City Council
Report
City Council Meeting: July 28, 2026
Agenda Item: 11.B
1 of 15
To: Mayor and City Council
From: Aileen Reynolds, Director, Housing and Human Services Department Subject: Authorization to Enter into Certain Agreements and Provide Further Direction to Staff Related to a Housing Focused System of Care
Recommended Action
Staff recommends that the City Council consider and take the following actions:
1. Authorize the City Manager to negotiate and execute an agreement with the owner of The Palm Motel for the provision of rooms to operate interim stabilization housing for individuals and households who meet the Santa Monica Program Participant (SMPP) definition;
2. Authorize the City Manager to negotiate and execute an agreement with The People Concern for on-site operations and supportive services at The Palm Motel;
3. Authorize the City Manager to negotiate and execute an agreement with The Salvation Army to fund the activation of shelter beds and supportive services at the Bell Shelter;
4. Approve exceptions to competitive bidding ECB #496, #498498, and #500500 pursuant to Santa Monica Municipal Code Section 2.24.240(i), as further described in this report;
5. Direct staff to complete the Request for Expression of Interest (RFEI) process to identify additional non-congregate interim housing locations in and around Santa Monica, and transition away from SaMoShel’s congregate style sheltering facility concurrent with the RFEI process;
6. Adopt a finding of statutory exemption from the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.10(c);
7. Authorize budget amendment as outlined in the Financial Impacts and Budget Actions section. (Requires five votes)
Executive Summary
The homeless response system in Los Angeles County is undergoing its most significant restructuring in a generation. Over the past fifteen months, LA County has 2 of 15
voted to withdraw its funding from the Los Angeles Homeless Services Authority (LAHSA); established a new County Department of Homeless Services & Housing to take over that work; and approved deep funding reductions to regional homeless services in the face of a structural budget shortfall. Further, as of June 2026, the region’s homeless response system has had to absorb the federal government’s suspension of funding to LAHSA and the Los Angeles Continuum of Care. Against that backdrop, LA County has also been explicit that it is consolidating and redirecting its homeless response efforts.
For Santa Monica, the implication of these LA County / LAHSA related program changes is direct. If we simply maintain the status quo while the regional system is reordered and defunded, our local outcomes will suffer, both in how we support the unhoused population in our community, and in our efforts to reduce disorder in our neighborhoods and commercial districts.
The City is prepared for this moment. Through work undertaken over the past several years – including the 2022 Moss Adams assessment, the 2025 Homelessness Strategic Plan, and the Realignment Plan – we have identified the need to transition away from a crisis response model and towards a redesigned housing outcomes model.
Our current circumstances make the need to transition towards a new plan more urgent.
For more than three decades, the City’s only dedicated sheltering resource has been SaMoShel, a 60-bed congregate facility Downtown with no direct links to interim or permanent housing options. Today, any progress an individual makes through the rehousing system depends on the service provider navigating a fragmented system of facilities and waitlists controlled by a variety of jurisdictions.
Staff has synthesized and assessed the available options, and we are recommending that the City build a new local continuum, which we have called the Housing Focused System of Care. The proposed system creates an interconnected model, controlled by the City, through which individuals experiencing homelessness in Santa Monica can stabilize, heal, and ultimately achieve permanent self-sufficiency. 3 of 15
Realizing that model requires three linked housing typologies, including stabilization housing, interim housing, and permanent housing. Further, the proper support services will need to be built into each step, and the City will need to be able to control access into each type of housing, so that people can move through the overarching system effectively.
The system has also been intentionally designed so that accountability for results rests with the City. Per the proposed plan, Santa Monica would decide who is placed into the system and where, and Santa Monica would direct the support services, on-site security, and good neighbor commitments instituted at every location. Paired with our intervention and outreach teams and law enforcement efforts, the system is built to advance the Realignment Plan priorities of Achieving Safe Neighborhoods & Clean Streets; Activating Economic Opportunity & Growth; and Developing Affordable, Livable, & Secure Housing For All.
In late March 2026, as part of the Realignment Plan Update, the City Council directed staff to conduct comprehensive community engagement on the proposed system and to use that outreach to identify an implementation pathway. That engagement, which has included fourteen community meetings held between April and July 2026, is now complete, and staff is returning to Council with a proposed pathway comprised of three separate but coordinated actions:
• First, preserve The Palm Motel as interim stabilization housing. LA County is planning to defund the program currently operating at the site, and rather than lose that resource, staff proposes bringing the facility under City control as part of the Housing Focused System of Care, in order to serve Santa Monica Program Participants (SMPP) only, with the City (and not LA County) determining placements, services, security, and good neighbor policies. 4 of 15
• Second, invest in the regional response by funding The Salvation Army to activate currently unfunded shelter beds at the Bell Shelter. Homelessness is not confined to any single jurisdiction, and this investment would allow any jurisdiction in Los Angeles County that works with The Salvation Army to access the newly activated beds.
• Third, issue an RFEI to identify additional non-congregate interim housing options in and around Santa Monica. Those facilities, once identified, will replace SaMoShel’s congregate model, add capacity to our system, and complete the local continuum.
Ultimately, the Housing Focused System of Care seeks to pair local ownership of housing resources with investment into regional assets, in order to build the system Santa Monica needs while also supporting the regional response effort upon which every community ultimately depends.
Background
A Regional System in Transition
The development of a new local system of care responds in significant part to the ongoing restructuring of the regional homeless response system. In April 2025, the Los Angeles County Board of Supervisors voted to withdraw hundreds of millions of dollars in Measure A funding from LAHSA (the joint city-county authority that has coordinated regional homeless services for more than three decades), and to establish a new County Department of Homeless Services and Housing. However, in July 2025, facing a substantial budgetary shortfall, LA County approved nearly $200 million in reductions to homeless services, including cuts to outreach and navigation programs.
Compounding the situation, in June 2026, the U.S. Department of Housing and Urban Development announced the suspension of federal funding to LAHSA and the Los Angeles Continuum of Care, placing further strain on the regional system. 5 of 15
The practical effect of these shifts is being felt in local jurisdictions across the County.
There have been service level disruptions, uncertainty about which regional programs will continue, and a service delivery model deployed in local communities without local control over placements, standards, or operations. Programs that the City has depended upon, including the County’s Pathway Home interim housing program operating at The Palm Motel in Santa Monica, are set to end as County resources are redirected.
For Santa Monica, one of the key lessons that we have identified from this period of transition is that the City must own the system of care that operates within our borders.
Santa Monica’s Path to This Proposal
The plan before Council is rooted in analysis conducted over the past several years. In 2022, the City commissioned a homelessness study from Moss Adams, which evaluated Santa Monica’s homelessness intervention and prevention efforts. To implement the recommendations contained in that study, in 2023 Council authorized the development of a citywide homelessness strategic plan. The City partnered with BerryDunn to develop that plan in an effort to set clear policy direction, promote alignment across City stakeholders, and support regional efforts.
The Homelessness Strategic Plan (HSP) was developed and brought to Council, with the document ultimately being published in March 2025 (Attachment A).
More recently, in October 2025, the City adopted the Realignment Plan (Attachment B).
That plan identified the impacts of homelessness on Santa Monica and specifically called for implementing the HSP in a way that reimagined the City’s existing sheltering service delivery model. In place of SaMoShel, the Realignment Plan called for establishing a new system that prioritizes a healing center model, in which initial sheltering options are paired with addiction treatment and mental health services, and a direct link is created that allows those recovering from homelessness to move from sheltering into transitional and permanent housing options. 6 of 15
In late March 2026, staff returned to Council with an update on progress made on the Realignment Plan. The update included a staff recommendation regarding development of a Housing Focused System of Care, in order to implement the new interconnected healing center model. Per that update, the City Council directed that staff coordinate a comprehensive community engagement process, and to use that outreach to identify an implementation pathway before finalizing any agreements or operational changes to the City’s existing homeless response operating model. That outreach effort began in April 2026 and continued through early July 2026. This report presents the results of that engagement and the implementation pathway staff recommends.
Discussion
Why Santa Monica Needs a Local Continuum
The City’s current model, while having served the community ably for many years, provides the City with access to shelter capacity only at SaMoShel, without direct links to any City-controlled interim housing pathways. When an individual is ready to take the next step out of a shelter bed, the City today has no interim housing facility of its own to move them into. Any progress through the system depends on facilities and waitlists the City does not control. Permanent housing exits are reliant on competition across service providers and regional resources. While the City has prioritized SMPP placements into permanent supportive housing within the City, there is no streamlined pathway to ensure shelter residents have direct access to these resources.
Further, SaMoShel’s congregate setting, in which individuals sleep in an assigned area of a large room with many other people, is not an ideal model if the goal is to create pathways toward permanent stabilization. Conditions in and around SaMoShel have also materially shifted since the model was established, including Metro end-of-line proximity effects, increased behavioral health acuity among the population being served, and increased calls for service and public disorder concentrated in the City’s primary Downtown commercial core.
7 of 15
Staff also researched best practices in emergency sheltering to ensure this proposal improves on the current system. First observed during the COVID-19 pandemic, when congregate shelters became a public health concern,1 alternative sheltering models have become more prevalent. Research shows that sheltering options providing private living spaces that support the autonomy and safety of individuals can lead to better outcomes.2 For these reasons, the system proposed shifts the City away from the congregate model and toward non-congregate settings at every step of the continuum.
What the Data Shows
Staff considered both the need to offer resources for households with connections to Santa Monica and the need to contribute to a regional solution for individuals experiencing homelessness in Los Angeles County who find themselves in the City.
The most recent Point-in-Time count, in 2025, identified 812 individuals experiencing homelessness in Santa Monica.3 Understanding the limitations of the point-in-time methodology, which isolates the census to a single night each year and does not collect demographic information from the individuals counted, staff also compared this information to the census at SaMoShel. Based on current census counts, of the 60 beds at SaMoShel, only about 10% are occupied by individuals who meet the Santa Monica Program Participant (SMPP) definition.4
Those figures point to a need to develop a two-part strategy, which includes 1) investing in a local system of care that serves households meeting the SMPP definition, while 2) contributing to the regional intervention system that serves everyone else.
The Housing Focused System of Care
1 From Shelters to Hotels: An Enduring Solution to Ending Homelessness for Thousands of Americans | Psychiatric Services (https://psychiatryonline.org/doi/full/10.1176/appi.ps.202100170) 2 Alternative Shelter Evaluation Report, Portland State University Homelessness Research & Action Collaborative (https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=1045&context=hrac_pub) 3 santamonica.gov – Point-in-Time Count data for Santa Monica shows more unhoused people moving indoors (https://www.santamonica.gov/press/2025/07/23/point-in-time-count-data-for-santa-monica-shows-more-unhoused-peoplemoving-indoors) 4 SMPP: someone who became homeless in the City (evidenced by proof of last permanent address), has been homeless in the City for 3 or more years, or is a frequent user of Santa Monica services as verified by City staff. 8 of 15
The strategy embedded in the proposed Housing Focused System of Care involves building out an interconnected local continuum with three linked types of housing, each paired with the support services appropriate to that stage. Those types of housing include:
• Stabilization Housing – the entry point to the system, where individuals referred by the City’s first responder and outreach teams come indoors into a noncongregate setting. During this process, referred individuals would complete intake, develop a care plan, and begin to stabilize with access to food, health services, behavioral health care, and addiction treatment resources. • Interim Housing – this next step involves building out non-congregate, stepdown settings where individuals continue healing, build stability, and work with on-site case management toward a permanent housing plan. • Permanent housing – this constitutes the final destination of the system, where durable exits from homelessness end up reducing long-term shelter demand and break the cycle of individuals returning to the streets.
A key feature that allows this model to work is City control at each step of the system.
Because the City would hold the contracts and direct access to every facility in the continuum, individuals can move through the system as they progress rather than stalling at any one stage. And because Los Angeles County would no longer be in charge of the system locally, accountability consolidates with the City, as Santa Monica would decide who is placed into the system and where. The City would also set the standards for support services, and direct the on-site security and good neighbor policies to be implemented at every location. Of note, every agreement recommended in this report is structured to carry those requirements.
What We Heard from the Community
9 of 15
Staff conducted a series of 14 presentations to community stakeholder groups on the proposed Housing Focused System of Care between April and July 2026, to ensure transparency and provide the opportunity to answer questions and hear concerns.
From those meetings, staff generally heard support for the City pursuing new solutions to address unsheltered homelessness in Santa Monica. Community concerns centered on the safety and security of any proposed location; a desire to better understand how the City will measure success in these programs; and ensuring that facilities would not be concentrated in any one part of the City.
In response, staff has developed the Housing Focused System of Care to ensure that on-site security and good neighbor policies are included in all service contracts. Staff is also committed to ensuring that performance measures and public reporting will be integrated into the system if Council directs that the proposed continuum be established. Further, a proposed Request for Interest / Request for Proposal process that is being engaged to identify additional facilities will include assessments to ensure that we do not overconcentrate services in any one particular neighborhood within Santa Monica.
The Implementation Pathway
The Realignment Plan Update directed staff to use community outreach to identify an implementation pathway for the new system. That outreach is complete, and staff recommends beginning the buildout of the local continuum with three coordinated actions.
Step One: Preserve The Palm Motel Under City Control
The Palm Motel has operated an interim housing program funded by LA County and operated by The People Concern for the past two years. That program is ending this summer as the County redirects its resources, and upon its closure, The Palm Motel’s future use would be uncertain.
Rather than allow an operating interim housing resource in Santa Monica to be lost, staff recommends the City step in and assume responsibility for the facility, and to add 10 of 15
the facility into the City’s overarching Housing Focused System of Care. The City would enter into two agreements if it is determined that The Palm Motel should come under City control. First, we would look to enter into an agreement with the property owner to secure site control. In addition, a contract with The People Concern is proposed for that entity to serve as the service provider for wrap-around, on-site services. The Palm has 34 rooms and can accommodate up to 48 occupants, with variation depending on whether individuals can safely share rooms.
Under City direction, the site would operate differently than it has under the County model in the ways the community has asked about most. Placements would be limited to individuals and households who meet the SMPP definition, referred exclusively by the City’s first responder and outreach teams. In that way, the City, not LA County, would decide who is placed at the site.
In addition, upon referral, the on-site service provider would conduct intake and create a care plan to help the individual or household stabilize, connect to necessary resources such as food and health services, and ultimately develop a housing plan that guides them to a housing resource beyond interim stabilization placement. The City would direct the support services and on-site security at the facility, and good neighbor policies would be written into both agreements.
It also is important to emphasize that this action, if taken, would serve to preserve an existing resource already operating in Santa Monica. It would not create a new facility, it does not expand the site’s use, and The Palm Motel would not serve as a replacement for SaMoShel.
Step Two: Support the Regional Response – The Salvation Army Bell Shelter.
Homelessness moves across city boundaries, and no local system succeeds if the regional system around it collapses. At a moment when LA County and LAHSA resources are contracting, staff has identified a way for Santa Monica to strengthen the regional response rather than step back from it. The Salvation Army’s Bell Shelter, an established emergency and interim housing operation in the City of Bell, currently has 11 of 15
the physical capacity to serve more participants, but lacks the funding to activate those beds.
Staff recommends that the City fund such an activation. Because the enhanced capacity would be available to any jurisdiction in Los Angeles County, this investment directly supports the regional service model, with ancillary benefits for Santa Monica and the Westside as regional capacity comes online. The partnership also provides the City’s first responder and outreach teams with a resourced referral option for individuals they encounter who do not meet the SMPP definition, ensuring the City can continue addressing the impacts of unsheltered homelessness for everyone in our community while investing locally in the SMPP population.
Step Three: Build Out the Local Continuum by Issuing an RFEI for NonCongregate Facilities in our Region.
To complete the local continuum, and to replace the sheltering capacity now provided by SaMoShel’s congregate model, staff will issue an RFEI an RFEIinviting property owners of motels, hotels, residential facilities, and similar non-congregate housing options in and around Santa Monica to offer locations for the City’s inventory of housing-focused facilities.
Interim housing of this kind is temporary housing that bridges people experiencing homelessness from the street into permanent housing, typically in private or noncongregate settings paired with on-site supportive services. The City originally explored partnering with The Manor, a state-licensed adult residential facility on Pico Boulevard, but has halted those plans in favor of this competitive process, due in part to how negotiations with the property owner have evolved.
Of note, the facilities identified through the RFEI will not be congregate in nature.
Further, once new facilities are identified and operational, they will be used to replace SaMoShel, and the City’s transition away from the congregate model will be sequenced so that shelter capacity is maintained throughout. The City will subsequently release a Request for Qualifications (RFQ) to build a bench of service providers who can be 12 of 15
paired with these new facilities to ensure proper services are offered for stabilization and support. Staff will return to Council with specific recommendations as the RFEI / RFQ process unfolds.
Permanent Housing: The System’s Destination
The system of care described above addresses how the City delivers homeless services. But shelter and interim housing alone do not end homelessness, as permanent housing is ultimately what provides durable exits, reduces long-term shelter demand, and breaks the cycle of individuals returning to the streets. As described in the March 24, 2026 staff report on the Realignment Plan Update, staff continues to explore additional pathways to create permanent, affordable housing in Santa Monica, so that the continuum proposed here connects to the housing outcomes it is designed to produce.
Vendor Selection
Exception to Competitive Bidding
Staff recommends The Palm Motel to provide interim stabilization housing, The People Concern to provide operations and support services, and The Salvation Army to provide shelter for non-SMPP individuals, per ECBs #496, #498, and #500, as exceptions to competitive bidding pursuant to the City’s Procurement Policy.498, and #500, as exceptions to competitive bidding pursuant to the City’s Procurement Policy.
Past Council Actions
Meeting Date Description
03/11/2025
(Attachment A)
Staff Report on: Receive Homelessness Strategic Plan and Renters’ Protections Program, Approval of Human Services Division Reorganization Plan and Adoption of Classification and Salary Resolution
10/28/2025
(Attachment B)
Staff Report on: Santa Monica Realignment Plan
03/24/2026 Staff Report on: Santa Monica Realignment Plan Update 13 of 15
Environmental Review
The proposed agreements are statutorily exempt from CEQA pursuant to Section 21080.10(c) of the Public Resources Code, which states that CEQA does not apply to “actions taken by a local agency to approve a contract for providing services for people experience homelessness”. The agreements would provide interim housing and supportive services to persons experiencing homelessness and would not result in adverse physical environmental impacts. Therefore, the agreements are exempt from CEQA and no further environmental review is required.
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from the General Fund, Miscellaneous Grants Fund, and Special Revenue Source Fund to execute agreements with The Palm Motel, The People Concern, and Salvation Army. General Funds and Miscellaneous Grant Funds for the first year are available in the FY 2026-27 HHS budget. To provide the remainder, staff recommends that Council appropriate funds from the Providence Saint John’s Development Agreement (PSJ-DA) fund balance account 10.366634 to existing expenditure account 10420001.556100.
FY 2026-27 Budget Amendment
Release Funds Appropriate Funds
Account # Amount Account # Amount
10.366634 $3,458,150 10420001.556100 $3,458,150
TOTAL $3,458,150 $3,458,150
Agreement Request
Agreement Funding
Source Department Account #
FY 2026-27
Request
Amount
(Sept 1
Start)
Future Year
Modified
Request
Amount
Total
Agreement
Amount
The Palm
Motel
General
Fund 01420006.556000.91932 - $554,423 $2,236,000
14 of 15
General
Fund 01420007.552010 - $14,089
General
Fund 01420007.552016 $500,000 $500,000
Misc
Grant
Fund
20420001.556750 $306,523 $167,488
Special
Revenue
Source
Fund
10.366634/10420001.5561
00 $193,477 -
The People
Concern
General
Fund 01420006.556000.91932 - $758,048
$2,905,803
General
Fund 01420007.556000.98984 - $600,000
Special
Revenue
Source
Fund
10.366634/
10420001.556100 $1,299,554 $248,201
Salvation
Army
(Bell
Shelter)
Special
Revenue
Source
Fund
10.366634/
10420001.556100 $1,965,119 $2,428,887 $4,394,006
TOTAL $4,264,673 $5,271,136 $9,535,809
Budget authority for subsequent budget years will be requested in each budget for Council approval. While General Fund amounts identified above provide an ongoing source of annual funding, other sources must be identified to bridge the gap beginning in Year 3, once PSJ-DA funds are fully expended. Staff has submitted a $5M+ grant application to the California Housing & Community Development Encampment Resolution Program (ERF) that could provide a portion of future funding. Other alternative funding sources currently under consideration include Measure GS and Measure GSH. Future year funding is contingent on Council budget approval. 15 of 15
Prepared By: Aileen Reynolds, Director
Approved Forwarded to Council
Attachments:
A. Attachment A: Homelessness Strategic Plan (March 11, 2025 Staff Report) - Web Link
B. Attachment B: Santa Monica Realignment Plan (October 28, 2025 Staff Report) - Web Link
C. Attachment C: OAKS Initiative - Palm Motel
D. Attachment D: Levine Act - Palm Motel
E. Attachment E: Levine Act - The People Concern
F. Attachment F: Levine Act - Salvation Army
G. Written comments
H. PowerPoint Presentation