CAO recommends extending interim housing terms and amending Homekey 1 loan documents; committee approves

The City Administrative Officer told the Housing and Homelessness Committee on May 14 that Homekey 1 sites acquired by the city in 2020 require legal amendments because interim operator agreements and program timelines are reaching five years.

Yolanda Chavez of the CAO said the report recommends a three-year extension of interim housing terms with an option to extend an additional three years, aligning loan documents where the state treats its acquisition match as a grant and reducing loan amounts for affected sites. For three sites already approved as permanent interim housing because of construction type or owner‑operator agreements, the CAO recommended a 30‑year term with a portion of the loan forgiven annually.

Chavez emphasized that future conversions from interim to permanent housing will only be permitted after an owner‑operator confirms it has operating subsidies. She also noted that any conversion for sites that received a state match would require state approval in addition to council and mayoral approvals.

Committee members discussed the shortage of project‑based vouchers, county funding transitions and local options such as Measure A and La Casa funds to provide operating subsidies. Committee members noted that the former “road map” county agreement is ending, leaving the city to cover larger shares of interim site operating costs unless alternative funding or conversions are secured.

The committee approved the CAO recommendations to move the item to full council by roll call (three ayes).