California Announces Six More Prop. 1 Projects to House and Support Veterans and Others with Behavioral Health Challenges

Sacramento, CA

Governor Gavin Newsom today announced six Homekey+ awards to help fund the development of 321 permanent supportive homes with services for veterans and other Californians who are experiencing or at risk of homelessness and living with behavioral health challenges, along with six manager units. The funding is a result of Governor Newsom's voter-approved Proposition 1 which is transforming California's mental health system through a $6.4 billion Behavioral Health Bond for treatment settings and permanent supportive housing

"California has built a strong system to help local communities address the homelessness crisis," said Governor Gavin Newsom. "For decades prior to my administration, state leaders turned their backs on those dealing with mental health and addiction. I am committed to rebuilding a strong system of support and accountability to ensure that no one suffers on our streets without help. No more excuses - everyone must step up to address this crisis."

In November 2024, the California Department of Housing and Community Development (HCD), in collaboration and partnership with the California Department of Veterans Affairs (CalVet), released a $2.145 billion Notice of Funding Availability (NOFA) for permanent supportive housing through the new Homekey+ program. Modeled after Governor Newsom's highly successful Homekey program, Homekey+ was created with funding from voter-approved Proposition 1, which also provides funding to build residential care settings and expand access to behavioral health treatment.

With today's awards, Homekey+ has so far awarded $284.6 million to support 16 projects that will create 825 affordable homes with supportive services throughout California. Of these homes, 164 are reserved for veterans experiencing or at risk of homelessness with behavioral health challenges.

"California's Homekey+ program is investing in people and neighborhoods across the state, providing affordable housing and supportive services for Californians who are experiencing homelessness and living with behavioral health challenges," said Business, Consumer Services and Housing Agency Secretary Tomiquia Moss. "The supportive housing projects being awarded today are a testament to the Governor's ongoing partnership with local jurisdictions and unwavering commitment to create housing for all Californians, including our Veterans and our most vulnerable."

"This tremendous partnership with CalVet to house and support veterans and other Californians who are struggling is testament to the Governor's fervent commitment to addressing a homelessness crisis decades in the making," said HCD Director Gustavo Velasquez. "Across agencies and departments, we are working together-and with local partners-focusing our combined resources to build on ongoing successes in reducing unsheltered homelessness."

"This new round of Homekey+ awards is more good news for California veterans and their families," said CalVet Secretary Lindsey Sin. "We appreciate the hard work of the California Department of Housing & Community Development and other partners in creating innovative housing solutions across the state for those who have served our nation with honor and courage."

Approximately $1.033 billion in Proposition 1 bond funds are available through Homekey+ to cities, counties, housing authorities, and tribal entities for projects serving veterans. Another $1.11 billion is available for projects serving all target populations, through a combination of Proposition 1 bond funds and Homeless Housing, Assistance, and Prevention (HHAP) program funds. The Homekey+ NOFA allocates funding by region based on a proportionate share of veterans and others experiencing homelessness, and by share of extremely low-income households whose rent is more than half of their income. There are also allocations for rural projects and for projects serving youth experiencing or at risk of homelessness. Homekey+ applications will continue to be reviewed and approved on a rolling basis.

The following awards announced today total $106.2 million to create 321, permanent supportive homes, with 76 units for veterans, in addition to six managers' units:

• The City of Rancho Cordova, in partnership with Mercy Housing California, will receive $31.5 million in Homekey+ funding for the Mather Veterans Village Phase 4 Project. This new construction project will provide 69 much-needed permanent supportive homes for veterans experiencing homelessness with behavioral health challenges, in addition to one manager's unit. Located on the former Mather Air Force Base, this development builds upon Veterans Housing and Homelessness Prevention (VHHP) program funding previously awarded by HCD as part of the broader Mather Veterans master plan. All residents will have access to comprehensive medical and behavioral health services at the Veterans Affairs Medical Center located just one block from the project site. On-site management and extra support from Nations Finest and Mercy Housing are in place to collaborate with County Behavioral Health to better meet resident needs.
• The City of Los Angeles, together with A Community of Friends, will receive nearly $20.5 million in Homekey+ funding for the Estrella Azul Project. The permanent housing project will consist of 80 homes, including one manager's unit and two units not assisted by Homekey+ funds. The remaining 77 units are dedicated to individuals experiencing homelessness or chronic homelessness with behavioral health challenges. To support resident health and well-being, the project will include a 615-square-foot fitness room, as well as outdoor amenities such as a BBQ area and gardens. In addition to Homekey+ funding, the project has been awarded financing from the National Housing Trust Fund (NHTF), No Place Like Home (NPLH), Community Development Block Grant (CDBG), and Infill Infrastructure Grant (IIG) programs-totaling more than $30.9 million. The Los Angeles County Department of Mental Health and Department of Health Services will provide ongoing specialty mental health and supportive services. As the project moves forward, A Community of Friends will engage with local stakeholders to ensure the development honors the neighborhood's broader history and cultural identity.
• The City of Chula Vista, in partnership with Wakeland Housing and Development Corporation, will receive $8.4 million to convert the Palomar Motel into a 28-unit permanent supportive housing site with 20 homes for individuals at risk of homelessness, seven homes designated for Veterans, and one onsite manager unit. The project will utilize a combination of project-based vouchers and HUD Veterans Affairs Supportive Housing (VASH) vouchers to help residents pay their rent. To further enrich and support the lives of the residents, the lead service provider-People Assisting the Homeless (PATH)-will provide case management services in conjunction with adult education, health and wellness services, skill-building classes, and life skills training. Additionally, the VA will provide specialized services and case management to veterans living there.
• The City of Oakland, Mark Twain Partners, and MPI Properties will receive nearly $33 million to rehabilitate and newly construct a continuation of the Mark Twain Homes project, a four-building development. The continuation of this project facilitates the conversion to a full permanent supportive housing project. This conversion adds another seven units to the project while making needed improvements to preserve the 102 existing homes, resulting in 109 units, including two manager units, to serve individuals experiencing homelessness, chronic homelessness, or at risk of homelessness. The rehabilitation and construction of the project includes the addition of a community room, space for supportive services, bicycle parking, landscaping, and a common space for all residents. The project is central to necessary amenities such as a full-scale grocery store, a medical clinic, a public park, and a public library.
• The City of Napa and Burbank Housing Development Corporation will receive just over $7.6 million to acquire and rehabilitate the 4th Street & Division Apartments, a two-site project consisting of 24 homes, including one manager's unit, to serve people at risk of homelessness with behavioral health challenges. Located in a walkable, well-established neighborhood near downtown Napa, the project offers residents convenient access to grocery stores, public transit, and schools.
• The County of Glenn, in partnership with Habitat for Humanity Yuba/Sutter, Inc., will receive approximately $5.2 million to develop the Purpose Place Apartments Phase III, a new construction cost containment project. This two-story building will provide 18 homes to serve people experiencing homelessness with a behavioral health challenge. Additionally, the project will leverage California Advancing and Innovating Medi-Cal (CalAIM) operating subsidies to support high-quality, wraparound services for residents.

Across three rounds of the original Homekey program, HCD awarded $3.6 billion to fund 261 projects with 15,962 homes expected to house more than 175,000 Californians over the projects' lifetimes.

From the very first moments of the Newsom administration, the national crisis of housing affordability and homelessness has been addressed with ingenuity, seriousness, and expertise. No other state has devoted as much time, attention, and resources to these twin problems. Governor Newsom is creating a structural and foundational model that will have positive impacts for generations to come:

✅ Addressing mental health and its impact on homelessness - Ending a long-standing 7,000 behavioral health bed shortfall in California by rapidly expanding community treatment centers and permanent supportive housing units. In 2024, voters approved Governor Newsom's Proposition 1 which is transforming California's mental health systems with a $6.4 billion Behavioral Health Bond for treatment settings and housing with services for veterans and people experiencing homelessness, and reforming the Behavioral Health Services Act to focus on people with the most serious illnesses, provide care to people with substance disorders, and support their housing needs. In May, Governor Newsom released $3.3 billion of this funding to create over 5,000 residential treatment beds and more than 21,800 outpatient treatment slots for behavioral health services.

✅ Creating new pathways for those who need the most help - Updating conservatorship laws for the first time in 50 years to include people who are unable to provide for their personal safety or necessary medical care, in addition to food, clothing, or shelter, due to either severe substance use disorder or serious mental health illness. Creating a new CARE court system that creates court-ordered plans for up to 24 months for people struggling with untreated mental illness, and often substance use challenges.

✅ Streamlining and prioritizing building of new housing - Governor Newsom made creating more housing a top state priority for the first time in history. He has signed into law groundbreaking reforms to break down systemic barriers that have stood in the way of building the housing Californians need, including broad CEQA reforms.

✅ Creating shelter and support - Providing funding and programs for local governments, coupled with strong accountability measures to ensure that eachlocal government is doing its share to build housing, and create shelter and support, so that people rescued from encampments have a safe place to go.

✅ Removing dangerous encampments - Governor Newsom has set a strong expectation for all local governments to address encampments in their communities and help connect people with support. In 2024, Governor Newsom filed an amicus brief with the Supreme Court defending communities' authority to clear encampments. After the Supreme Court affirmed local authority, Governor Newsom issued an executive order directing state entities and urging local governments to clear encampments and connect people with support, using a state-tested model to address encampments humanely and provide people adequate notice and support.