Petaluma motel site in line for $15 million from state for homeless housing conversion

The Montero Way property is up for purchase by the city and conversion into homeless housing under the state Homekey Program.|

Petaluma is set to receive a $15.6 million state grant to help buy a motel and convert it to permanent housing for dozens of local homeless people.

The city last week announced the award from California’s Project Homekey program means it can move forward with purchasing the 60-room Americas Best Value Inn at 5135 Montero Way.

The site will house chronically homeless people who have spent years on the street and provide them with counseling and case management services.

“This project adds needed permanent supportive housing in Petaluma and South Sonoma County which will provide stability, safety, and services to those in need,” said Supervisor David Rabbitt, who represents Petaluma, in a statement.

Sonoma County’s most recent homeless census count results from February 2020 found nearly 600 unhoused people in Petaluma, Rohnert Park, Cotati and unincorporated parts of south county.

Countywide, the census identified over 2,700 homeless people, about 500 of whom were chronically homeless. Nearly two-third of those counted lived outside or in their vehicles. The rest lived in shelters.

Petaluma officials aim to open the site, named The Studios at Montero, by November. It will be operated by Santa Rosa-based affordable housing developer and property manager Burbank Housing. The nonprofit COTS, which runs a group homeless shelter in Petaluma, will provide wraparound services.

In addition to the state Homekey money, plans have called for Petaluma and Sonoma County to split a $1.5 million local match to purchase the property east of Highway 101 on the north side of the city.

The project is the sixth homeless housing site in the county to win approval for Homekey. That now includes five former hotels in Petaluma, Santa Rosa, Sebastopol and Healdsburg, as well as a “modular” housing site in Rohnert Park. Together, the projects have been awarded over $55 million to add around 230 permanent and interim housing units to the county’s system of care.

Two of those sites, the former Hotel Azura in downtown Santa Rosa and Sebastopol Inn near The Barlow shopping center, opened in late 2020 and currently house around 100 formerly homeless people.

Blue markers are proposed sites in the process of applying for state funding. Green markers are sites that have already received funding and yet to open. Yellow markers are sites currently housing formerly homeless residents.

Statewide, the $3.5 billion Homekey program is so far on track to fund the creation of almost 8,000 housing units, according to officials.

Last month, the state housing department informed cities and counties the current $200 million round of Homekey funding set aside for the Bay Area had been exhausted. That means four proposed homeless housing sites in Santa Rosa, Guerneville and Sonoma Valley — potentially adding over 100 units locally — may need to wait until the program’s next funding stage in October to learn if they’ll receive grants.

To help pay for operations at the Petaluma site, the city will look to a funding framework being set up by Sonoma County. It would provide $6.7 million annually over the next seven years to split among as many as eight homeless housing projects.

The money is planned to come from Homekey funds, additional state homelessness grants and Measure O, the county’s voter-approved quarter-cent sales tax for mental health and homelessness services. Federal housing vouchers, which help cover housing costs for low-income people, will also be a key part of the framework.

“It is this continuum — from shelter to permanency — that our coordinated effort with the State, County, Burbank Housing, and COTS really shines and delivers the safe, affordable, dignified places for people to belong to our community,” Petaluma City Manager Peggy Flynn said in a statement.

You can reach Staff Writer Ethan Varian at or 707-521-5412. On Twitter @ethanvarian

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