San Francisco paid hotels millions to house homeless people during the pandemic — now the city will pay $26 million for damages to rooms

News & Politics

The city of San Francisco may have to pay out $26 million in addition to millions it paid to house homeless people at hotels during the pandemic.

Some homeless advocates had praised California for Project Roomkey, a program pledging to provide shelter for the homeless while funneling taxpayer money to hotels at a time when they were losing their customer base.

Three years later, the cost of the program is set to explode.

“This action serves as acknowledgment of the importance of efforts like Project Roomkey in protecting the most vulnerable Californians and validates all your efforts to implement this first-in-the-nation program,” California Gov. Gavin Newsom said in December 2020 when the program was extended.

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In April, the owners of one of the hotels filed a lawsuit against the city alleging millions of dollars in damages to their historic building as a result of Project Roomkey.

The city of San Francisco has already agreed to pay $2.9 million to the Tilden Hotel and $5.3 million to Hotel Union Square for damages incurred when they were contracted to house the homeless during the pandemic.

A city budget report in February said San Francisco officials planned to pay $26 million in payouts for other damage claims from the program.

In December 2020 when Newsom extended the program, California had already paid out $512 million to local governments for Project Roomkey. That accounted for only 25% of the program’s costs, according to the governor’s office, meaning the total cost of the program at that time had been over $2 billion.

California is facing a massive $32 billion deficit in the budget after reporting a large surplus during the pandemic.

The $19.6 million settlement with the owners of Hotel Whitcomb will have to be approved by the full Board of Supervisors and also signed by the mayor.

Some critics pointed out that the failure of the Roomkey program showed that simply tossing money at homelessness was not a rational strategy to solve the crisis.

Here’s more about the homeless program:

Project Roomkey provides housing, meals to California

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