Sacramento County may lose millions in FEMA reimbursement for homeless shelters. Here’s why

Sacramento County opened emergency homeless shelters in four hotels in 2020 as part of a statewide strategy to reduce the transmission of COVID-19. In November, local agencies learned that because of a retroactive federal rule change, the county may not receive an expected Federal Emergency Management Agency reimbursement of $8.9 million for Project Roomkey motels.

The new rule imposed by FEMA would cap participants’ reimbursable stays at 20 days — the Centers for Disease Control and Prevention’s recommended isolation and quarantine period. Those who stayed in Project Roomkey sites longer than that starting in June 2021 would not have the costs associated with the additional days covered by the federal government.

County spokeswoman Janna Haynes said that nearly 1,300 people stayed in the program 21 days or more. Many of the participants had serious health conditions or were elderly, putting them at higher risk of severe illness or death if they were infected with COVID-19.

Last June, the county told The Sacramento Bee that, on average, participants lived in Roomkey motels for 277 days — more than nine months.

Two of the four hotels remained open as shelters until the summer of 2023, while the other two closed earlier. The rule change would apply to costs incurred between June 11, 2021, and May 11, 2023, a letter from FEMA reported by CalMatters shows. June 11, 2021, is the day that California ended its stay-at-home order.

FEMA had not previously indicated a length-of-stay cap would be imposed, and the county, Haynes said, did not limit participants’ time in the hotels as long as they met the requirements for the program.

Sacramento County has already received $8.8 million from FEMA to partially cover Project Roomkey costs; the total cost of the program, said Haynes, was $50.9 million. Ultimately, 2,584 people participated over the three years the Roomkey motels were open.

The county had expected to receive a further $10.7 million to cover certain expenses. But now, Haynes said, “Because of the recent change in rules from FEMA, the total eligible reimbursement costs may be reduced to $1,658,762.” Of that $10.7 million pending request, she said, $8,935,625 may not be eligible because participants stayed three weeks or more.

Where did Roomkey participants go?

Project Roomkey was a state program started under Gov. Gavin Newsom, and FEMA agreed to reimburse some costs during the federal pandemic emergency declaration.

In these non-congregate motel shelters, people could socially distance and curb the spread of the highly contagious virus. Though Roomkey catered to homeless people, it was not designed as a rehousing program, and only 25% of the participants — 650 people — exited Project Roomkey into permanent housing over its three years of operation.

More than 800 people (32%) moved on to a different temporary shelter. More than 1,000 people went back to the streets or to an “unknown destination.” Haynes said 45 people died while still in the program.

The long-term housing results improved when the county established a more rigorous rehousing program as it prepared to shut down the last two motels in 2023. Haynes said, “The success skyrockets with that dedicated focus.”

Of the last 192 people living in Roomkey rooms on May 1, 2023, Haynes said 64 of them moved to permanent housing. Another 47 people moved to a different temporary shelter, 22 moved back to the streets and three participants died. Ten months later, there are still 56 people actively participating in the rehousing program, living in temporary shelters.

At one time, the county planned to close its Roomkey motels in 2022. Two of the motels — the Vagabond Inn downtown and the Comfort Inn in Rancho Cordova — ultimately continued serving homeless residents into summer 2023.

Average lengths of stay in the programs varied from county to county. FEMA said the California Governor’s Office of Emergency Services reported that high-risk individuals stayed in Roomkey motels for an average of 37 days.

FEMA did not cover any wraparound services that people used to try to get into stable housing.