Mercy Housing California is transforming a century-old hotel into permanent supportive housing for individuals who are experiencing homelessness in Sacramento, California.
Crews have begun clearing out the interior of the Capitol Park Hotel, the city’s largest historic downtown single-room occupancy residential hotel that sits less than a block away from the state Capitol.
“Mercy Housing’s start on the Capitol Park Hotel represents a significant milestone for our city in our efforts to address homelessness,” said Mayor Darrell Steinberg. “With 134 homes now under construction, Mercy Housing’s team makes a significant contribution to our supply of much-needed permanent supportive housing.”
Originally built in 1912, the building has served many purposes over the decades, including as a furniture store and warehouse, two separate hotels, and a business college. Known as the Capitol Park Hotel since the 1960s, it was constructed as two separate buildings connected on all but one of its floors.
From September 2019 to October 2020, the hotel served as a temporary homeless shelter as part of the city of Sacramento and Sacramento Housing and Redevelopment Agency’s (SHRA’s) urgent response to the worsening homeless crisis.
When complete, the community will be comprised of 134 studio apartments. To ensure the dilapidated building will meet current codes and last for decades to come, Mercy Housing will need to complete extensive work, while still maintaining its historic elegance. The building must be seismically upgraded with full-height concrete moment frames. To reconfigure the interior rooms into studio apartments with kitchenettes and full bathrooms, nearly all interior space will be remodeled, with historic elements preserved.
Amenities will include a spacious community room, meeting areas for individual and group settings, and on-site bicycle parking. There will be on-site resident services provided by both the county of Sacramento and WellSpace Health, property management, and round-the-clock desk clerk service. Construction will take approximately 20 months with all apartment homes occupied before the end of 2022.
“This was a collective effort from the very beginning, inspired and led by Mayor Steinberg and the City Council’s call for the Sacramento community to step up our compassionate response to homelessness,” said Mercy Housing California president Doug Shoemaker. He also added, “The work of creating permanent supportive housing could not be a more complex set of partnerships and funding mechanisms. We are so proud of how all our partners on this project have answered that call.”
Capitol Park Hotel is one of several successful competitive applications that the county has made to the state Housing and Community Development Department’s No Place Like Home program that provides funding for permanent housing units for individuals and families experiencing homelessness and who are in need of mental health services.
The $64 million project also utilizes state and federal low-income housing tax credit and historic tax credit equity from syndicator Enterprise Housing Credit Investments. JPMorgan Chase is the tax credit investor and construction lender.
Other financing includes a SHRA loan and funding from the Federal Home Loan Bank Affordable Housing Program with member Mechanics Bank. All the units are supported by the project-based Section 8 program through SHRA.
“There’s an ongoing need for affordable housing options across the country, which makes the adaptive reuse of the historic Capitol Park Hotel into studio units so impactful for the Sacramento community,” said James Vossoughi, vice president, community development banking, Chase. “We’re proud and excited to work with Mercy Housing on this transformational project that will make a difference for formerly homeless individuals in the surrounding community.