California Homeless Housing Project Becomes $19 Million "Money Pit"

A California program aimed at rapidly housing the homeless has become a protracted and costly endeavor in El Monte, where a former motel purchased for conversion remains unfinished years after its acquisition. The project, part of Governor Gavin Newsom's $3.8 billion Homekey initiative, has consumed approximately $19 million in taxpayer funds without full operational status.

The former M Motel in El Monte was bought in November 2020 for $17.7 million using Homekey funds, with the intention of converting its 93 rooms into transitional housing. Additional state, federal, and county funding, totaling over $5.8 million, has been allocated for rehabilitation and operational support. Los Angeles County Supervisor Hilda Solis, for whom the project is now named Hilda Solis Rose Court, has also provided $7.5 million in funding to address budget shortfalls and $2 million for ongoing operations and services.

Despite the significant investment and an initial partial opening in 2022 where 39 individuals were housed, extensive renovations have continued. State filings from 2024 indicated work included re-roofing, ADA compliance upgrades, and repairs to structural and water-damaged elements, along with new plumbing and electrical systems. The project was slated for a January 2025 opening, transitioning from temporary to permanent supportive housing.

However, residents living adjacent to the site have endured years of disruption, including early morning construction noise, dust, and repeated gas leaks. "Why did they spend too long to fix the building?" asked Edgar Gudiel, a resident of the neighboring Baldwin Valley Apartments. "They're spending too much, too long, too much time."

Concerns escalated in April when a construction-triggered gas line break forced an evacuation. Another leak in August led to the closure of the entire street. "Now that I know the severity of what the damage that [leak] can do, I am worried because I have a child and I have another one on the way," said a pregnant resident who requested anonymity, citing breathing problems and fear for her unborn child's safety.

City officials have acknowledged that post-acquisition assessments revealed the motel required more extensive interior and exterior work than initially identified, driving up rehabilitation costs beyond the original budget. "I felt like our lives don’t matter to these out-of-touch, corrupt politicians," said resident Ian Jameson.

El Monte city officials, including City Manager Alma Martinez and Director of Economic and Community Development Steve Fowler, did not respond to requests for comment. A spokesperson for California's Department of Housing and Community Development, Jennifer Hanson, stated the department is aware of the issues and monitoring progress, attributing delays partly to asbestos remediation and coordination challenges. El Monte has been restricted from receiving further HCD funding until the Rose Court project is completed.

Critics like Wayne Winegarden of the Pacific Research Institute argue that the Homekey model, while well-intentioned, is prone to inefficiency and lacks adequate oversight, negatively impacting surrounding communities. "What happens to the community absolutely matters when you're reducing people's quality of life," Winegarden said.

Neighbors remain skeptical about projected completion dates, with resident Luke Boyer expressing frustration: "I don’t know what’s going on over there, but it’s made me definitely frustrated and, you know, anxious, too."