State awards Modesto $3.9M grant to create apartments for homeless young people
California has awarded Modesto $3.9 million to purchase and convert a downtown office building into a 14-unit apartment complex for young people who are homeless or at risk of being homeless.
Gov. Gavin Newsom’s office issued a news release Wednesday announcing the award, as well as awards for nine other projects across the state, including $24 million to Merced to purchase and convert a motel into 96 studio apartments.
The awards are part of Project Homekey, a state initiative. It provides grants to local governments to purchase and convert hotels, motels, vacant buildings and other properties into permanent housing with services.
Modesto’s $3.9 million award includes about $700,000 to help subsidize the building’s operations over several years. The subsidies can be used for such expenses as utilities, maintenance and supportive services for the building’s residents.
Modesto’s project is a partnership with the Center for Human Services, which operates two emergency shelters for young people, as well as a youth navigation center. CHS would own the building and provide residents with services such as counseling and help finding employment. It would hire a property manager for the building.
A city official said the grant award was excellent news.
Community Development Manager Jessica Hill said Modesto is always looking for ways to build affordable housing. She said working with the state is a great opportunity. “This is really important to us,” she said about the project.
The building is at 1208 Ninth St., is 7,446 square feet and would be converted into five one-bedroom and nine studio apartments. Officials have said the property manager would live in one of the apartments.
Center for Human Services Executive Director Cindy Duenas brought the building to the city’s attention. She has said the property is ideal because it is near services, has a history of serving young people (the county had operated a youth drop-in center there) and is the right size for CHS’s first permanent housing project.
The project is for people 18 to 25 years old whose income is no more than 30% of the area median income. For instance, that is $15,000 for a one-person household. The rents would be subsidized to ensure they are affordable.
Owners include ex-councilman
Former Modesto Councilman Brad Hawn and his wife are one-third owners of the property. They and two other couples bought it in 2004. Hawn serves on boards that work to reduce homelessness and has worked with Modesto and other local governments and nonprofits on projects to reduce homelessness.
The consultant the state is providing to help the city apply for Project Homekey funding told The Bee in December that she did not see a problem with the Hawns’ ownership because the city would get a third-party independent appraisal for the building, the state funding would cover no more than the property’s appraised value, and Hawn is not the project’s decision maker.
Duenas, the CHS executive director, thanked Modesto, Hawn and the Stanislaus Community System of Care for their efforts. The system of care awarded the project $914,000 toward subsidizing its operating costs. The system of care’s members include local governments, nonprofit organizations and homeless service providers.
California has an aggressive timeline for Project Homekey, in an effort to get these projects online as quickly as possible. Hill said Modesto expects the rehab and conversion of the Ninth Street office building to be completed by the end of the year. The property now is in escrow, and the sale should close within a week.
Hill said city officials plan on asking the City Council to accept the grant award at its April 12 meeting.
City has pending application
Modesto has a pending Project Homekey application with the state. Modesto is seeking $1.75 million toward the purchase and operation of a seven-unit apartment complex at 112 James St. The building is new construction and is nearly completed.
Modesto is partnering with the community development corporation Stanislaus Equity Partners on the project. The apartments would be for Stanislaus County Behavioral Health and Recovery Services clients who are homeless or at risk of homelessness.
Hill said the city is working on two more potential Project Homekey projects, but it is too early to provide details.
Modesto’s award is through Project Homekey’s second round. Newsom announced in September the state had $1.45 billion for round two. The state so far has awarded $830 million for 49 projects, according to Wednesday’s news release. The state continues to evaluate applications and expects to announce more awards in the coming weeks.
This story was originally published March 30, 2022 at 12:46 PM.
