Father Joe’s Villages, operator of a 30-year-old downtown campus for the homeless, will announce a $531 million, five-year plan Thursday to produce 2,000 permanent housing units and reduce, if not eliminate, homeless encampments on the street.

“At the end of the day if we don’t have (permanent) housing, individuals can’t stay in the shelters forever and will be back on the street,” said Deacon Jim Vargas, president and CEO of Father Joe’s Villages.

Father Joe Carroll is the organization’s president emeritus who developed the idea of a “continuum of care” and opened the first unit of the East Village complex, Joan Kroc Center, in 1987.

It’s the biggest single effort the charity has ever launched and perhaps the largest attempted by any homeless provider in county history.


Working with Chelsea Investment, a Carlsbad-based specialist in low- and moderate-income housing, Father Joe’s said it has developed a financial plan to make all this happen.

Through various government and low-cost financing programs, $409 million would come from tax credits, the city’s affordable housing trust fund managed by its housing commission, CivicSan Diego’s various housing programs and any available state and federal grants.

The remaining $122 million would come from individual donors, corporations, foundations and other private sources.

But raising $100 million a year could be difficult, given the number of grants available, competition among homeless services providers and changing budget priorities at the state and national level. The San Diego Housing Commission, for example, is allocating about $20 million this year to support new housing ventures and Father Joe’s is only one of many service providers vying for the funds.


A proposed 418-unit permanent housing project for the homeless would be built at 14th and Commercial streets in East Village.

The plan, “Turning the Key, Unlocking a Brighter San Diego,” would call for:

760 new permanent housing units for adults and families at St. Vincent de Paul Village and the Toussaint Academy site at Fifth Avenue and Ash Street for families and youth aging out of foster care; design and permit processing is under way with construction beginning on one or more of the buildings by the end of next year.

1,240 permanent units at about 17 hotels and motels with an average of 75 units each throughout the county, starting with two acquired this year and opening after rehabilitation in the first half of 2018.

Vargas said the effort was prompted by the realization that homeless shelters and temporary housing efforts have succeeded in taking many people off the streets.

But with San Diego’s housing market so tight and rents so high, there is a minimal amount of permanent, affordable housing available. That leaves the homeless left to hunt for a limited number of bunk beds, cots and floor space in shelters and temporary housing. Roughly 5,000 other individuals find themselves outdoors because there’s no room at the inn.


Vargas likened the situation to a funnel with lots of people entering the system at the wide end and few coming out of the narrow end. Those who can’t make it into the “funnel,” are left to fend for themselves. And as rents rise, more and more families and individuals double up with friends and relatives, sleep in their cars or find someplace out in the open.

Ideally, there would be enough temporarily housed people moving into the 2,000 new permanent units that the freed-up shelter beds could serve more of the people living in tents, doorways, river beds, canyons and parks.

“At the point where it’s up and running, this will be the mechanism that will be in place to do just that and cycle people through,” Vargas said.

If other charities take the same approach, along with building new shelter capacity — and market-rate developers do their part to boost construction of more apartments, houses and condos — the hope is the homeless crisis will be lessened to a manageable problem, if not eliminated. Vargas said he has mentioned his strategy in general terms to other providers but is providing the details for the first time this week.


For now, San Diego County ranks fourth nationally with the largest metro homeless population at 8,742 in 2015, up from 8,506 in 2014, federal figures show. The first-place New York metropolitan area had 75,323, followed by Los Angeles with 41,174 and Seattle with 10,122. San Francisco ranked ninth with 6,775.

Building new projects typically requires a bundle of funding sources but identifying, buying and rehabbing motels might prove problematic.

Voit Real Estate Services broker Kipp Gstettenbauer said Vargas might have a problem buying up motels because few are for sale at any given time and many other investors are trolling for the same thing.

“I would be surprised if they can get their hands on any project,” he said. “The upside for sellers would be to do it out of the kindness of their heart” or Father Joe’s would offer a higher, competitive price.


The typical motel property with 16 to 20 rooms now goes for up to $250,000 per door, Gstettenbauer said.

Investors typically fix up rundown properties, rebrand them as “boutique” hotels and save the cost of franchising through a national chain. As an example, he cited the historic Dolphin Hotel in Oceanside that closed after a fire in 2015 and now is being restored as a 28-unit boutique property.

“Is Father Joe’s in a better position to buy a rundown motel? Not really,” he said.

However, Rick Gentry, president and CEO of the San Diego Housing Commission, said such purchases have succeeded, including one approved by his board last month for a former Motel 8 in Grantville that was acquired by Affirmed Housing, an affordable-housing developer.


“If Dean Vargas and St. Vincent’s can replicate that even in a few cases, I think it’s a worthwhile thing to do,” Gentry said.

Vargas said with most hotels and motels are not marketed publicly for sale. Seventy-seven poorly performing and maintained properties have been identified in the region that might be candidates for purchase offers from Father Joe’s.

“They might have flirted with putting them on the market and selling and haven’t yet,” he said.

As for the total plan, Gentry applauded the concept but expects competition will be keen between Father Joe’s and other developers for the same, few pots of money.


“The issue is how long will our money hold out,” Gentry said.

Although total funding from the U.S. Department of Housing and Urban Development is proposed to be cut by the Trump administration, Gentry expressed confidence that Congress will pass a budget that leaves the city with housing vouchers close to the present total of more than 15,000; it lost 723 vouchers when budget rules mandated across-the-board cuts four years ago. The agency has set aside 2,000 of current vouchers for housing for the homeless as well as 733 for the county’s mental health program participants who live in the city. But there are still 75,000 applicants on the waiting list.

The creation of new affordable housing units, both newly built and remarketed, is necessary, along with more shelter slots, Gentry said.

“You’ve got to have both,” he said. “I don’t think there’s a silver bullet, one magic solution, here. It’s going to take several years of diligent application of a balanced approach with more resources.”


Steve Russell, executive director of the San Diego Housing Federation, which represents affordable-housing builders and others in the industry, called St. Vincent’s program “audacious.”

“Bravo to them for being bold,” he said. “Let’s not just take tiny nibbles at this problem but try to get to the heart of it.”

Father Joe’s Villages plan at a glance

New construction:

Penske site: 14th and Commercial streets ; 15 stories, 418 units for veterans, families and chronic homeless persons; $112 million in public funds, $33 million private, $145 million total. Highlights: day center, medical clinic expansion, dining expansion and a multipurpose room.

14th and Commercial streets 15 stories, 418 units for veterans, families and chronic homeless persons; $112 million in public funds, $33 million private, $145 million total. Highlights: day center, medical clinic expansion, dining expansion and a multipurpose room. 1 7th & Commercial site: 6 stories, 125 units for seniors and veterans; $33 million in public funds, $14 million private, $47 million total.

6 stories, 125 units for seniors and veterans; $33 million in public funds, $14 million private, $47 million total. Toussaint building: Fifth Avenue and Ash Street: 20 stories, 175 units for families and youth transitioning out of foster homes; $51 million in public funds, $21 million private, $62 million total.

Motel rehabilitation:


17 properties throughout the county: 75 rooms each; average cost, $16.7 million — $13.5 million from public sources and $3.2 million from private donors. If smaller motels are purchased, more would be sought.

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roger.showley@sduniontribune.com; (619) 293-1286; Twitter: @rogershowley