City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-01554 9/16/2025
Homelessness Workshop Follow-Up: Update on Strategies Addressing Homelessness in the City of Sacramento
File ID: 2025-01554
Location: Citywide
Recommendation: Review, comment, and provide direction on the development and implementation of new strategies for increasing the capacity of the City’s temporary shelter program, including new safe camping and safe parking programs as well as ultra-affordable interim housing in “micro- communities” for specialized populations such as seniors experiencing homelessness. Pass a Motion authorizing the Interim City Manager or designee to: 1) develop a monthly program fee for micro-community participants of no more than 30% of their monthly gross income to help sustain and expand the program; and 2) develop a voucher-based model for the City Motel Program to better support client choice, create additional cost savings, and assist in maintaining the program.
Contact: Brian Pedro, Director, (916) 808-7816, [email protected], Department of Community Response
Presenter: Brian Pedro, Director, (916) 808-7816, [email protected], Department of Community Response
Attachments:
1-Description/Analysis
Description/Analysis
Issue Detail: Homelessness is an issue that impacts communities without regard to geographic or political boundaries and for which there is no single answer or approach. The City of Sacramento plays a significant role in addressing homelessness and has been working in partnership with the County of Sacramento and the Sacramento Continuum of Care to create a systemic approach to address homelessness. The City has made significant investments of resources to increase access to and availability of shelter beds, services, outreach and permanent housing for those experiencing homelessness. Despite those investments, the crisis of unsheltered homelessness persists and continues to affect the entire community, including those experiencing homelessness, businesses, and neighborhoods.
File ID: 2025-01554 9/16/2025
According to the 2024 Point-in-Time (PIT) Count for the County of Sacramento, on a single night in January 2024, approximately 6,615 people were experiencing homelessness in the County.
Approximately 3,944 of those people were unsheltered. Within the City of Sacramento, approximately 3,053 people were experiencing unsheltered homelessness. This population includes veterans, women, children, persons with disabilities, seniors, and other vulnerable groups. People without shelter lack adequate sanitary facilities and are vulnerable to theft, crime, and extreme weather.
These conditions threaten the physical and mental health of those experiencing homelessness. They also present a threat to the public health and well-being of the community.
While the 2024 Point-in-Time Count indicated a 28.7% decrease in homelessness in the County of Sacramento since the 2022 Point-in-Time Count, thousands of people continue to experience homelessness on a nightly basis. The persistence of homelessness in our community can be attributed to the lasting impacts of the COVID-19 pandemic, struggles with disabilities and chronic health conditions, and the continued challenges with housing affordability. Housing prices and rental rates continue to increase based on the scarcity of available housing.
The City’s response to homelessness has grown and evolved over the past eight years. In 2020, the City began receiving State Homeless Housing, Assistance and Prevention Program (HHAP) funding, which has been used to significantly expand shelter-bed inventory. In August 2023, Council granted the City Manager authority to do all things necessary and convenient to establish new temporary shelter spaces, including but not limited to safe ground camping sites and motel rooms (Ordinance No. 2023-0015).
Because of these efforts, the City currently funds 18 shelter sites across Sacramento with 1,375 total bed capacity, and a current annual operating cost of $28 million. Notably, this does not include maintenance costs for existing shelter facilities, operating costs for new shelter program sites, or other homeless services contracts and expenses such as citywide cleanup, outreach services, Coordinated Access System support, and homeless mitigation efforts. DCR staff recently renegotiated the majority of the City’s shelter contracts to lower costs, and the savings are being used to pilot new programs or cover increased costs for other ancillary services such as citywide cleanup associated with homeless encampments.
The County of Sacramento funds and is in the process of launching new shelter programs that will bring their total bed capacity to approximately 1,500-plus. In total, there are approximately 3,380 emergency beds nightly County-wide, including those in privately funded programs. Despite the large number of shelter beds in the community, according to the Coordinated Access System (CAS), there are approximately 3,200 people and 700 families waiting for shelter space in Sacramento County.
As City staff look to continue operating homeless response programs with reduced funding from the State of California, the Department of Community Response (DCR) has been actively working to evaluate the effectiveness of its programs with a focus on bringing more people into shelter or
File ID: 2025-01554 9/16/2025
housing at lower costs. Staff have also been working to increase throughput at its shelters, despite the current lack of affordable housing, and develop other forms of more cost-effective and efficient housing for people on a fixed-income, particularly seniors.
On April 29, 2025, the City Council held the “Homelessness Workshop: Approval of Strategies Addressing Homelessness in the City of Sacramento,” in which the Council reviewed, commented and provided direction on new strategies presented by DCR for increasing the capacity of the City’s temporary shelter program. These new strategies included new safe parking and safe camping programs and ultra-affordable interim housing in micro-communities across the city. At the meeting, Council supported the notion that creating small communities with a sense of belonging in a price range that can be sustained on a fixed income would be impactful and accelerate opportunities for people to live in a safe and stable environment.
Following the workshop, City staff have been working urgently to implement Council’s direction by identifying and assessing properties across the city for new programs, drafting preliminary site layouts, developing program designs and procurement plans, and seeking approvals from partner organizations when required.
With support from City elected officials and the City Manager’s Office, DCR recently submitted a proposal to Sacramento Regional Transit (SacRT) to use a portion of the parking lot at the Franklin Light Rail Station (4625 Cosumnes River Blvd.) in District 8 as a safe parking site for approximately 60-80 vehicles. DCR presented the proposal to the SacRT Board on July 28, 2025, and will return to the Board this fall to present additional information, including a lease agreement drafted by SacRT and the City. In addition to approval from the SacRT Board, use of the lot for safe parking will require the approval of the Federal Transit Administration.
City staff have also identified and assessed four vacant City-owned parcels: one in District 4 to be used for safe camping and three in Districts 1, 5, and 8 to be used for micro-communities. A fourth micro-community site is currently being evaluated in District 7 but is not ready for inclusion in this report. The safe camping site will have space for up to 100 individuals. Each micro-community will contain approximately 40 tiny home units. The sites will include 24-hour security, communal gathering spaces, bathrooms and accommodation for pets.
The safe camping program will focus on people who are living in street encampments in the River District. The program’s goal is to transition people off the street and into a safe, organized environment where they can camp while engaging in services. The micro-community program will focus on identified populations, including seniors (people 55 years old and older) experiencing homelessness with few-to-no options for permanent housing.
DCR staff have hosted multiple listening sessions at City shelters to receive client input and feedback on the micro-community program and its potential amenities, services, rules, and requirements,
File ID: 2025-01554 9/16/2025
including a program fee. Staff are using this input and feedback to inform the program design. Staff are recommending that a program fee be instituted after an initial period of stay for participants who would like to remain in the program as an option for longer-term housing. The program fee would not exceed 30% of a client’s income, and the program fees would help support on-going operations for the micro-communities. Participants who opt to stay in the program as longer-term housing would be required to have an income to satisfy the monthly program fee.
City staff also identified two privately owned parcels - one in North Sacramento (District 2) and one in South Sacramento (District 5) - to be used as permanent supportive housing (PSH) communities.
Earlier this summer, staff submitted applications to the State’s Homekey+ Program to fund the communities. The parcel at 2809 Rio Linda Blvd. will contain 100 units of PSH, and the parcel at 4290 Mack Road will contain 120 units of PSH. The City expects to learn soon if its applications have been approved and will be funded by the State.
Furthermore, following the City Auditor’s recent performance audit of the City Motel Program -- a non- congregate shelter initiative serving families experiencing homelessness -- DCR has been advancing potential plans to transition the program to a voucher-based model to better support client choice, create additional cost savings, and assist in maintaining the program. Staff are recommending that families experiencing homelessness be issued a voucher for a four-week motel stay. Vouchers would be renewable for up to six months but would be contingent on program participants’ actively engaging with their case managers. Vouchers would be redeemable at participating motels across the city, which would be selected by a Request for Proposals (RFP) process.
Lastly, in partnership with the Department of Public Works, DCR is overseeing the expansion of the City’s Roseville Road shelter-and-service campus, where 135 new tiny homes for people experiencing homelessness are being constructed, essentially doubling the size of the campus.
Policy Considerations: These actions and strategies are consistent with the City’s Housing Element program H43, Housing for Extremely Low-Income Households, and H37, Surplus Public Lands. In addition, strategies to increase the availability of shelter and housing are consistent with the Sacramento Regionally Coordinated Homelessness Action Plan (RCHAP), adopted in March 2024.
These actions and strategies support the RCHAP’s Solution 4: Emergency Shelter and Interim Housing, which seeks to reduce the number of people experiencing homelessness (sheltered and unsheltered), and Solution 6: Permanent Supportive Housing, which seeks to expand housing opportunities and capacity dedicated to meet housing needs of people experiencing homelessness.
Staff will return to Council for final approval of the monthly program fee. The proposed fee will be developed to be consistent with Council’s adopted Citywide Fees and Charges Policy and Proposition 26 and will support the City’s budget sustainability and fiscal responsibility goals.
Economic Impacts: The City’s investment in micro-communities is estimated to infuse the economy
File ID: 2025-01554 9/16/2025
with jobs for the construction of the interim-housing units. The greater economic impact will be providing stable housing to an estimated 160 households, including those exiting homelessness or at risk of housing instability.
Environmental Considerations: This report concerns administrative activities that will not have a significant effect on the environment and would be exempt from the California Environmental Quality Act (CEQA Guidelines section 15061(b)(3)). Additionally, this report concerns general policy guidance, and the guidance does not constitute a “project” as defined by the California Environmental Quality Act (CEQA Guidelines sections 15061(b)(3) and 15378(b)(2)).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Increased shelter capacity and housing supply -- especially ultra- affordable housing -- will have the most direct impact on the reduction of both unsheltered and sheltered homelessness. The updates in this report reflect the ongoing implementation of strategies to reduce operating costs and accelerate the production of shelter inventory and ultra-affordable interim housing that can be stood up quickly.
Investment in this type of shelter and housing is necessary to reduce homelessness in the City of Sacramento. Staff’s recommendation that participants in the micro-community program pay a monthly program fee of no more than 30% of their monthly gross income is based on a recommendation from the U.S. Department of Housing and Urban Development (HUD). The 30%-of- income rule refers to the standard that housing costs, including utilities, should not exceed 30% of a household’s gross monthly income. The rule is a guideline used to determine if housing costs are affordable for low-income families and is applied in various HUD programs.
Financial Considerations: No new funds are being requested as part of this report. It is estimated that a monthly program fee for the micro-community program of no more than 30% of participants’ monthly gross income for 160 households would generate around $576,000 in annual revenue for the City. This revenue would be used to partially offset the on-going operating costs of the micro- communities, which are estimated to be around $2 million annually for the 160 households. In addition, the City Motel Program currently costs $7.8 million to operate annually, and staff anticipate a voucher-based model could create approximately $2 million in cost savings.
Local Business Enterprise (LBE): Not applicable.