Did Newsom’s $3.8 Billion Hotels-to-Housing Program Pay Off? CalMatters Got Records to Find Out
CalMatters found the $3.8 billion program housed nearly 13,500 people, but thousands of promised homes still do not exist and oversight was limited.
- A CalMatters investigation into Governor Gavin Newsom's $3.8 billion Homekey program reveals significant oversight gaps, with thousands of promised homes remaining unfinished across 250 reviewed projects.
- Created in 2020 amid the COVID-19 crisis, Homekey aimed to rapidly convert buildings into housing for homeless residents by cutting red tape, but expedited timelines and lack of built-in oversight contributed to budget overruns and project failures.
- Shangri-La Industries, which secured nearly $115 million in contracts to build 500 homes, faces federal indictment and civil lawsuits; prosecutors allege the firm knowingly submitted fake bank records to boost its credentials with state officials.
- Smaller nonprofits also struggled under the program's demands; Firm Foundation was forced out of business after its Vallejo project ran out of money and remains liable for more than $1 million in unpaid bills.
- Nearly 13,500 people now reside at Homekey sites across California, yet the lack of public accounting for stalled projects and no guaranteed state funding for ongoing operations raise questions about the program's long-term viability.
20 Articles
20 Articles
Associated Press News
Did Newsom’s $3.8 billion hotels-to-housing program pay off? CalMatters got records to find out
As COVID-19 tore through California, Jennifer Hark Dietz had a decision to make. The state was making perhaps its biggest push ever to get people off the street, offering up billions of dollars for cities and organizations like hers to turn old motels into new homes.
CalMatters spent two years researching Homekey. Here’s what we found
Resident Sherry Collins, 66, inside her room at Live Oak Apartments in Ukiah on Feb. 26, 2026. Photo by Manuel Orbegozo for CalMatters Gov. Gavin Newsom created Homekey in 2020 amid the peak of COVID-19 and pressure to do something about the state’s persistent homelessness crisis. The state program sought to get money into the hands of local governments to create housing for homeless residents while cutting red tape. But the program came with …
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