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Committee backs extensions and loan modifications for HomeKey interim sites amid voucher uncertainty
Summary
The committee approved extending interim housing terms at HomeKey One sites and modifying loans to permit longer interim operations, while members warned that federal voucher cuts and county funding changes could shift long-term costs to the city.
The Los Angeles City Council Homelessness and Housing Committee voted 3-0 on May 14 to approve administrative recommendations to extend interim housing terms and modify loan documents for HomeKey One sites acquired in December 2020.
City staff told the committee the original interim operating model allowed operators to run interim housing for up to three years with a maximum extension to five years; as those timelines approach the department is proposing three-year extensions with an option for an additional three years and, for some sites, a 30-year term tied to annual loan forgiveness and conditions for future permanent conversion.
Yolanda Chávez, the presenting city staff member, said the measures respond to the city’s continuing need for interim housing and the scarcity of project-based vouchers and other subsidies needed for conversion to permanent supportive housing. Chávez told the committee the report recommends clarifying loan and regulatory documents to protect the city’s interests and to require mayor-and-council approval for any future permanent conversion.
Councilmembers and staff noted several financial uncertainties: proposed federal budget changes that could reduce Section 8/project-based voucher funding, the winding down of the countyRoadmap program commitments this fiscal year, and the potential need to cover operating subsidies with city funds if county or state funds are not available. Staff said some HomeKey-acquired motels and hotels had partial state acquisition funding but still require operating subsidies and capital work to convert to permanent housing.
The committee approved the CAO/administration recommendations to (1) amend loan documents to allow extensions, (2) provide a pathway for demolition and replacement at one approved conversion site if financially justified, and (3) extend time for operators to secure financing for supportive or affordable permanent housing. Councilmembers Rahman, Jurado and Bloomfield voted yes.
Committee members instructed staff to return with monitoring metrics and to limit the first extension to three years so the city can reassess subsidy availability in the medium term.
