This week in affordable housing news…:

State update:

• Project Homekey received a new round of scrutiny this week from the San Jose Mercury News, which highlights the challenges housing providers are experiencing in converting hotels purchased during the pandemic to permanent affordable housing for the homeless. Most of the first $850 million for Homekey projects was allocated last fall, and by December, all 94 motel conversions had closed escrow. But one year later, after successfully housing more than 8,000 homeless people through the worst of COVIID, the Mercury News reports that some Bay Area projects are still struggling to close funding gaps—as housing providers find Homekey grants used for buying buildings cannot be stretched to cover the cost of renovations, staffing, and ongoing maintenance. “They just wanted to give you money to get folks housed quickly, and you were kind of on your own with how to make it pencil for the next few years,” said Jocelyn Lin, associate director of housing development at Burbank Housing. “It’s been a struggle.” This year’s state budget includes $1.4 billion in additional funding for Homekey projects.

• A state appeals court panel upheld a September lower court ruling requiring opponents of a proposed Eden Housing project in downtown Livermore to post a $500,000 bond to help offset the “costs and damages” Eden is facing while waiting for a local lawsuit against the project to proceed. The 130-unit project was approved by the City Council earlier this year—more than a decade after the site was first designated for housing—but local opponents have filed an environmental lawsuit that has delayed construction. The project was in line for $68 million in financing through state and federal tax credit programs, and was also set to receive $14.4 million in Alameda County Measure A1 funds. The appeals panel agreed with a lower court judge’s ruling “that the preponderance of evidence supports the conclusion that the [lawsuit] has been brought for the purpose of delaying the provision of affordable housing.”

• The first SB 35 project in the City of Santa Cruz may have another opportunity to move forward, after HCD sent the city a letter this week stating that the City Council’s rejection of the project in October failed to follow state law. While city staff found the 140-unit project at 831 Water Street met the city’s objective standards, the city council voted 6-1 against it, with some members citing the recently signed AB 491 (Ward, Gonzalez) as their rationale. AB 491 requires that in mixed-income multi-family buildings, affordable housing occupants must have the same access to common entrances and areas as other residents. HCD in its letter says the city misunderstood the new law, which doesn’t go into effect until next year and doesn’t apply to this project. “HCD supports the city’s approval of housing during this critical housing crisis, including the 831 Water Street Housing Project, and hopes for a speedy resolution of this matter,” the letter said.

ICYMI – Top news stories:

On Veterans Day, there are still thousands of homeless vets in L.A. We followed 26 to find out why
Los Angeles Times – Oped by Sarah B. Hunter, RAND Corporation
When the encampment dubbed Veterans Row was emptied last week, dozens of tents, tarps and flags disappeared from San Vicente Boulevard. But moving 40 or so people onto the West Los Angeles Veterans Affairs campus is a minimal step forward: An estimated 3,900 veterans live unhoused in Los Angeles. That number, which has remained essentially unchanged since 2015, makes L.A. the epicenter of unsheltered veterans in the United States. It remains the case after years of promises—such as Mayor Eric Garcetti’s 2014 pledge to end veteran homelessness or the 2016 master plan to create 1,200 supportive housing units on the VA grounds, which is 95% incomplete and might not be done until 2031. So why hasn’t Los Angeles been able to make a dent?

That rejected 495-unit complex in San Francisco is now a dividing line in Assembly race
San Francisco Chronicle
The San Francisco Board of Supervisors’ controversial decision to reject a 495-unit apartment complex has become a key issue in what will become one of the hottest races in the Bay Area—and likely California—over the next few months: the special election to replace David Chiu in the Assembly. For San Francisco voters, the question provides a crucial way to differentiate between the two big-name candidates in the race—Supervisor Matt Haney and former Supervisor David Campos—both of whom are progressive Democrats, likely to agree on many of the decisions they’d be faced with in the Assembly. They are on opposite sides of this project.

The racist history of America’s interstate highway boom
Los Angeles Times
When President Eisenhower created the U.S. Interstate Highway System in 1956, transportation planners tore through the nation’s urban areas with freeways that, through intention and indifference, carved up Black communities. Overall, within the first two decades of highway construction alone, more than 1 million people had lost their homes nationwide. The highway program worked in concert with contemporary urban renewal efforts, which aimed to do away with housing and businesses that were deemed substandard and replace them with new development and easy commute routes for newly minted suburbanites. But those new suburban residents were almost entirely white.