funding. This is a market-driven project, primarily using private dollars and seeking a small contribution from the County to buy down a portion of the units.
This is a different kind of development housing project than SHRA does and doesn’t take away from the work they do. Rather, it adds housing to the market without using $32 million in public dollars. Sutter Capital Group is a locally owned and run group with a long history of successful housing development projects in the Sacramento area.
Doesn’t this project cost more “per bed” than other affordable housing projects?
No, building affordable housing from scratch can cost up to $500-$600k per unit, particularly for units that require supportive services and rented to tenants who make no more than 30% AMI. By leveraging an existing hotel that has bedrooms, bathrooms and kitchens in unit, Sutter Capital Group can transform these units for far less – at less than $250k per unit.
Is it true that once people move into the 32 units, they’ll stay there ”forever?”
While it’s possible that some of the residents moving into the permanent supportive housing (PSH) units may need rental subsidies in this housing option in the future, there is an average 15 percent turnover rate in PSH. At that rate, over 10 years, these units will serve far more than 32 households. The overall goal is to graduate households out of the supportive units, into workforce units at higher rates than traditional PSH units.
Did the County sweep all of the people off the Parkway in the last two years?
No. The County of Sacramento Department of Homeless Services and Housing and the Department of Regional Parks have partnerships that include 10 dedicated community health workers (CoHeWo) that provide outreach and rehousing services and case management to people living unsheltered along the parkway. Rangers often alert CoHeWo staff to encampments that need supports.
If there is imminent danger threatening encampments, such as fire or floods, campers are relocated out of harm’s way, often at the encouragement or direction of local first responders such as the City of Sacramento Fire Department.
Should the County have consulted with the City of Sacramento before moving forward with this project?
The State legislature granted $25 million to the County of Sacramento, specifically to support people coming off the American River Parkway, a jurisdiction managed by the County of Sacramento Regional Parks. The American River Parkway is a valuable natural resource, and this funding not only supports efforts to help individuals transition out of homelessness, but also safeguards the environment by reducing the impact of homelessness on the parkway. The Residence Inn project is in the unincorporated county.
How is the County going to use the unpent $5.6 million?
County staff will come to the Board with a plan for the remaining $5.6 million. The County welcomes creative and innovative partnerships that bring solutions and additional resources to the table to stretch existing resources, while still addressing the purpose of the funding – supporting folks exiting homelessness on the American River Parkway.
Accuracy is important, and words matter. The County of Sacramento appreciates the majority of local news outlets and jurisdictional partners who invest time in understanding and conveying the facts as they are, without resorting to misleading claims or omitting key information