Title
Recommendation to Provide Direction on the Provision of Housing for the City’s Unhoused Population, Including Emergency Housing, Transitional Supportive Housing, Permanent Supportive Housing and Prospective Homeless Housing Projects. (Community Development 10061833)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
There is a need for homeless housing in the community, and a significant amount of funds are currently available through the State’s Project Homekey program (Homekey) and the American Rescue Plan Act (ARPA). Currently, funds are available through the second tranche of Homekey and a third tranche will be available in approximately late 2022.
Consistent with City Council direction on July 20, 2021, staff issued a request for proposal (RFP) asking respondents to propose a homeless housing project that qualifies as a Homekey project to be located in one of the three following locations: (i) the “Bottle Parcel” at 2350 5th Street; (ii) the Marina Village Inn at 1151 Pacific Marina; or (iii) another site in the city identified by the respondent. Staff received five responses to the RFP, as further described below. Staff recommends submitting an application for the second tranche of Homekey funds to construct a transitional housing project on the Bottle Parcel, and further investigating the possibility of purchasing a hotel in Alameda and submitting an application for this project in the third tranche of Homekey funds due to the need to seek an operating partner for this specific project
Since the City Council meeting on July 20, 2021, staff has also been exploring the possibility of using three vacant City-owned homes at Alameda Point for emergency housing. That option is also described more fully in this report and is recommended by staff at this time.
BACKGROUND
Alameda County’s homeless population grew by 43% (from 5,629 to 8,022) as shown by the 2017 and 2019 Point-in-Time (PIT) counts. Alameda had a homeless population increase of 13% from 204 to 231 individuals during the same period. Based on observations, staff believes that homelessness in the city has further increased since 2019. However, due to COVID-19, the U.S. Department of Housing and Urban Development’s (HUD) required 2021 PIT count, officially documenting the number of homeless every two years in all of Alameda County incorporated and unincorporated areas, was delayed to 2022.
While the day center, safe parking and Operation Dignity street outreach programs have proven valuable in support of immediate concerns around health, safety, and social service needs of Alameda’s unhoused population, these efforts only reduce homelessness in very small increments. Currently, there are significant funds available through Homekey (approximately $2.7 billion in two tranches) to construct and operate dignified homeless housing within the city. The next tranche of Homekey funds includes approximately $1.5 billion, and the third tranche will include approximately $1.2 billion. ARPA funds also offer the City of Alameda (City) an opportunity to address the homelessness housing crisis, particularly in combination with Homekey funds. County funds may also be available.
DISCUSSION
Since receiving City Council’s prior direction, staff has been exploring a number of options related to providing housing for the city’s unhoused population. The various housing options being explored include emergency housing, transitional supportive housing and permanent supportive housing, which housing types are consistent with the policy recommendations in the City’s recently approved “Road Home - A Five-Year Strategic Plan to Prevent and Respond to Homelessness in Alameda Secure a Housing Future for All Alamedans.”
Homekey Project and RFP:
Based on the City Council’s direction, staff issued an RFP asking respondents to propose a housing project for the city’s unhoused residents that meets the requirements of Homekey in one of the following locations: (i) the “Bottle Parcel” at 2350 5th Street; (ii) the Marina Village Inn at 1151 Pacific Marina; or (iii) another suitable site in the city identified by the respondent.
Below is a summary of the RFP responses received by staff:
• Bottle Parcel - Operation Dignity and Danco Construction: Operation Dignity and Danco Construction propose a ground-up modular build on the Bottle Parcel to be constructed by Danco Construction. Operation Dignity would provide the social services component of the project. The project would potentially house 39 individuals and target the single, homeless adult population for permanent supportive housing.
• Bottle Parcel - Dignity Moves and Five Keys: Dignity Moves and Five Keys propose a ground-up modular build on the Bottle Parcel to be constructed by Dignity Moves. Five Keys would provide the social services component of the project. The project would potentially house 30 to 60 individuals and target the homeless adult population, including transitional age youth, seniors, and couples for transitional supportive housing.
• Scattered Sites - Bay Area Community Services (BACS): BACS proposes to purchase single-family homes throughout Alameda to serve as transitional supportive homeless housing.
• No Location Indicated - Delphi: Delphi proposes to construct community cabins to be placed on a site yet to be identified for emergency housing.
• Marina Village Inn - Staff did not receive an RFP response expressing interest in a homeless housing project at the Marina Village Inn.
• Potential Hotel -The City is seeking an operating partner for this specific proposal. One potential partner, the Alameda Housing Authority (AHA), indicated to staff that they are interested in partnering with the city on a potential purchase of a local hotel for use as permanent supportive housing. However, AHA is early in conversations with the owner of the hotel, and as a result was unable to submit a complete RFP response.
Two Proposals Deemed Infeasible
Staff is continuing to evaluate the proposals. However, the BACS proposal has been deemed infeasible by staff because it assumes that the average home purchase price in Alameda is about $588,235, which is far below the median home purchase price of $1,250,000 as listed by Redfin. Staff has also determined that the Delphi proposal is not feasible since no site was identified. However, there may be an opportunity for Delphi to participate in a modular project on the Bottle Parcel if such a project proceeds.
Bottle Parcel Options
A modular housing project on the Bottle Parcel appears to be the most feasible project in the near-term. Staff is in the process of undertaking due diligence and deeper analysis on both Bottle Parcel proposals. Specifically, staff is closely evaluating: financial feasibility, experience and skills of the team, prior successful comparable projects, the ability of the team to meet the aggressive timeline imposed by Homekey, social and supportive services to be offered, staffing, the team’s plan for community outreach, security measures to be utilized, etc. Interviews are being conducted with the two groups who submitted proposals to construct projects on the Bottle Parcel. Transitional supportive housing on the Bottle Parcel is being recommended by staff because no other transitional housing for our unhoused community members now exists in the city.
Hotel Option
A hotel project, seems to offer a viable permanent supportive housing opportunity that could materialize over a slightly longer time horizon. The city has evaluated a couple of options at this time, but due to uncertainty of condition and/or availability, this project would likely occur in the third tranche of Homekey applications when a viable project is better defined.
Possible Next Steps
The Homekey application process has opened and staff recommends targeting to submit within the second Homekey tranche an application by the end of December and preferably by the end of November for a ground-up modular transitional housing project on the Bottle Parcel. Staff also recommends continuing to investigate the possibility of purchasing a hotel in Alameda for permanent supportive housing and submitting an application for this project in the third tranche of Homekey funds to the extent the investigation reveals that this is a viable project and City Council directs staff to proceed with this possible purchase and an additional Homekey application. At this time, staff is only seeking direction from Council to continue forward with these due diligence efforts related to a hotel project.
On November 16, 2021, staff intends to return to City Council seeking formal approval through a resolution(s) of its recommended Homekey project on the Bottle Parcel and recommended development and operation team, including a resolution for a ground up modular build of transitional supportive housing on the Bottle Parcel. A condition of a Homekey application is that staff attach a City Council resolution approving the submission of the application.
Emergency Housing at Scattered Sites on Alameda Point
Since the July 20, 2021 City Council meeting, staff has also been evaluating the possibility of repurposing three City-owned homes at Alameda Point that are vacant at this time. This would not likely be a permanent homeless housing option, but does allow the City to repurpose existing City assets to address an immediate emergency homeless housing need. Currently, two large four plus bedroom homes are vacant, as well as a three-bedroom townhome. These three (3) homes could be rented by the City on the open market for approximately $80,000 per year in the aggregate. Staff estimates operating this program for approximately five (5) years. Staff received two proposals to operate these homes as a single emergency housing project.
The two proposals are described below:
• BACS: BACS would operate the three homes as a single emergency housing project that would allow the City to offer its homeless residents an expedient transition from the streets into a bed and a home. As an emergency shelter, the primary goal would be to support the residents as each individually needs to be supported, and to help each resident move to permanent supportive housing. BACS proposes to house on an emergency basis approximately 30 residents.
• Village of Love: The Village of Love (VOL) proposes to operate a similar emergency housing project to the one proposed by BACS, except that the program would be integrated with the day center program. VOL proposes to house on an emergency basis approximately 30 residents.
Staff is currently evaluating these two proposals and will interview each respondent to get a better understanding of the program each would offer before selecting a partner. Specifically, staff is analyzing financial feasibility, experience and skills of the team, prior successful comparable projects, ability of the team to quickly get this emergency housing program up and running, social and supportive services to be offered, staffing, the team’s plan for community outreach both prior to opening and after opening, security measures to be utilized, etc.
On November 16, 2021, staff is prepared to return to City Council seeking formal approval of its recommendation that three vacant City-owned homes at Alameda Point be operated as an emergency housing project by the entity selected by staff as the best fit.
ALTERNATIVES
• Direct staff to (i) return to City Council seeking formal approval to submit to the Homekey program in tranche two an application for a transitional supportive housing project on the Bottle Parcel, and (ii) continue investigating a second homeless housing project that would involve the purchase of a hotel for permanent supportive housing for possible submission of an application in the third tranche of the Homekey program.
• Direct staff to only pursue one of the two homeless housing projects for submission to the Homekey program that are recommended by staff, as described above.
• Direct staff to pursue no homeless housing projects for submission to the Homekey program.
• Direct staff to continue pursuing an emergency homeless housing project in three vacant homes at Alameda Point, as described above.
• Direct staff to discontinue all efforts to provide homeless housing in Alameda.
FINANCIAL IMPACT
If the City Council directs staff to proceed with an emergency, transitional housing and/or permanent supportive housing project, financial contributions may be required from the City that would be subject to future City Council appropriations and approval.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Social Service Human Relations Board Charter and Ordinance authority “to improve social services in the community” (Alameda Municipal Code Section 2-9.1).
This action is consistent with Goal 1 of the “Road Home - A Five-Year Strategic Plan to Prevent and Respond to Homelessness in Alameda Secure a Housing Future for All Alamedans.”
ENVIRONMENTAL REVIEW
This action is exempt from review under the California Environmental Quality Act (CEQA) section 15378(b)(5) (not a project); and section 15601(b)(3) (no significant environmental impact).
SURPLUS LANDS ACT
The transactions contemplated herein do not implicate the Surplus Lands Act (SLA) because the land will be eligible to be declared exempt under the SLA, as the land will be transferred for the development of affordable housing with restrictions as described in Government Code Section 25539.4 or 37364.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Provide direction on the provision of housing for the City’s unhoused population, including emergency housing, transitional supportive housing, permanent supportive housing and prospective homeless housing projects.
CITY MANAGER RECOMMENDATION
The City Manager is seeking City Council support in moving forward to bring a Homekey project application for the Bottle Parcel and to further refine a proposal to repurpose three home at Alameda Point to bring back for City Council consideration.
Respectfully submitted,
Lisa Nelson Maxwell, Community Development Director
Financial Impact section reviewed,
Annie To, Finance Director
cc: Eric Levitt, City Manager
Gerry Beaudin, Assistant City Manager