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New Interim Housing Development in Palo Alto to Help People Experiencing Homelessness

The County of Santa Clara is providing $4 million in Challenge Grant funds to support Homekey Palo Alto, a new shelter slated to open in 2025.

Developers have begun construction on a new interim housing development in Palo Alto for people experiencing homelessness, with financial assistance from the County of Santa Clara.

The County is contributing $4 million to Homekey Palo Alto, a shelter with the capacity to provide temporary housing to more than 200 people a year along with on-site support services.

The shelter, which is expected to open in early 2025, is the latest example of the effort by the County and regional partners to address a pair of intricately linked crises in Silicon Valley: housing affordability and homelessness. 

Homekey Palo Alto is the 10th project in Santa Clara County to receive funding from the State of California’s Homekey program, launched in 2020 to rapidly expand housing for people experiencing or at risk of homelessness throughout the state. And it is one of the first projects to receive funding from the County’s Challenge Grant program, which committed $40 million to the construction of 1,600 interim housing units to support individuals experiencing homelessness.

County Supervisor Joe Simitian, who led the creation of the Challenge Grants in 2021 with Supervisor Otto Lee, said at the Halloween groundbreaking for Homekey Palo Alto on Tuesday that the challenges of housing affordability and homelessness are dire, but each step of progress provides meaningful benefits to county residents. 

“I’m one of those who believes it is better to light one candle than curse the darkness,” Simitian said. “Homekey Palo Alto represents 88 candles – 88 units that for all the folks who live here, will absolutely make the difference in their lives. 

“It will make a difference for the older resident whose only constant companion has perhaps been their dog – now they’ll have a safe place to play,” the supervisor continued. “It will absolutely make a difference for the individual who is simply down on their luck (and) just needs some help putting their resume together and navigating the valley’s job market. And it will absolutely make a difference, in the spirit of today, for the parent or parents whose kids finally have a place of their own, maybe for the first time, to sit down and count and compare all the candy they got trick or treating.”

An artist's rendering of the Homekey Palo Alto project.
An artist's rendering of Homekey Palo Alto.

Homekey Palo Alto, located at 1237 San Antonio Road near San Francisco Bay, will feature 88 rooms as well as showers, a kitchen, on-site laundry and outdoor spaces including a playground, garden, dog run and picnic area. 

The City of Palo Alto and nonprofit LifeMoves are co-developers of the $37.2 million project, which received funding from a variety of sources, including $21.7 million from Homekey, $5 million from private donor John Sobrato, $4.5 million from Palo Alto, and $4 million from the County’s Challenge Grant program.

The project will be built using modular construction, which is faster than traditional building methods. Volumetric Building Companies will build customized units in Tracy that will be shipped to Palo Alto and assembled on the property.

The County Office of Supportive Housing will help provide funding to support the services at Homekey Palo Alto.

“Homekey Palo Alto is a wonderful opportunity to create high-quality temporary housing for residents who need a place to live,” said Consuelo Hernandez, director of the County’s Office of Supportive Housing. “We are excited to work with the City of Palo Alto and LifeMoves to support Homekey residents in creating the stability and security they need to thrive.”

It has been about three years since the first Homekey project was awarded in Santa Clara County. During that time, Homekey projects in the county have averaged a 93% retention rate and helped more than 1,000 people into temporary and permanent housing. 

The County and regional partners are pursuing multiple initiatives to make housing more affordable and help get people off the streets. 

For instance, Measure A – the County’s $950 million affordable housing bond, approved by voters in 2016 – has helped fund the construction of more than 1,700 affordable housing units. Upward of 1,200 units are currently under construction. In addition, the 2020-2025 Community Plan to End Homelessness aims to double the amount of temporary housing and shelter beds in Santa Clara County to serve 2,000 additional households each night. 

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