San Francisco may be required to pay an additional $26 million on top of the millions it has already paid to house homeless people in hotels during the pandemic.
California launched Project Roomkey, a program aimed at providing shelter for the homeless while also providing taxpayer money to hotels that were losing their customer base. However, the program's cost is set to skyrocket three years later. In December 2020, California Governor Gavin Newsom praised the program, stating that it protected the most vulnerable Californians. In April, one of the hotels filed a lawsuit against the city, alleging millions of dollars in damages to their historic building due to Project Roomkey.
San Francisco had 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. According to a city budget report in February, San Francisco officials planned to pay $26 million in payouts for other damage claims from the program. When Newsom extended the program in December 2020, California had already spent $512 million to local governments for Project Roomkey. According to the governor's office, this accounted for only 25% of the program's costs, meaning the total price 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 signed by the mayor. Some critics have pointed out that the failure of the Roomkey program showed that simply throwing money at homelessness was not a rational strategy to solve the crisis.
"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," according to a report by The Epoch Times. "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."
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