Anaheim, California: Adaptive Reuse of Motel Provides Permanent Supportive Housing

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Anaheim, California: Adaptive Reuse of Motel Provides Permanent Supportive Housing

 

With more than 1,000 people experiencing homelessness reported in 2021, the city of Anaheim has the largest homeless population in Orange County, California. The city has launched several initiatives to address the crisis, including a collaboration with nonprofit developer Jamboree, which resulted in the passage of an ordinance streamlining the conversion of motels to permanent supportive housing for some of the city’s most vulnerable residents. The 2019 ordinance led the city and Jamboree to transform an Econo Lodge motel into Buena Esperanza, a 69-unit permanent supportive housing project. Since opening in 2021 as Anaheim’s first conversion project under the new ordinance, Buena Esperanza has received numerous awards, including a 2022 Community Impact Award from the National Association of Homebuilders.

Motel Conversion Ordinance

Buena Esperanza occupies the former site of a moderately priced Econo Lodge motel that was popular among tourists visiting the nearby Disneyland Resort. When Jamboree initially expressed interest in the property, the motel was in good condition and attracted a fair amount of business, but the sale served as an exit opportunity for the aging owners.

Although Jamboree already had a track record for constructing and rehabilitating affordable housing, Buena Esperanza was the developer’s first motel conversion, and the task presented challenges. The primary issue uncovered after initiating the project was that no city ordinances addressed hotel/motel conversions.

Anaheim was cautious about pursuing any action that could affect the hospitality industry, because the transient occupancy tax accounts for approximately half of the city’s tax revenue. The city was concerned that making the conversion path too attractive would encourage developers to convert too many motels to supportive housing, reducing city revenue. To strike a balance between providing affordable housing and preserving motel room inventory, the ordinance is designed to expire once the number of permanent supportive housing units created by motel conversions in the city reaches 303 units. After presentations and discussions among Jamboree, the planning commission, and the city council, the city helped drive the project. The discussions helped address pushback and educate stakeholders and the community about permanent supportive housing. To counter misconceptions about housing for veterans experiencing homelessness and people living with mental illness, Jamboree pointed to past projects to demonstrate their success and depict a more accurate image of this type of housing.

Other factors that fueled government support were the revitalization benefits the adaptive reuse project would bring to the area. At least 20 of the motels constructed before the Disneyland Resort was completed are outdated, saddled with inefficient spatial layouts for housing families and struggling with human trafficking and drug use. Jamboree was able to show that renovating and transforming these problematic facilities could catalyze new development in the area, raising both property values and tax revenues.

Buena Esperanza Design as Catalyst for City and County Support

Buena Esperanza, Spanish for “The Good Hope,” was named after the ranch that once stood on the land and is a Spanish Colonial Revival-styled, is a two-story apartment community serving residents exiting homelessness who are veterans or experiencing mental illness. The property consists of 69 income-restricted studio apartments containing a small kitchen and full private bath for individuals earning no more than 30 percent of the area median income. The building was renovated to comply with the California Green Building Standards Code. The modernized Buena Esperanza instills a sense of dignity for the residents, who see living in the development as the source of a fresh start and bright future for themselves.

According to Michael Massie, chief development officer of Jamboree Housing, city staff had some initial trepidation about the small size of the units, but they committed to the plan once they saw the developer’s design of smaller units in Sacramento. The city also indicated that Jamboree should incorporate community space to compensate for the small unit sizes, and, in response, Jamboree redesigned the development’s parking spaces and the former swimming pool as a larger community space. The motel’s courtyard became a flexible space that includes a community kitchen, a passive recreation area, outdoor classrooms, and office space. Residents also have access to a computer lab and office spaces that replaced the former motel lobby. The project provides bicycle and pedestrian access to mass transit and open spaces.

Buena Esperanza’s benefits extend beyond the renovation of the motel and include supportive services to meet the needs of its tenants. Orange County’s U.S. Department of Housing and Urban Development-Veterans Affairs Supportive Housing (OC HUD-VASH) team made housing stability possible for residents who have experienced homelessness, particularly veterans and individuals experiencing mental illness. To support residents transitioning to more stable housing, Buena Esperanza offers onsite services, including around-the-clock access to clinical services, life skills and vocational training, community-building activities, and community referrals. These services are provided by the OC HUD-VASH team and Orange County’s Home First Full-Service Partnership program, which offers intensive outpatient services to adults experiencing a severe mental illness who currently are not receiving adequate support, are potentially facing homelessness, are involved in the criminal justice system, or are frequently in need of psychiatric care.

Funding

Jamboree partnered with local organizations and Orange County to provide $28 million in financing for Buena Esperanza (table 1). With the support of Providence’s St. Joseph Community Partnership Fund, Jamboree closed escrow on the property with a competitive interest rate, resulting in substantial cost savings. Funding from Orange County’s Housing Trust totaled $2 million, which the nonprofit sourced from a $5 million donation from Disneyland Resorts. The contribution is a pledge to provide gap financing for affordable housing projects.

Additional Awards

Buena Esperanza demonstrated the community benefits and feasibility of converting motels to permanent supportive housing, and its success spurred more successful conversions in Anaheim. The project represents one step toward fulfilling Orange County’s commitment to fund 2,700 supportive housing units. Because of this commitment, the city received a 2019 Turning Red Tape into Red Carpet Award from the Orange County Business Council for its leadership in real estate reuse and revitalization. The development also received several awards at the national, regional, and county levels in 2022. These included the Multi-Housing News Gold Excellence Award for Best Environmental, Social, and Governance Program and a Silver Excellence Award for Best Adaptive Reuse. The Orange County Community Housing Corporation recognized Buena Esperanza as the 2022 Development of the Year.