San Diego Moves To Purchase Hotels for Homeless at Cost of $400K Per Room

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April 26, 2023

San Diego leaders are requesting state funds to buy three hotels for the city’s homeless at a cost of $383,000 per room, the San Diego Union-Tribune reported.

The wealthy city, where homelessness has surged to record highs in recent months, will apply for the funds from California governor Gavin Newsom's (D.) latest $736 million round of funding from his homelessness grant program. City officials were unfazed by the cost of the plan, with commissioner Ryan Clumpner calling it "a fantastic value proposition."

Commissioner Stefanie Benvenuto called the value of the purchases "incredible when you see the cost at the door."

San Diego is eyeing the hotel purchases despite the recent failure of a similar initiative. In 2020, city commissioners approved the purchase of two hotels to house homeless people at $278,000 to $353,000 per room. A newly opened affordable housing apartment project cost $51.1 million in total, or $583,000 per room. Still, downtown San Diego’s homeless population reached a new record high earlier this year of nearly 2,000 people.

"They’re nuts," Bob Rauch, a San Diego businessman whose company owns and operates hotels, told the Union-Tribune of the city's leaders. "They overpaid last time during a pandemic, and they’d be overpaying again."

Meanwhile, Los Angeles mayor Karen Bass's (D.) latest budget proposal includes $1.3 billion for the city’s nearly 41,000 homeless, which equates to $32,000 per person. The per capita Los Angeles income is $39,380. 

A similar trend has played out on the state level. California Democrats have spent some $20 billion over the past five years to address a growing homelessnes crisis.

Last month, Newsom proposed a ballot initiative to approve a minimum of $1 billion each year to house homeless people who are mentally ill. 

According to the federal government’s latest count, California holds nearly a third of the nation’s homeless—multitudes more than any other state.

Earlier this month, a legislative committee approved a bipartisan request for an audit of where local, state and federal funds to address homelessness are going and what the dollars are accomplishing.