When California took the unprecedented step in the spring of 2020 to move thousands of homeless residents into hotels to protect them from the ravages of COVID-19, it did so believing the federal government would foot a large chunk of the bill.
Now, following what California officials say is an abrupt about-face from the Federal Emergency Management Agency, cities and counties suddenly are on the hook for hundreds of millions of dollars they expected FEMA to cover. At a time when budgets already are tight, it’s left local governments scrambling.
“It’s going to be quite a problem in the next few years if something doesn’t change to fix it,” said Wendy Huff Ellard, a disaster recovery lawyer with Baker Donelson who represents several California counties seeking compensation from FEMA.
At issue is a letter (PDF) FEMA sent the state in October, saying it would not pay for hotel stays of longer than 20 days between June 11, 2021 and May 11, 2023.
That will cost California state and local governments more than $300 million collectively, according to an estimate from the Governor’s Office of Emergency Services.
That means individual cities and counties throughout the state could be out tens of millions (Sonoma County has $32 million at risk, while San Diego County has up to $28 million) or even more (San Francisco estimates the change will cost it $114 million).
Limiting hotel stays
Gov. Gavin Newsom launched the hotel shelter program — dubbed Project Roomkey — in April 2020, just a month after the COVID-19 pandemic prompted him to declare a state of emergency (PDF). Health experts were terrified that California, with its massive homeless population, would see the virus wreak havoc in crowded shelters and unsanitary encampments. The state rolled out a plan to move unhoused people with COVID-19, as well as those particularly vulnerable to the virus — people who were over 65 or had pre-existing respiratory, immune or other chronic diseases — into empty hotel rooms.