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Salinas weighs $1.25M Pro Housing grant for El Rey Motel rehab or down-payment aid; committee takes no action
Summary
Staff proposed applying for up to $1.25 million through the California Pro Housing Incentive Program Round 4 to rehabilitate the El Rey Motel into transitional housing or expand a mortgage down-payment assistance program; after questions about ownership, partners and impact, the committee deferred action and asked staff to return with alternatives.
City staff told the Housing and Land Use Committee on March 10 that Salinas is eligible to apply for up to $1.25 million under the California Department of Housing and Community Development's Pro Housing Incentive Program (PIP) Round 4 and recommended two prioritized activities: rehabilitating the El Rey Motel at 443 W. Market St. into transitional housing (Activity 6) or expanding the city's Mortgage Down Payment Assistance Program (Activity 9).
"Under the state allocation formula, the City of Salinas is eligible to receive up to 1.25 million in pip funding," Planning Manager Vincent Montgomery said, outlining the March 31 application deadline and HCD's plan to issue award notifications in June 2026. Montgomery said the city has interested partners to operate a rehabilitated El Rey site but has not executed contracts and that the award amount alone likely would not cover all rehabilitation costs.
Committee members and public commenters raised concerns about who would operate or own the facility, whether $1.25 million is the best use of funds, and whether more options should be included in the application so the city could pivot if El Rey proves infeasible. One council member said she was hesitant to support the item, questioning whether the city should be a property owner and noting that the same funding might be used to create a tiny-home village or expand programs that help more households.
Resident Jose Guerra told the committee he was frustrated by the long pace of housing work and urged immediate action to help farmworker households and other residents in need.
After discussion and public comment, committee members chose not to take action at the March 10 meeting and asked staff to return with additional options and clarity on ownership, partners and likely outcomes before the council takes up the application on March 24.
