SLO County supervisors authorize state grant for homeless housing


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San Luis Obispo County now has a blueprint for how to spend a $13.4 million state grant it received to alleviate homelessness.

Twenty-two California communities became recipients of the $199 million Encampment Resolution Fund on June 14. SLO County's award was the third largest allocation given to a county, after Los Angeles and San Diego counties, underscoring its position as having the third largest percentage of unsheltered residents nationwide compared to other communities of its size.

The $13.4 million fund will finance the Welcome Home Village shelter project on county-provided land in the form of a gravel lot behind the Department of Social Services headquarters on Higuera Street in SLO. The shelter space will include 80 beds using modules from a company called LifeArk that builds sustainable and affordable homes for low-income and marginalized communities. The proposed village will rotate roughly 200 people living in encampments along the Bob Jones Trail once it starts accepting participants next March, aiming to eventually move them into permanent housing.

However, the grant comes with a risk: time.

It's supposed to expire in three years, leaving SLO County to identify other funding streams if it wishes to sustain the Welcome Home Village from fiscal year 2027-28 and beyond. Homeless Services Division Manager Joe Dzvonik told the Board of Supervisors on July 11 that projected annual ongoing costs from that fiscal year onward are expected to be almost $2 million, which includes the bills for operational costs, encampment cleanup, outreach services, and administrative costs.

"An important part of my job is to make sure we don't overcommit ourselves to future projects only to have them disassembled as quickly as we build them due to a lack of funding and support," he said at the meeting.

Dzvonik has fledgling plans for risk mitigation. He suggested building a budget at the county level to stem costs later when the $13.4 million budget is used up. His plans deal with balancing the investment with expanding street outreach and prevention efforts to slowly draw down the rate of homelessness. Next month, Dzvonik will present funding strategies to the supervisors for a homeless management information system overhaul.

"This is required to properly monitor the effectiveness of projects such as this and use this improved clarity regarding the posture of homelessness overall to better focus our operations, more clearly articulate our needs, so we can receive even more grant money like the $13.4 million we're discussing today," he said.

But 5th District Supervisor Debbie Arnold remained concerned and wanted staff to identify concrete sources of future funds.

"I would like to hear a better idea. Help me with where else we can go, maybe even bake it into the cake," she said. "If there are no grants and all of a sudden we're in 2026 with a deficit budget, ... do you have monies we can say for certain this is where we can go [when grant expires]?"

Department of Social Services Director Devin Drake stepped in to clarify that the future of such projects has always been opaque given the state's funding scheme. He added that he's discussed the potential of adding a line item in the state budget for solving homelessness with 2nd District Supervisor Bruce Gibson through the latter's involvement with the California State Association of Counties.

"This is a constant that we work with under homelessness," Drake said. "It's always grant-based."

The Board of Supervisors ultimately authorized the allocation agreement in a 5-0 vote on July 11, green-lighting the process of transitioning homeless residents out of one of the largest encampments in SLO County. Δ


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