Setting the Record Straight: Hotels to Housing

In response to the COVID-19 pandemic, San Francisco placed over 2,300 people into Shelter in Place Hotels. This was the largest number of rooms in terms of homeless population of any City in the country — a massive logistical public health undertaking and achievement, and also an expensive one.

Recently there have been a number of inaccurate statements made about both the costs associated with this program and our plan to responsibly transition the program while moving people currently in the hotels into other types of housing. Let’s go through what the facts are and our plan.

Despite what some people have been saying publicly, no one is being ‘evicted’ from the hotels and sent back to the streets, and it is irresponsible for people to throw that term around so loosely. We are transitioning the hotel program over a period of months precisely so that we can connect all of the residents in hotels with housing placements.

Evictions are devastating to the health, security, and wellbeing of people who face them. Anyone using that term is inciting fear and misleading the public about what the plan is to ensure that no one ends up back on the street.

The costs and funding associated with this program are incredibly uncertain, and this is a constantly evolving situation. City staff and our non-profit partners are working around the clock to ensure that this is done right and that no one ends up back on the street. We all share this goal. We need to be honest about what is happening, why it’s happening, and how we are going to ensure that it is successful.

Let’s start with the costs associated with this program. Some individuals continue to say that 98% of the costs are reimbursed by the State and Federal governments — this is simply inaccurate. That isn’t true. The truth is about 75% of eligible costs are anticipated to be reimbursed by the federal government through FEMA, and we chose to use $61 million in one-time grant funding from the CARES Act to cover a majority of the remaining costs. That CARES Act funding has now run out, and as of this writing there doesn’t appear to be new CARES funding coming soon.

So if we extend the program in its current form, that would mean the City would be responsible for $32.6 million more than is currently in the budget passed by the Board of Supervisors in September of this year. We are already facing a projected shortfall in the current fiscal year of $116 million, and a deficit of over $650 million over the next two years that we need to close.

There is also a very real possibility that FEMA will stop reimbursing the City for the 75% of the costs of these rooms with only thirty days notice. I’ve sent a letter to FEMA asking for clarity on this and have not yet received any indication of when this will happen.

It is going to take months and dedicated resources to ensure that people are connected with stable housing options. This is not something we can rush. We are talking about people’s lives, their health, and their safety. Moving over 2,000 people to new housing in 30 days is not an option. If we wait until FEMA cuts off funding, we will either create a huge deficit in our budget that will result in funding cuts to services or potential layoffs, or we will have a rushed process that almost certainly will result in people being turned away from the hotels with no plan to re-house them, which means we are putting people back on the street.

We are committed to doing this right so that no one ends up back on the street. To do that we need to be methodical, we need to be transparent, and we need to be honest with the public along the way. This is an incredibly complicated task and I know that the people doing the work every day share the same goal, which is to keep everyone in these hotels housed despite the very real challenges posed by this pandemic and its effects on our budget.

That is what’s important here and that is our focus.