After two years of planning, and despite some lingering concerns, Palo Alto cemented on Monday, June 12, its commitment to building a three-story shelter for unhoused individuals near the Baylands when the City Council approved a nine-year lease with the nonprofit LifeMoves.

By a 6-1 vote, with Council member Greg Tanaka dissenting, the council voted to support the $1-per-year lease agreement and to commit $7 million in city funds for operations over seven years.

The future complex at 1237 San Antonio Road, east of U.S. Highway 101, will be located next to a future water purification plant and include 88 dwellings. Modeled after a similar LifeMoves project in Mountain View, the development will provide shelter and support services that aim at getting people into permanent housing.

The council took the final step in its negotiations despite some concerns about the project's growing costs, LifeMoves' questionable track record with its transitional housing in Mountain View, and a site that just about everyone admitted was less than ideal. Yet aside from Tanaka, the council members expressed confidence that the model that LifeMoves had developed over the course of the pandemic — a quickly constructed complex with social services — would only become more effective as the nonprofit and the cities it partners with gain more experience.

Council member Vicki Veenker spoke for the majority when she argued against letting "the perfect get in the way of the good."

"This is good for the clients who live there and have a better path to permanent housing," Veenker said. "This is good for the staff who can serve clients in a place where there's a panoply of services to support them. And this is good for our community — our community members who can volunteer and support this project instead of wondering, 'What can I do when we walk by an unhoused person in one of our parks or one of our streets?'"

Questioning a low success rate

But Tanaka noted that the nonprofit's track record for placing people in permanent housing has been far from "good." A March investigation by the Mountain View Voice, a sister news organization of the Weekly, found that its rate of placing people into permanent homes falls well below that of most comparable shelters, with just 26% of clients finding stable homes, according to Santa Clara County data. That was the second lowest percentage among the eight non-congregate shelters in the county's dataset.

"Would it not be better to focus more on permanent housing, which has a much higher success rate? Because we don't have this opportunity all the time. We owe it to the people in the streets to help them as best we possibly can," Tanaka said.

Aubrey Merriman, the nonprofit's CEO, pushed back against the article's reporting, which documented multiple failures by the agency to ensure safety and security in its Mountain View complex and which documented instances of mismanagement and sexual harassment at the transitional housing development on Leghorn Street. Merriman had declined to be interviewed for that story despite more than a dozen requests stretching over a three-month period.

"Were we thrilled about the article? No. Do we think the article captured all the facts and has the entire context for the complexity of this work? No," Merriman told the council. "Do we think the article would've had a different impact if it captured the fact that there was a 43% reduction in homelessness in Mountain View over the last two or three years? Maybe so. Do we think there's seeds planted in that article that we can use to grow and continuously improve? Absolutely!"

Merriman said the nonprofit, like many other Silicon Valley entities, is committed to "prototyping" and "iterating" as it expands its network of transitional housing complexes. This means applying the lessons it has learned from its first complex in Mountain View and applying them to its new shelters in San Jose, Redwood City and Palo Alto.

"When we bring on the new site in the middle of a pandemic, we knew there's going to be some learnings and we knew this is going to be the journey that we signed up for," Merriman said. "So we've taken the learnings from the Mountain View experience, we implemented the learnings in the Navigation Center (in Redwood City) and we're going to apply those learnings from the Navigation Center to what we're going to be doing in Palo Alto," he said.

Who's funding the $37.3 million project

Much like the other LifeMoves projects, the Palo Alto development will benefit from state funding through the Homekey program. Homekey has provided a $21.7 million grant for the project, which currently has a price tag of $37.3 million. The Sobrato Organization is donating $5 million for construction while the city, the county and LifeMoves are each chipping in $2 million.

The city was planning to reduce the cost of the project by about $2.5 million by cutting some of its features — including a photovoltaic system, electric vehicle chargers and decorative fencing. In recent weeks, however, the council has indicated that it plans to use a discretionary pot of money in the budget to restore some, if not all, of these elements. The council will determine which features to restore on June 19, as part of its adoption of the city budget for fiscal year 2024.

Despite some earlier reservations about the project's location in a relatively isolated section of the city with few transit options east of U.S. Highway 101, council members agreed that the project represents an important step in assisting some of Palo Alto's most vulnerable residents.

According to Consuela Hernandez, the county's director of supportive housing, the city had 158 homeless households who were assessed by the county between May 1, 2022, and April 30, 2023. These individuals, she said, had reached out to the county during this period to report that they are homeless, prompting the county to work with city staff and various service providers to convene an outreach strategy.

The county assesses the effectiveness of interim housing programs by seeing if they meet a 30% benchmark for participants moving on to permanent housing, she said. In county projects, the number is currently at about 78%, she said.

Council member Julie Lythcott-Haims, who had previously expressed concerns about placing some of the community's poorest individuals next to a water treatment plant at the southern edge of the city, threw her support behind the project on Monday. She called the location "subpar" and "completely isolated from other people," which makes it hard for residents to reintegrate into the community.

Nonetheless, she said, she is wholly in favor of the project and impressed by LifeMoves' commitment to the community and its "learn-as-you-go approach."

"I am confident we and they will learn from this project and process and deploy those learnings into the next project we build for extremely low- and very low-income people in Palo Alto," Lythcott-Haims said.