In July, the California Department of Housing and Community Development (HCD) unveiled its Homekey Program. The program provides grants to local jurisdictions to purchase and rehabilitate hotels, motels, vacant apartment buildings, and other buildings to convert into housing for people who are impacted by COVID-19 and experiencing or at risk of homelessness. Available grant funding totals $600 million, which includes $550 million of federal funds and $50 million of state funds.
The County of San Diego invited developers to submit proposals to partner with the County to apply for Homekey funding for a proposed project. The County then asked RSG to review the strongest proposal received, which included a request for County funding. RSG thoroughly reviewed the proposal, including evaluating the proposed funding sources and development budget and ensuring that the Developer’s income and expense assumptions were reasonable and compliant with the proposed funding sources. RSG also determined whether the amount of County funding requested was reasonable and projected the amount that would be repaid in the first 55 years of the Project. Finally, RSG prepared a memo detailing our review and summarizing the Project’s strengths and weaknesses.
RSG is hopeful that HCD’s Homekey Program will be a success. Recipients of federal funds must expend the funds and close escrow by December 30, 2020. This is an incredibly short timeframe, especially given the complexities of the development process. However, we were encouraged to review a proposal from a Developer eager to accept the challenge in order to create much needed affordable housing in our state. We are truly grateful to be part of the process.
If you have any questions about the Homekey program, please reach out to RSG Senior Associate Dominique Clark at [email protected].