Hennepin County will spend $3.5 million in federal COVID-19 relief aid to buy two properties for people experiencing homelessness: a 35-room motel in southwest Minneapolis and a 23-room former treatment facility just south of downtown.
The Board voted 6-0 on Tuesday to make the purchases with some of the $220 million the county received through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which must be spent by December 30. In doing so, the county aims to save money and capitalize on the temporary infusion of cash to make a long term investment in addressing homelessness.
“We are currently renting hotels, which is pretty expensive. We can house people similarly in these properties but with an eye toward transitioning these buildings to be permanent housing and then we also end up with an asset,” said Board Chair Marion Greene.
Since March, Hennepin County has been spending about $2.5 million per month to shelter about 500 people in hotel rooms. The county has focused its efforts on moving elderly people and people with pre-existing conditions out of the shelter system in order to limit the risk of a COVID-19 outbreak like those seen in shelters in Boston, Chicago and San Francisco.
The COVID-19 has increased demand for services from local governments at the same time it has caused revenues to decline, threatening county and city budgets on both sides of the ledger. Following civil unrest in the wake of the police killing of George Floyd, dozens of homeless encampments swelled across the city, increasing the urgency to address the worsening housing shortage in the Twin Cities.
The county has directed millions in coronavirus relief funding toward helping non-profit organizations expand their shelter operations and has directed $22.8 million toward rental and mortgage assistance to residents affected by the pandemic.
The county will spend $2.6 million on the 35-rooom Metro Inn at Lyndale Avenue and 57th Street and $900,000 on the 23-room dormitory-style building owned by the Volunteers of America at 2nd Avenue and 19th Street. The county will likely hire a management company to run the properties and the and coordinate with social workers to provide supportive services to people living there.
Greene said she hopes the county can buy more properties to turn into transitional housing with federal aid by the end of the year, but noted the short supply of suitable properties for sale.
When the pandemic ends, the county could continue using the properties to house homeless people or sell them to another organization to operate as transitional housing.