The feds won’t reimburse California for $300 million for homeless housing during COVID. Congress wants answers

(Genaro Molina/Los Angeles Times)

The feds won’t reimburse California for $300 million for homeless housing during COVID. Congress wants answers

California politics, COVID-19 pandemic, homepage news, mental health

Andrea Castillo

March 12, 2024

California cities and counties could be blamed for the more than $300 million they spent to house thousands of homeless residents in hotels during the COVID-19 pandemic.

At the time, local officials took this unprecedented step under the assumption that the federal government would reimburse much of their costs for providing shelter, without a time limit, to unhoused people at increased risk of severe symptoms. But the Federal Emergency Management Agency says they were mistaken and that the agency had only agreed to pay for hotel stays of up to 20 days.

Now concerned members of the California delegation want answers. A Monday letter


by Rep. Robert Garcia (D-Long Beach),


signed by 34 others

d D

Democratic members and a Republican Representative David Valadao (R-Hanford),

asks FEMA Administrator Deanne Criswell to reconsider and reimburse already cash-strapped cities.

“We are talking about the largest loss of life event we have had to experience in more than a generation,” Garcia said. “This idea that in this massive emergency we would fail to fully reimburse cities and counties for housing people … is insane. FEMA has a responsibility to solve this problem.”

Los Angeles stands to lose $60 million from the general fund, nearly a third of the $194 million submitted to FEMA for reimbursement. The city is already facing staffing constraints due to a budget shortfall.

“Every dollar would help us fill some of those vacancies,” said Assistant City Manager Ben Ceja.

The issue stems from a letter sent in October. 16 from FEMA Regional Administrator Robert Fenton to Nancy Ward, the director of California’s Office of Emergency Services.

Gov. Gavin Newsom ended California’s pandemic stay-at-home order on June 11, 2021, at which point more than 70% of adults had received at least one vaccine dose.

Fenton told California officials that FEMA would limit refunds

during the day

for the two years after the order was lifted, to hotel stays of up to 20 days. That is in accordance with the [Centers for Disease Controls] recommended isolation and quarantine period, he wrote.

Emergency hotel placements were offered to people who had been exposed to or tested positive for COVID-19 and had nowhere to isolate, and to those considered high risk, such as people over 65 or with underlying health conditions. Unhoused people in encampments and congregate shelters were generally at greater risk of exposure to the virus.

Fenton wrote that the rules for reimbursement were already laid out in letters to California on March 27, 2020. Those requirements did not change, he said, although the earlier letters did not explicitly set the 20-day limit.

The COVID-19 pandemic was the largest disaster response in FEMA history. The agency said it has provided California with more than $9.4 billion in COVID-19-related assistance, and that all states and local governments are subject to the same policies and reimbursement process for sheltering the homeless.

FEMA, through its Public Assistance Program, is working closely with state, tribal, territorial and local governments to provide all eligible and available funding for reimbursement, and will continue to do so for those impacted during the pandemic” , said acting FEMA Press Secretary Daniel Llargus.

California officials tell a different story.

After declaring a state of emergency due to COVID-19, Newsom launched Project Roomkey in April 2020 to help unhoused people safely isolate themselves in hotels and motels to prevent the virus from spreading.

Approximately 62,000 people were accommodated through the program.

Local counties and cities shouldered the costs of hotel rentals and food and service providers, expecting to be reimbursed. FEMA’s efforts were critical to California’s ability to protect its residents, Garcia’s letter said.

Initially, FEMA agreed to cover 75% of eligible expenses, but in January 2021, the agency agreed to reimburse all costs.

Fenton’s letter in the fall came as a shock.

This October 2023 policy decision comes long after local governments in our state had already spent significant local resources under Project Roomkey with the full expectation of reimbursement, members of Congress wrote. We note that FEMA has never noticed a ceiling before.

California officials argue that the indefinite stay was important for public health and to give residents a chance to transition to other housing. The program wasn’t perfect in Los Angeles; it never came close to the goal of securing rooms for all of the estimated 15,000 eligible homeless people, although there was a long waiting list and many of those housed left without explanation.

Reimbursement losses range from hundreds of thousands to hundreds of millions: $114 million for the city and county of San Francisco, $22 million for Ventura County and $200,000 for Madera County. Some jurisdictions that have already received compensation may be forced to pay back the money.

Garcia said he knows Project Roomkey well from his time as mayor of Long Beach. Long Beach stands to lose $6.2 million in housing for homeless residents.

The situation is eroding trust between California sites and FEMA, he said.

“I remember sitting at the table when cities like mine were told they would be fully reimbursed for this,” Garcia said. “So it’s quite disturbing and frankly unacceptable that counties and cities across the state could essentially lose more than $300 million in prior expenditures that we had every reason to believe would be reimbursed.”

In January, the Governor’s Office of Emergency Services sent FEMA a letter of encouragement

it them

to reconsider the cap.

“California is committed to maximizing federal assistance to communities and has aggressively pushed for FEMA to rescind its decision to deny promised assistance to local governments,” said emergency services spokesman Brian Ferguson.

If there had been clearer guidelines, Los Angeles would have recommended limiting the program to stays of 20 days or less, city manager Matt Szabo said.

Wendy Huff Ellard, a disaster recovery attorney who represents four California counties seeking reimbursement from FEMA, as well as others in Texas and New York, said some localities will face significant difficulty in recovering from the loss of the money that they spent.

“The cities and counties in this case relied on FEMA to fund the program,” she said. “It’s impossible to go back and change what they did.”

Ellard said California is at the forefront of what she thinks will be denials across the country. As reimbursement requests poured in, she said, “I think FEMA realized how big the programs were and maybe they should have issued more specific parameters.”

Llargus, the FEMA spokesman, said that is not true.

“FEMA has not revised eligibility for non-congregate shelters or other COVID-19 related activities to reduce costs,” he said.

Once FEMA makes application decisions, California governments that receive denials can initiate an appeal and arbitration process. That could take almost a year, Ellard said.


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