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Committee recommends lease of city property at 42 Otis to 5 Keys for 24 units of supportive housing for transitional‑age youth
Summary
The committee forwarded a lease allowing the Department of Homelessness and Supportive Housing to ground‑lease 42 Otis Street to 5 Keys Schools and Programs for a permanent supportive housing project of 24 units for young adults, with an initial five‑year term and up to ten five‑year extensions (max 55 years); the measure included $1 in rent and funding sources to cover operations.
The Budget and Finance Committee on Sept. 25 recommended that the Board authorize a ground lease for city property at 42 Otis Street to 5 Keys Schools and Programs to operate 24 units of permanent supportive housing (PSH) for transitional‑age youth (ages 18'4).
Emily Cohen of the Department of Homelessness and Supportive Housing said the building, constructed in 2021 in the Hub neighborhood, includes unit kitchens and bathrooms, on‑site laundry, community space and elevator access. The lease structure calls for a $1 annual rent, an initial five‑year term and up to ten automatic five‑year extensions, yielding a potential maximum term of 55 years. The department noted a Homekey award of $8 million to offset acquisition and operational costs.
BLA staff summarized the lease and estimated operating costs of about $1.3 million per year, roughly half from HUD rental subsidies and half from Proposition C funds. The BLA report identified lease provisions (permitted‑use and default sections) that would allow the City to terminate the lease if 5 Keys underperforms.
Vice Chair Mendelmann raised neighborhood concerns raised by the Civic Center Community Benefit District and asked how the project differs from larger PSH sites such as Jazzy Collins. HSH said the project is much smaller, serving younger people (63% in school or employed), and has onsite programming and site management intended to reduce loitering and neighborhood impacts. Several public commenters representing youth service providers and supportive‑housing advocates strongly backed the project, describing it as a needed step to reduce youth homelessness.
Following public comment, the committee moved the item to the full Board with a positive recommendation; the two members present voted aye and the item will be considered by the full Board on Oct. 1.
