The historic Lake Merritt Lodge building currently serves as transitional housing for 115 formerly unhoused people. Credit: Natalie Orenstein

Oakland officials have called the Lake Merritt Lodge transitional housing program a “spectacular success” and a “robust intervention,” but it could close after less than two years in operation.

The city began leasing the historic yellow building by the lake last summer. The shelter program serves 115 people at a time, many of whom were previously living in encampments nearby. City staff said two-thirds of the people who’ve left the shelter so far have been moved into permanent housing, and another 80 have Section 8 vouchers and are searching for units.

“I want to acknowledge just how important this resource is to the homeless community,” said City Councilmember Nikki Fortunato Bas at Tuesday’s council meeting. The facility serves residents who are either older than 65 or have an underlying medical condition, and around 72% of the residents are Black, reflective of Oakland’s unhoused population.

Last summer, John “Lee” Thomas told The Oaklandside he’d been happy to move from his tent at the Athol Plaza tennis courts to the regal building on Harrison Street, where he was able to bring his dog Scrappy. 

“You get your own private bathroom in your room and two twin beds—you just have to bring your own TV,” he said. 

So far, Oakland has taken advantage of a Federal Emergency Management Agency COVID-19 reimbursement program to cover the costs of renting the Lake Merritt Lodge and paying nonprofit Housing Consortium of the East Bay (HCEB) to operate the shelter. The FEMA reimbursement program was recently extended until July 1, but the city will have to pick up the costs after that if it’s not extended again. And the costs are steep: $59,000 per bed per year, compared to around $21,000 at similar facilities in Oakland.

“What’s making this building so much more expensive than our other programs is the fact that we’re paying leasing costs on top of the services costs,” Lara Tannenbaum, Oakland’s Human Services manager, told the City Council. The city pays $132-$182 per room per night, “basically a hotel rate,” Tannenbaum said.

Several councilmembers said they’d like to see the city buy the building, a move that’s also been encouraged by homelessness advocates who’ve put pressure on local officials. According to staff, Oakland did at one point pursue purchase, filling out an application for state “Homekey” funding. But the property owner and HCEB never submitted their piece. Alameda County also sought to buy the building in 2020, but county officials withdrew, saying they couldn’t reach an agreement with the owner and the building required too many adjustments.

Mahnaz Khazen, who owns the building through her company Vima Harrison 1 LLC, told The Oaklandside she doesn’t know exactly what happened with the Homekey process, but said she’s open to a potential sale to the city in the future. A real estate broker who owned the lodge building when it was the dormitory for Hult International Business School, Khazen recently incorporated a nonprofit called Kamco Housing, with the intention of “building and managing” similar transitional housing facilities throughout California. 

Whether the city buys the lodge or Khazen hangs on to it, she said wants the property to continue to “serve the underserved population, which we have done successfully for almost a year.”

On Tuesday, the City Council voted to extend Oakland’s lease of the Lake Merritt Lodge through June, given FEMA’s decision to extend financial aid for shelters to July 1. But city staffers asked the council to give them direction on what to do with the building after that.

The council voted to stop accepting new residents at the shelter beginning in July, allowing time to find housing for all the remaining occupants before a full closure of the program in December. This scenario was the middle-ground option proposed by staff, who also floated scenarios where the shelter would close as soon as this fall or as late as summer 2023.

Assuming the FEMA reimbursement program is not extended again, the option selected by the council leaves the city with a $3.4 million funding gap to cover the cost of keeping the lodge open from July 1 through December. The council will have to find this money when it reviews the city budget in the summer.

City Councilmember Rebecca Kaplan was among several officials Tuesday who urged the city to continue pursuing acquisition of the building.

“It’s important to acknowledge when we take action on something and it works,” she said. “We are really making a difference here for people’s lives. Let’s really, really not let it close.”

Curtis James, a formerly unhoused resident who now works for HCEB helping incoming Lake Merritt Lodge residents with their paperwork, agreed when he spoke with The Oaklandside earlier this year.

“It takes people that need a place to stay off the street,” he said.

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 lives in Oakland, grew up in Berkeley, and has only left her beloved East Bay once, to attend Pomona College.