Using state and federal aid, Oakland could rent, and ultimately buy, buildings like the old Lake Merritt Lodge for homeless housing. Credit: Natalie Orenstein

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Update, March 30: The City Council voted unanimously Monday to rent the old Lake Merritt Lodge for use as an emergency homeless shelter for 92 medically vulnerable residents as soon as April. The vote authorizes the city to rent the building for six months, with a possibility of extending the term to a year, and a service operator will be selected before it opens. The full year of the lease could cost the city up to $3.5 million, which would be reimbursed by the federal government.

Original story, March 23: Oakland city staffers are in talks to rent the old Lake Merritt Lodge building, at Harrison Street and Grand Avenue, for a hotel-style shelter that could offer 90 unhoused people a place to sleep.

The city’s negotiations to rent the building follow a failed effort by the county last June to buy the six-story, 92-unit lodge—which has served as a YWCA boarding house, an SRO, and a business school dorm—using COVID-19 relief funds to shelter, and eventually house, medically vulnerable residents. The county’s deal collapsed when it couldn’t agree with the owner on the terms and what work the property needed.

In a memo to the council, Oakland staffers wrote that they’re seeking a six-month lease that would cost $2 million for the rooms plus the cost of contracting with a service provider.

The city’s opportunity to lease the lodge is thanks to a decision made by President Biden in January to have FEMA fully reimburse local governments that open “non-congregate” COVID-19 shelters, meaning those where guests are sleeping in private rooms, not one large open space. Previously, the federal government was reimbursing up to 75% of the cost of those shelters, including several run by Alameda County in Oakland and elsewhere. 

The Biden announcement prompted at-large Oakland City Councilmember Rebecca Kaplan to make public pleas for city staff to find hotels to rent. There are an estimated 4,000 people living without permanent housing in Oakland, and since the virus began spreading, there has been widespread concern about its impact on a population of people less able to isolate themselves. 

“Staff has toured other hotels and will continue to pursue additional hotel options and other FEMA reimbursable non congregate shelter options, but timing is critical since the FEMA reimbursement ends September 30, 2021,” the memo says.

Mahnaz Khazen, the owner of the old Lake Merritt Lodge, said the discussions are “very, very preliminary,” but that she’s open to renting the building, which she restored and renovated when she bought it in 2013.

“It doesn’t help anyone to keep the building vacant,” she told The Oaklandside. “I’m very excited to be able to help the community that needs FEMA’s help.” 

Members of the Homeless Advocacy Working Group and ShelterOak, two local groups supporting homeless residents, wrote a letter saying Oakland should go a step further by purchasing, not just renting, the lodge, given the expected influx of federal stimulus money.

“The Lake Merritt Lodge is perfectly suited to house the largely neglected demographic of unhoused women, women with children, and elderly and disabled females who are suffering deplorable, abusive conditions while living outside and Unprotected,” the groups wrote, likely alluding to the building’s origins as a boarding house for young women.

“Substantial” state funds expected for buying hotels this summer

Even with the FEMA reimbursement boost, city staff told councilmembers at a Life Enrichment Committee meeting on Monday that Oakland is limited in its ability to open hotel shelters. 

The federal government will only reimburse shelters serving people who are 65 or older or who have specific medical conditions. Additionally, the money fronted by the city must be funds that were not previously budgeted for anything else, such as tax revenue designated for homeless services. 

“It really has to be something brand new, and specific to the COVID response,” said Lara Tannenbaum, the city’s community housing services manager. She cautioned that FEMA will cover only the hotel lease and program components like food, and won’t pay for case management or resources to help residents move into permanent housing after their stays. Staff told councilmembers it’s “critical” to set aside funds for that purpose if the city leases hotels.

But Oakland could soon be in a position to buy the buildings that it rents, potentially keeping shelters open long past September. Sara Bedford, Oakland’s human services director, said the city is expecting another opportunity this summer to apply for funding through Homekey, the state’s program enabling cities to use COVID-19 aid to buy buildings for permanent housing. 

“We believe that is the most important opportunity,” said Bedford, noting that this round of funding is likely to be “substantial.” She said the governor’s office encouraged Oakland to “do FEMA hotels with that understanding,” meaning to lease hotels in the short term and apply for state dollars to buy them this summer. 

During the last round of Homekey awards, Oakland received money to buy a former dormitory building in Rockridge. The city is already moving seniors and families into this new supportive housing site. Oakland also got two other awards, which it used to give to local organizations to purchase the the Inn at Temescal hotel and a number of private houses spread throughout the city. A fourth Oakland proposal was approved, allowing the nonprofit Oakland & The World Enterprises to purchase the Hotel Travelers SRO, but that plan fell through and the state immediately took that portion of the money back, staff said. 

Alameda County has purchased two hotels with COVID-19 relief, and continues to run seven shelters, a spokeswoman said this week. The county had stopped accepting new guests at those, but reversed that decision and opened a new shelter after Biden’s reimbursement announcement. 

While the city tries to lease and ultimately purchase hotels, the city will also consider launching other emergency shelter programs—including “co-governed” encampments where residents help run their communities alongside a service provider, and trailer parks where RV owners would pay the city a fee. The city has $3.9 million in state and other funds available for those programs, staff said Monday.

While some councilmembers have told city staff to act faster in setting up those programs, staff told councilmembers at Monday’s meeting that elected officials need to propose locations in their districts for temporary shelter initiatives like co-governed camps. 

District 2 Councilmember Nikki Fortunato Bas made a motion Monday that will go to the full council next. If passed there, councilmembers will submit proposed sites in their districts to staff, who will come back to the council on May 4 with proposals for programs.

“There have been moments of frustration in terms of being able to use public land for public good,” Bas said Monday. “But it’s clear really good work is moving forward.”

Natalie Orenstein covers housing and homelessness for The Oaklandside. She was previously on staff at Berkeleyside, where her extensive reporting on the legacy of school desegregation received recognition from the Society of Professional Journalists NorCal and the Education Writers Association. Natalie’s reporting has also appeared in The J Weekly, The San Francisco Chronicle and elsewhere, and she’s written about public policy for a number of research institutes and think tanks. Natalie grew up in Berkeley and has only left her beloved East Bay once, to attend Pomona College.