Home>Articles>California’s Homeless Hustle is a House of Cards

Sacramento homeless camp. (Photo: Katy Grimes for California Globe)

California’s Homeless Hustle is a House of Cards

DOJ lawsuit over Project Roomkey motels in South Lake Tahoe

By Katy Grimes, December 13, 2022 2:45 am

It is evident now that California’s homeless solutions and the billion$ in funding are just one giant hustle – and maybe even a house of cards.

Gov. Gavin Newsom’s Encampment Resolution Fund grant program, a $700 million two-year program to close down homeless encampments and get people into housing and shelter is handing out another $240 million, the Globe recently reported.

But at what real cost, and does any of this really work at permanently getting homeless off of the streets?

What is going on in beautiful South Lake Tahoe is a case in point. The California Department of Justice is suing the Tahoe Coalition for the Homeless for breach of contract and mismanaging funds – $8.5 million.

Director of the Tahoe Coalition for the Homeless, Cheyenne Purrington, jumped ship in September, and moved to Oregon, Colleen Hearn with Concerned Citizens of Cameron Park,  and Tamara Wallace, former South Lake Tahoe Mayor told the Globe. Wallace is still a council member on the South Lake Tahoe City Council.

And as with nearly all of the homeless funds distributed in the state, people want to know where the money has gone given that the state only has more homeless after spending billions of taxpayer dollars.Hearn said that her community group, Concerned Citizens of Cameron Park, has consistently opposed Project Homekey and Project Roomkey expanding in El Dorado County, preferring continuing their own local charity and help to those who need it.

Project Roomkey is a hotel service for homeless vagrants, costs more than $250 per night in many California cities. Even Motel 6 in San Francisco advertises $100 per night rooms.

Project Homekey provided local governments about $2.8 billion total to sustain 12,676 housing units across the state,” ABC 10 reported. Homekey is more of a low-income housing program.

“We knew it was failing in South Lake Tahoe and that their Executive Director for Tahoe Homeless Coalition, Cheyenne Purrington was failing the community,” Hearn said. “Luckily our efforts succeeded in blocking the expansion. Two County Supervisors – Supervisor Hidahl and Supervisor Thomas – were staunch advocates for Homekey but are silent now. However, El Dorado County is continuing to use the the Tahoe Coalition for ALL coordinated entries for the homeless in spite of warnings and outcry from the public and the threatened lawsuit.”

Hearn said the County Board just voted to accept the latest “blackmail” from the Governor that he would cease funding for the proposed homeless navigation center if they did not follow the “Homeless Housing, Assistance, and Prevention Program,” a $2 billion program funded over the next two years for local governments to combat homelessness. The guidelines require prioritizing very low income housing under the “housing first” directive.

“We are barreling down the road for a homeless navigation center with no infrastructure in place – no credible coordinated entry and no guarantee of funding,” Hearn said. “The Board refuses to listen to the experts on homelessness in our county who state we don’t have a crisis.”

Hearn says her community of Cameron Park has been targeted for Project Roomkey hotels for homeless. But, community members noticed some of the “homeless” in the shelters  were covered with prison tattoos, and coincidentally elderly people were getting robbed in the nearby Safeway parking lot. She said it was obvious the state was releasing felons into the hotels. Her local group worked with the El Dorado County Sheriff’s department which placed a substation nearby to curtail the crime.

Hearn said these hotel and low-income housing plans were being done with no mitigation plan in place for the safety and security of the residents.

The former Mayor of South Lake Tahoe Tamara Wallace said she was Mayor in 2021 when the homeless funds were made available. But the hitch was that the Tahoe Homeless Coalition needed a partnering agency to apply for the grant funds – and the agency needed to agree to a 55 year deed. “South Lake Tahoe said ‘no’ – the grant came only with two years of funding and we were’t going to put our taxpayers on the hook for 53 additional years,” Wallace said.

So the Tahoe Homeless Coalition went to the Tahoe Regional Planning Agency (TRPA is funded by the state), which agreed. The next thing they knew “Governor Newsom was in Tahoe doing a press event at the Bears Den Project Homekey property, announcing ‘We’re giving South Lake Tahoe $10 million to end homelessness,'” Wallace said. However, right after the event, Wallace said the TRPA realized they would be responsible for the 55 year deed restrictions with only two years of funding, and backed out.

“But no one wanted Gov. Newsom to lose face, so the California Department of Housing and Community Development (HCD) went back to South Lake Tahoe, and blackmailed us,” Wallace said. “They said we haven’t been meeting our regional housing needs assessment numbers.” Since 1969, California has required that all local governments (cities and counties) adequately plan to meet the housing needs of everyone in the community. Wallace said that was ironic, and told them that was because of the TRPA, which controls housing growth (or lack thereof). “We told them ‘sue us.'”

Instead the Housing and Community Development went back to the TRPA with a sweetheart deal – they could keep the Project Homekey grant without the usual 55 year deed agreement. Wallace said it is the only sweetheart deal of its kind in the state, and only because the governor got ahead of himself, and no one wanted him to lose face.

With the grant funds, the Tahoe Coalition for the Homeless, led by Executive Director Cheyenne Purrington, purchased three South Lake Tahoe motels -Bear’s Den, Red Lodge and El Nido Motel – to convert into long-term housing through the Project Homekey grant.

Mayor Wallace said she has been working a long time with the homeless and homeless youth through her church in South Lake Tahoe, and knows what really works and helps long term. She said Tahoe Coalition for the Homeless Executive Director Cheyenne Purrington displayed signs of trouble from the moment she was hired. “The homeless in our town were better served before the three Project Homekey properties,” Wallace said. “It was a more cohesive effort.”

She said the Tahoe Coalition for the Homeless “way overpaid for the properties.” The grant requirement was the purchase of a property, the rehabilitation of it, and two years of operating cash, Wallace explained. “One property was not even used for 16 months of the two year commitment, and 6 months in they couldn’t pay the bills for the required SRO inspection fees.”

Wallace said the third property needed the most rehabilitation, but had a restaurant on the property, and they were collecting rent from it. There was also a two bedroom apartment on the property which could have housed a homeless family, but the Executive Director Cheyenne Purrington was living in it. Wallace said while it might not have been illegal, it was morally and ethically wrong.

Two of the properties were occupied when they were purchased. One was less expensive housing for Tahoe workers in the lower-paid service industries. The other was owned by Heavenly Ski Resort and used as affordable housing for seasonal workers. They were all kicked out ahead of the renovations and the units were eventually given to homeless. Wallace said because the rents are so high in South Lake Tahoe, most of the workers had to move down from the hill to seek employment and housing elsewhere.

Wallace also said that part of the grant requirement is for the Tahoe Coalition for the Homeless to keep a warm room opened and available for the homeless to use to take a shower, do some laundry and use the phones. “The warm room was pristine,” Wallace said, “because they don’t allow anyone to use it.”

The very purpose of the homeless grants was to serve the homeless, and the Tahoe Coalition for the Homeless director wouldn’t allow homeless to use the facility.

Wallace said she was in a police officers’ office one day at the South Lake Tahoe police station when he got a call from the homeless coalition claiming a homeless man trying to seek services in the warm room was “trespassing.” When the officer asked what the problem was, the reply was “He’s breathing.” Wallace said they claimed he didn’t have an appointment (he said he did), and added, “We don’t want him here. He’s breathing.”

Notably, Wallace said an appointment to use the warm room had to be made over the phone, which meant most likely from the library across town. The homeless weren’t allowed to show up without an appointment.

It became apparent they just wanted the grant money but not the homeless which came attached to it.

Now Wallace says the money is gone, there isn’t much to show for it, and the two years is up in a few weeks.

“Mayor Wallace tried to ring the bell on Homekey in her community and the Tahoe Coalition, but our Board of Supervisors failed to listen,” Colleen Hearn said.

Below is the DOJ letter regarding their lawsuit, as well as the response. The DOJ letter starts on page 5.

GBJ Response to AG Letter dated 11 16 22
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16 thoughts on “California’s Homeless Hustle is a House of Cards

  1. Meanwhile, in Sacramento, the problem also goes unabated. New encampments are springing up in places – including swanky East Sac where tents are now next to Mimosa House on J and 57th Streets. Even the feckless City Council ordinance to keep sidewalks clear 4 feet from the street are NOT enforced. This is a crisis of leadership. Who will be running for mayor when (if) Steinberg’s gig is up? Sacramento can not afford this.

  2. Katy Grimes, this is an EXCELLENT investigative report which I will be sharing, as tough emotionally as it is to read and take in. By focusing on ONE magnificent area of California, South Lake Tahoe and El Dorado County, and telling the tale, with horrifying specifics, of the Governor and his Gang of Criminals and their mobster-style threats and pillaging, it perfectly illustrates the scam and the con and thus the CRIME of what is and has been going on with “Project Roomkey” and “Project Homekey” —- just as ONE example of our CA leadership’s criminal enterprise —- as a destructive cover for a money grab. What is described here can reasonably be applied to all of California, urban and rural, and thus we can, at the very least, be educated about the details of how the scam operates to begin to take on the criminals in our OWN GOVERNMENT.

    Silver lining, some reason for hope: The staunch local government leaders who take their jobs seriously; former Mayor, current council member of South Lake Tahoe Tamara Wallace and some members of El Dorado County Board of Supervisors.

  3. While there is an abundance of reasons a person is homeless, I would like to know what percent of the homeless just want to be homeless for no reason at all and will never voluntarily agree to being housed. It seems to me that this sub-group needs a different solution than those that would prefer not to be homeless. The solution for each of these 2 groups needs to be differentiated before a solution can be developed. Those that prefer not to be homeless is the easier solution.

    1. Check out commenter Jaye’s triage categories if you want to easily remember who’s who:
      The “have nots”
      The “can nots”
      The “will nots”
      The “have nots” comprise the smallest percentage, probably 10 – (at most) 20%. They are the most motivated to be helped and help themselves within a reasonable period of time; say 6 months. Our faith-based missions have great success, for example, integrating such people back into society.
      The “can nots” and “will nots” comprise the largest percentage; 80 to 90%. “Can nots” are the seriously addicted and mentally ill; they must be removed from the streets for their own good, health, and safety —- for themselves and for the public —- and be institutionalized if necessary for as long as necessary.
      The “will nots” must be arrested and prodded into drug rehab with a stick and a carrot if that is a burgeoning problem that will end in those individuals moving into the “can nots” category (or in their death). Unfortunately it appears probably most “will nots” are those that have been released from prisons by our current CA ‘leadership.’ They are also coming into the state from other parts of the country once word spreads about the libertine and enabling CA policy.

      P.S. We’ve learned from Edward Ring’s “Homeless Industrial Complex” (for one) that our Dem politicians and parasites lining up at the gushing homeless money faucet are not interested in solving homelessness. There’s too much money in it.

  4. Some “historical” supplemental reading that gives further perspective for anyone interested. This article is from November 2021, to show you the intractability (purposeful? sure looks like it) of the problem and how CA ‘leadership’ is only making the problem worse (purposefully? sure looks like it):
    “Politico Fetishizes Gavin Newsom’s Project Roomkey as the Homelessness Solution. The Reality is Far More Complex”

  5. A lot more internal audits are needed:

    Voters passed ballot initiatives with good intentions, but there are no later audits of any proven benefits achieved. Time to compare campaign promises, voter expectations, funding stream generated ,and per cost of any measurable benefit and outcomes – besides more full employment for government union members.

    1. Mental Health Services Act (MHSA) – raising billions every year, with the voter intent to get people off the streets. Never happened but the money continues to pour in – a “tax the rich” ballot initiative.

    2. First Five – tobacco tax pre-school raising billions every year promising verifiable results as adults for children going through the First Five programs – which are now appear to just one more baby-sitting program with no measurable record of long term benefits.

    3. Stem Cell Research – state funded – how many decades of tax payer “research” have now gone on, with nary a a word of the promised stem cell benefits.

    4. Bullet Train – do we even pretend this is not a major money sink hole any longer?

    What government agencies do we continue to fund who are required to track these always well-intentioned voter initiatives?

    Because we never see the results, if anyone even remembers having signed away their paychecks to support them in the first place. How many of ” the rich” now leaving the state will cause under-funding of these current beneficiaries. This will then lead to demands for supplemental voter support who are not “rich” – but again will never provide cost-benefit arguments in their favor of their continuation.

  6. And the Homeless Industrial Complex only continues to grow every year. Enriched with billions of dollars in taxpayer money and protected by Democrat corruption. In the end, it’s all one big giant grift to siphon away tax money in order to make favored Democrat cronies rich who in turn funnel some of the money back into Democrat political campaigns. Homelessness will never be “solved” because none of the people in charge actually want it to be solved as it provides them with both political power and wealth. Meanwhile, the typical California voter is completely oblivious to all of this and just believes whatever whitewashed narrative the propaganda press feeds them (“Homelessness is totally only the result of a lack of housing!”). So on and on it goes while community after community continues to be devastated in the process.

  7. As a Social Worker in CA, working for a county, I found that churches and community organizations that were faith based did far better at helping then these gov funded NGOs, especially in rural areas. I often referred clients to local churches for food, clothing etc…. in conjunction with county run services. This money given to these horrible NGO’s is money that could be given directly to county social services who can collaborate with other agencies ie law enforcement, churches (AA/NA are often held in church halls), well established community NGOs. County programs are at least held to a higher standard of accountability then these fly by night ones being used now by Newsome who is just basically rewarding and enticing these con artists by throwing all this money at them with no accountability! It is the welfare/homeless industrial complex on steroids and the people in charge are absolute idiots who have never done a day of case management in their lives, nor do they want to because it is real work. We need a total revamp of the system to include collaboration between law enforcement, social services, behavioral health services, community services ie churches, parole/probation and the courts. We also need to get rid of Prop 47, legalization of pot, prison realignment, no cash bail etc…. Without accountability and getting these people out of their street environments, no not into our hospitals, the homeless issue will never get better. The homeless are victims of this woke scam that Newsome and company are running with your tax dollars and it is just sick! Giving a hand up, not a hand out was why I went into the field of Social Work but unfortunately that is no longer because of these con artists who need to keep people down and on the system to generate big salaries and power for themselves.

    1. We learned the same thing in our local community- Salvation Army and Rescue Mission had the best results.

      But our “secular” city council wanted a non-religious shelter, so they opened one and it only attracted failure and introduced concentrated community malaise to the surrounding businesses and residences. We had along string of Unitarian mayors for some reason.

      Additionally, the latest “housing first” scam creams off only the higher functioning “homeless” and leaves the hardcore untouched, which are the real problems on the streets to continue setting meth cooking fires burning down parts of our city and threatening homes, rampant drug dealing and prostitution, as well and huge problems with increasing residential burglaries and bicycle thefts.

      Which does not even include the taxpayer expenses involved in trash clean-up and mandatory social and health services this population has the luxury to receive for free.

      Meanwhile Homeless Inc staffers merrily go on to their next fully funded paychecks, leaving their failures behind seeking another fully funded grant that only introduces problems into a new part of town.

  8. The problem that democrats cannot say “no”. They cannot say, “You can’t do this”, all they can say is “Give me more money and we will try harder.”
    Let’s try this. Test every vagrant for drugs we arrest, then force them into rehab. The next time, more rehab with some labor. Keep the pressure on until they clean up, go to prison for serious crimes, or die.
    This is more merciful to both sides than what we have now.

  9. These un-housed people living in tents on the streets is bad publicity for Gavin and the folks in D.C. know it.
    This is a real thorn in his political ambitions and he wants them out of sight as quickly as possible so he is willing to spend as much of YOUR money so that he can give lip service to solving the problem.
    I just hope the Globe continues to print photographs of the filth, because you sure as heck wont see it in the Bee or on local news channels.

    1. No kidding, DL. But we’ll probably never know, because I have a sneaking suspicion “Cheyenne Purrington” was not her real name. In fact, it’s such a great fake name I’m thinking of using it for my own alias here. 🙂

  10. The perfect place for all these homeless are in the closed-down prisons, the state is going to close 3 of them. And I’m serious. Logistically, it is a perfect place to move them. Every aspect of care, shelter, food, water, sanitation, showers, beds, heat, industrial kitchens, medical care, and social services are all already established. The state could control narcotics easier. Liberals will cry but after taking down the barbed wire, it’s a fortified, state-run facility with everything the homeless need

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