California's Project Homekey is one of the most ambitious state-led efforts in the country to turn underused hotels, motels, and other buildings into permanent homes for people experiencing homelessness. Since its launch under Governor Gavin Newsom, the program has moved billions of dollars to local governments and nonprofits who buy properties, rehabilitate them quickly, and place formerly unhoused residents into permanent or interim housing.

How Homekey Started

Homekey grew out of Project Roomkey, a pandemic-era program that paid for emergency motel rooms to shelter vulnerable unhoused residents who could not safely quarantine in group shelters. As federal pandemic funds began to flow in 2020 and 2021, the state realized that many of the motels being used as shelter were for sale at favorable prices, and that converting them permanently into housing would be faster than building new units from the ground up.

The first Homekey round funded nearly 6,000 units in just a few months, a pace of housing production that California had rarely matched through traditional construction. The state followed up with additional rounds, layering in state general funds, bond dollars, and additional federal support.

The Numbers Behind the Program

By May 2022, the program had passed a milestone of 10,000 housing units funded. Governor Newsom announced a further $150 million that same month, bringing total Homekey funding to $3.75 billion. Later in 2022, the state awarded another $694 million across 35 projects in 19 communities, creating more than 2,500 additional units.

Awards have supported projects in nearly every region: large developments in Los Angeles County, mid-sized motels in Sacramento, and smaller properties in rural counties that would never have been able to fund traditional affordable housing construction at the same scale.

How Conversion Works

A typical Homekey conversion moves quickly compared with new construction. Local governments or nonprofits identify a motel or hotel with an owner willing to sell, apply for Homekey dollars, and close within a short window. Rehabilitation often includes adding kitchenettes, expanding bathrooms, replacing HVAC systems, and improving common areas. Because the buildings already exist, projects can open within months rather than the years a typical affordable-housing development requires.

Supportive services are built into the model. Residents moving from the street or a shelter usually receive case management, mental health and substance use treatment referrals, job training connections, and help enrolling in benefits like CalFresh and Medi-Cal. Some sites have on-site clinics or co-located service providers.

Who Lives There

Homekey sites primarily serve people exiting homelessness, with prioritization often given to residents who have been unhoused the longest or who have the most serious health conditions. Some projects focus on specific populations such as veterans, transition-age youth aging out of foster care, or seniors. A portion of units at many sites are reserved for permanent supportive housing, meaning long-term rental affordability with services, while other units may be used for interim housing with shorter-term stays.

Community Reception

Homekey projects have not been uniformly welcomed. In some cities, neighbors have raised concerns about property values, safety, or the pace at which residents are moved in. State law was changed to streamline the approval of Homekey projects, preempting certain local zoning reviews to allow conversions to move forward even when local opposition was strong.

Data from early Homekey sites has shown that fears about rising crime and falling property values generally did not materialize, and many local officials who were initially skeptical became program supporters after seeing operations up close.

Funding and Sustainability

One concern about Homekey is how operating costs get covered over the long term. Buying and renovating a building is expensive, but running it with supportive services year after year can cost more. California has paired Homekey capital dollars with ongoing operating subsidies through a separate fund, and projects have also tapped Medi-Cal reimbursements, federal housing vouchers, and county mental health dollars.

Without stable operating funding, Homekey sites risk turning into traditional subsidized housing that cannot support the deeper needs of its residents. The state has tried to structure later rounds so that service funding is built into the capital award rather than left as a gap.

The Bigger Picture

Homekey did not end homelessness in California, and it was never designed to. The state estimates tens of thousands more units are needed to house everyone currently unsheltered, and the program operates alongside a broader set of interventions including rental assistance, eviction prevention, and new construction.

What Homekey did prove is that buying and converting existing real estate at scale, with focused state funding and streamlined approvals, can produce housing faster than any other method currently available in California. That lesson is being copied in other states grappling with rising homelessness, and it has reshaped how policymakers think about the speed of new affordable housing production.

How Homekey Connects to Other Programs

Homekey does not operate in isolation. It fits inside a broader state effort that includes the Home Safe program for homeless adults receiving adult protective services, the CalWORKs Housing Support Program for families in the welfare system, Behavioral Health Bridge Housing for unhoused residents with serious mental illness, and the state's Encampment Resolution Fund. Each of these programs serves a different population or need, and Homekey sites often anchor a broader system of services around them. Local continuums of care coordinate placements across the programs so that residents can move from street outreach to temporary shelter to Homekey housing to longer-term supportive housing or market-rate rentals as their circumstances stabilize.

Who Owns Homekey Sites

Ownership of Homekey sites varies. Some properties are owned by local housing authorities, others by nonprofit developers, and a few by public-private partnerships. State funding typically comes with long-term affordability covenants — often 55 years — ensuring that once a motel has been converted, it continues serving people exiting homelessness for decades rather than reverting to market use. That durability is a core feature of the Homekey model and distinguishes it from pandemic-era emergency shelter arrangements that only lasted as long as federal emergency funds continued to flow.

California Hotel Transformation: Homeless Housing Through Homekey