Prompted by Pandemic, Some States Buy Hotels for the Homeless

PORTLAND, Ore. — It’s a bold goal in a place with a major housing crisis: Get as many as 2,000 unsheltered Oregonians into homes this winter by spending $65 million in state money to buy up to 20 underused hotels.

Oregon’s Project Turnkey, modeled after a similar program in California, was born out of the need to provide shelter and practice social distancing during the pandemic. The economic effects of the pandemic and wildfires have compounded a preexisting homelessness and affordable housing crisis on the West Coast.

Temporarily housing homeless people in hotels is nothing new. Housing and social service agencies often use hotel vouchers during extremely cold weather or natural disasters. Many communities have used federal CARES Act money to provide temporary housing in hotels.

But by systematically purchasing hotels outright, Oregon and California have taken it a step further. When the pandemic ends, the two states will continue using hotels as emergency homeless shelters, transitional housing or permanent affordable housing. In Oregon, nonprofit housing and social services providers will own and run the hotels-turned-housing.

“We knew there was a need for immediate shelter,” said Megan Loeb, who leads Project Turnkey for the Oregon Community Foundation, the nonprofit administering the program for the state. “We knew that it was a cost-effective way to stand up shelter, but we also knew that it could be a secondary benefit as long-term housing, once the pandemic was over.”

Because nonprofit housing providers will own the facilities in Oregon, they’ll be able to offer services such as counseling, job training, health care and addiction treatment on site. That’s far more useful than temporary hotel vouchers, said state Rep. Pam Marsh, a Democrat who represents southern Oregon communities where wildfires left thousands of people homeless this summer.

“We’ll own these facilities for the long term,” Marsh said. “It’s not just about pouring money into a lease on a motel for a single season. It is about having an asset that we can continue to use for the same purposes over and over and over again.”

Traditional homeless shelters may cost less, but hotel rooms allow people the dignity of their own bathrooms and privacy, Marsh said. Rooms also can accommodate couples, families and people with pets.

When the hotels are used as longer-term transitional housing, it can give people time to “get themselves ready for the next transition,” Marsh said, “to permanent housing.”

Pandemic Shelter

Many communities have used hotel rooms as a temporary housing solution during the pandemic, according to a survey by the Urban Institute, a nonprofit research organization based in Washington, D.C. Still, those communities have been able to serve only about 18% of their homeless population, the Urban Institute found. Thousands of people have slept outside or in substandard conditions during the pandemic, the report found.

Yet hotels have been very effective when used. According to early findings from a study by the University of Washington, when people without shelter were able to move into hotels in Washington’s King County, whose seat is Seattle, it slowed the transmission of the coronavirus.

People who were given shelter in hotels reported better physical and mental health, the study found, and were able to shift their focus from day-to-day survival toward longer-term goals such as finding jobs and permanent housing.

Now, King County also is considering buying hotels in 2021 to serve as longer-term housing for as many as 2,000 people. It’s an initiative that housing officials may not have considered without the urgency of the pandemic, an infusion of federal aid and hotel owners willing to sell because of the steep decline in travel.

Towns all over the United States are considering purchasing hotels, said Samantha Batko, a senior research associate at the Urban Institute. Those cities include rural Montana communities as well as Richmond, Virginia, and Austin, Texas.

“Hotels and hotel conversions do lend a lot of promise to an alternative type of temporary housing,” Batko said.

During the pandemic, California has placed about 6,000 people in 4,000 rooms in 37 hotels in the city and county of Los Angeles, and thousands more in other parts of the state. But recently, as federal emergency money has run out, California began backing away from the strategy of paying for rooms as a pandemic shelter solution, and has started buying hotels.

Oregon’s Project Turnkey is modeled after the hotel purchase plan in California, a $835 million effort known as Project Homekey, which evolved out of the Golden State’s program to rent temporary rooms in hotels for unsheltered people during the pandemic. Democratic Gov. Gavin Newsom launched California’s initial program, called Project Roomkey, with federal pandemic funding and assistance from the Federal Emergency Management Agency.

Since then, California has started buying entire hotels, using a combination of federal and state money. The state has also awarded more than $835.6 million to 48 jurisdictions for 93 projects that will convert 6,055 hotel units to housing. They include a project in Los Angeles County to buy an 81-unit hotel with kitchenettes for $11.75 million and to convert it to permanent supportive housing.

Renting thousands of hotel rooms during the pandemic was a temporary solution, said Heidi Marston, executive director of the Los Angeles Homeless Services Authority, in a news release. In September, the agency announced it has the money to find more permanent housing for at least 4,900 of the most vulnerable people experiencing homelessness, including people older than 65 and those with underlying conditions putting them at greater risk of COVID-19. Over the next six months, officials hope to transition 400 to 1,000 people a month into housing from 37 emergency shelter sites.

Buying hotels is a smart strategy, said Christopher Ptomey, a housing researcher and executive director of the Urban Land Institute’s Terwilliger Center for Housing.

“With the challenges that you’re seeing in the hospitality market and the enormous amount of need you’re seeing in the housing side of things, it just makes sense for this to be one of the many solutions that communities should be pursuing,” Ptomey said. “An empty hotel is not helping a neighborhood.”

In Oregon, housing experts say they’re taking advantage of the moment. They had to find shelter that would meet COVID-19 safety requirements, and they wanted it to be useful beyond the pandemic.

It’s far less expensive to buy the properties than to constantly pay rent, said Ernesto Fonseca, chief executive officer of Hacienda CDC, an organization that builds low-income housing for Oregon’s Latino communities. And because the properties they’re purchasing have features such as bathrooms, beds and occasionally kitchenettes, Oregon’s Project Turnkey hotels could be operational as soon as January.

“It’s a crazy timeline that we’re putting ourselves into, but it’s needed,” Fonseca said.

Started with Farm Workers

Project Turnkey got its start this summer as local housing officials sought a quick way to find housing for migrant farm workers living in crowded conditions in the eastern part of the state amidst a COVID-19 outbreak. The program was approved this fall by the state’s Emergency Board, a committee of 20 state lawmakers who meet when the full legislature is out of session. It’s being paid for with general fund money, not federal pandemic assistance.

The program was split into two parts: $30 million for communities where wildfires destroyed 4,000 homes this summer and $35 million for housing needs in other parts of the state. With declines in recreational and business travel, many hotels became available that wouldn’t have previously been affordable or even on the market. The Oregon Restaurant and Lodging Association helped the state identify more than 30 properties with willing sellers. All the potential hotels are near amenities or close to transit, and all are relatively new or recently renovated, Loeb said.

Oregon and California have among the highest state rates of homelessness in the country and Washington state is not far behind, according to the National Alliance to End Homelessness. There were an estimated 151,000 unsheltered people in California alone before the pandemic.

Homelessness has multiple complex causes, but the high cost of housing in fast-growing tech-based West Coast economies tops the list.

Lawmakers who backed Project Turnkey in Oregon say that buying hotels is part of an overall effort to address housing affordability.

“It’s not the whole answer, it’s one little piece,” said state Rep. Alissa Keny-Guyer, a Portland Democrat who headed up the legislative committee that proposed many of the forthcoming housing solutions.

Among the other pieces are sweeping zoning changes. In 2019, Gov. Kate Brown, a Democrat, signed a law that all but does away with single-family zoning regulations. Oregon cities with more than 10,000 residents must allow duplexes in areas previously zoned exclusively for single-family homes. Cities larger than 25,000 also must allow townhouses, triplexes and fourplexes. The 2019 housing bill was part of a package that included rent control measures and other housing assistance.

And in May, voters in three Portland-area counties approved an income tax to raise money for housing and related services for people experiencing homelessness or those at risk of losing their housing. The program is expected to raise as much as $250 million a year through a 1% income tax on people who make more than $125,000 a year, or $200,000 for couples. It also taxes businesses that make more than $5 million a year. 

Oregon’s lack of affordable housing is felt in cities and rural communities, but it’s perhaps most visible in Portland, where before the pandemic an estimated 2,037 people were living unsheltered at night in tent communities, on streets and in parks.

The idea of being able to move into a hotel with a bed or a kitchen is particularly appealing to Jeff DuBois, 41, who has been sleeping on a cot at a shelter in Portland for more than two months. DuBois, a tall, lanky man with scoliosis, was intrigued when he heard about Project Turnkey.

“I would love that,” said DuBois, who in late November was checking on friends who were living in tents the city wanted to remove from a park in southeast Portland. “I need a break.”

In Oregon, homeless shelters are typically run and supported by local governments and community organizations. With Project Turnkey, those groups can apply for state money to buy the hotels. They will own the hotels and be responsible for their current and future operating costs.

State Sen. Lynn Findley, a Republican who represents rural central and eastern Oregon, voted to support the communities affected by wildfires, but opposed spending state money on hotels elsewhere. He said he likes the program but was concerned that people who live or own businesses near the hotels wouldn’t have a chance to weigh in on the consequences of converting them to shelters or low-income housing.

“I’d like to figure out how to do this correctly,” Findley said during a November meeting, “and not just throw money out and say, ‘Have a nice day!’ and then set something up to fail.”

Among the organizations vying for the state money in southern Oregon is the nonprofit Option for Helping Residents of Ashland, or OHRA. The program was set up in the hopes that experienced agencies like OHRA would apply for the money to buy hotels and provide services once they’re operational. They want to buy a 68-room hotel in Ashland, said Michelle Arellano, OHRA’s executive director.

Normally, OHRA houses 45 people in a cold-weather shelter, and also runs a year-round program to connect unhoused people with resources and to help people facing homelessness.

OHRA has ample evidence that offering people longer-term shelter in hotels helps them find more permanent housing, Arellano said. Because OHRA got extra federal pandemic money to help pay for hotel rooms this year, the organization was able to offer longer stays to some people who would otherwise have been forced out when their winter shelter closed in April. That gave them time to get 17 people into more permanent housing.

“We’ve had that extra time to help them stabilize,” Arellano said.  When you have shelter over your head and you have a bed at night and you have some food in your stomach, that stabilization makes all the difference in the world.”