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SAN DIEGO (CNS) – Gov. Gavin Newsom announced Monday the state will send $37.7 million to support San Diego’s proposed purchase of two hotels to provide more than 330 rental housing units for San Diegans experiencing homelessness.

The funds — part of the state’s Project Homekey — will go toward the purchase of the Residence Inn Hotel Circle and Residence Inn Kearny Mesa, to be considered by the San Diego City Council in October.

The purchase of the two properties would create 332 permanent supportive housing units, with 72 of the units having two bedrooms, enough to provide housing for more than 400 individuals. According to a city statement, the units were determined to require minimal work before people could move in. The Hotel Circle property was built in 2003, while the Kearny Mesa property was built in 1990 and underwent a renovation in 2013.

“San Diego has proven we can put state dollars to action on programs and services that reduce homelessness,” said Mayor Kevin Faulconer. “We have the real opportunity to house hundreds of individuals with these two hotels, and the Project Homekey grants will go a long way toward achieving that.”

Through the Project Homekey program, the state is making $600 million in grant funding available to local public entities in California, including cities, counties or housing authorities. The grant funds may be used to purchase and rehabilitate housing, including hotels, motels, vacant apartment buildings, and other buildings, and convert them into interim or permanent, long-term housing.

Residents of the two San Diego properties would include individuals currently staying at Operation Shelter to Home at the San Diego Convention Center — which opened April 1 as a temporary shelter during the COVID-19 pandemic and serves about 1,100 people per day.

“The lack of housing options for our unsheltered residents is a humanitarian crisis, and confronting it is a top priority,” said City Council President Georgette Gomez. “The clear solution is more homes, and so the announcement that the city of San Diego will receive substantial funding from Project Homekey to create new apartments with supportive services for some of our most vulnerable unhoused neighbors is very exciting news.”

The state awarded the funds based on applications the San Diego Housing Commission submitted.

“Securing two hotels, and bringing online over 330 permanent supportive housing units, is another example of our region implementing recognized best practices to protect the most vulnerable among us during COVID- 19,” said City Councilman Chris Ward, who also serves as Chair of the Regional Task Force on the Homeless.

The housing commission board voted 6-0 on Friday to recommend that the city council, in its role as the Housing Authority of the City of San Diego, authorize the purchase of Residence Inn Hotel Circle and Residence Inn Kearny Mesa.

The County of San Diego Board of Supervisors voted unanimously Aug. 25 to approve Supervisor Nathan Fletcher’s request to authorize $5.4 million to fund essential supportive services for the individuals who would reside at the properties.

One of the main objectives of Operation Shelter to Home is to streamline how people experiencing homelessness access housing resources and move them quickly into permanent housing. So far, the project has helped more than 600 people secure housing.

According to San Diego’s Community Action Plan on Homelessness — which the City Council adopted in October 2019 — the city has a critical need to increase permanent supportive housing by 2,659 units for individuals experiencing homelessness within a decade, with 60% of those units, or 1,595, to be developed within the first four years.