The Hotel Diva in the Tenderloin will be purchased for permanent supportive housing in San Francisco using state Project Homekey funds. (Kevin N. Hume/S.F. Examiner)

The Hotel Diva in the Tenderloin will be purchased for permanent supportive housing in San Francisco using state Project Homekey funds. (Kevin N. Hume/S.F. Examiner)

SF to purchase second hotel site to house the homeless under the state’s Project Homekey program

San Francisco was awarded more funding Friday to purchase a second hotel site under the state’s Project Homekey program and turn it into permanent supportive housing for the homeless.

Gov. Gavin Newsom announced the latest award of $81.44 million in funds for five applicants during a visit to San Jose. San Francisco’s share is $29.1 million for the purchase of Hotel Diva, a 130-room hotel located near Union Square at 440 Geary St.

The City was previously awaded $45 million in Project Homekey funding for the purchase of the 232-room Granada Hotel.

Mayor London Breed celebrated the news in a statement.

“By expanding access to housing and other support, we can create real opportunities for people to get off the streets and create a path for them to live a fuller, healthier life,” Breed said. “We pursued additional Homekey State funding to ensure that the thousands of people who have been in our emergency housing during this public health crisis exit into stable housing placements.”

Both hotels are in District 3, represented by Supervisor Aaron Peskin.

“Ultimately, the best way to address homelessness after a Navigation Center is established is to create housing to navigate residents to,” Peskin said in a statement. “The Hotel Diva is a perfect opportunity for yet more permanently affordable housing.”

Both sites were applied for in a partnership between The City and the nonprofit Episcopal Community Services, which will use the funding to acquire sites.

“Now is the time to take bold action to acquire new units of Permanent Supportive Housing, a proven solution to ending chronic homelessness,” Beth Stokes, executive director of Episcopal Community Services, said in a statement. “ECS’ acquisition of the Diva, in conjunction with the Granada, will add 362 units of Permanent Supportive Housing to the City’s homeless response system.”

The Granada Hotel, at 1000 Sutter St., has 80 units occupied by seniors. The remaining 252 units will be filled by formerly homeless residents who were moved into hotels due to the COVID-19 pandemic on a temporary basis. The Department of Homelessness and Supportive Housing moves homeless people into supportive housing units using a so-called Coordinated Entry System.

The City is also providing funding to help with the purchase of the Granada site, according to a budget analyst report.

The $45 million Homekey Program grant includes $39 million to buy the site and $5.5 million for two years of operating subsides. But the total cost to acquire and rehabilitate the site is $59.8 million. The City is covering the difference with loan through the Mayor’s Office of Housing.

Project Homekey was launched in response to COVID-19 to purchase and rehab hotels, motels and vacant apartment buildings for homelesss to move into. The program is administered by the California Department of Housing and Community Development.

To date, more than $709 million has been awarded to 45 applicants for 78 projects totaling 5,068 units, according to the Governor’s Office. The average cost per unit is$139,000.

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