California Homekey Motel in El Monte Remains Unfinished After $19M in State Funds

A single project's prolonged delay illustrates the operational and financial risks embedded in California's $3.8 billion Homekey program, which converts existing properties into homeless housing...

A former motel in El Monte, California, purchased in 2020 with state Homekey funds, remains unfinished nearly six years after acquisition, with the project having consumed approximately $19 million in taxpayer dollars, according to a report published September 22, 2026, by the New York Post.

The property, formerly known as the M Motel, was acquired as part of Governor Gavin Newsom's Homekey program, a state initiative funded at $3.8 billion and designed to purchase existing hotels and motels for conversion into permanent or interim housing for people experiencing homelessness, according to the California Department of Housing and Community Development's published program records.

Residents in properties adjacent to the El Monte site told the New York Post they have experienced years of early-morning construction activity, airborne dirt and debris, and, more recently, repeated gas leaks at the site. The nature, frequency, and regulatory status of those gas leak incidents are not specified in the source material. A review of incident reports filed with the California Public Utilities Commission or the local gas utility would be the document most likely to contain that detail.

The Homekey program was launched in 2020 under emergency conditions created by the COVID-19 pandemic, when hotel and motel properties became available at reduced market values. The California Department of Housing and Community Development administered the program through competitive grants to local governments and nonprofit developers, according to program documentation published by the agency.

El Monte is a city of approximately 106,000 residents in Los Angeles County. It is one of dozens of municipalities that received Homekey allocations during the program's first three funding rounds. The specific grant amount attributed to the El Monte motel project and the identity of the local grantee administering the conversion are not confirmed in the source material. California's eCivis grants database and HCD's Homekey grant award records are the public documents that would contain those figures.

Construction timelines for affordable and supportive housing projects in California are shaped by multiple regulatory layers, including environmental review under the California Environmental Quality Act, local permitting, and state building code compliance. Projects that involve occupied or formerly occupied structures may also face lead and asbestos abatement requirements that extend schedules and increase costs. Whether any of those specific factors account for the El Monte delay is not stated in the source material.

The El Monte project is not the only Homekey conversion to face cost or schedule questions. A 2024 audit by the California State Auditor examined a sample of Homekey projects and found that some grantees lacked adequate documentation of project progress, though the audit did not single out El Monte by name. The full audit is publicly available through the California State Auditor's office.

The Homekey program has been a central element of Governor Newsom's stated strategy for addressing homelessness in California, a policy area that has drawn sustained legislative scrutiny from both Republican and Democratic members of the California Legislature. In 2025, the Legislature appropriated an additional tranche of Homekey funding as part of the state budget, the specific dollar amount of which is recorded in the 2025-2026 California Budget Act.

Federal funds have also contributed to California homelessness initiatives through the U.S. Department of Housing and Urban Development's Emergency Solutions Grants and Continuum of Care programs. Whether any federal dollars are embedded in the El Monte project's $19 million cost figure is not confirmed in the source material. A Freedom of Information Act request to HUD or a review of USASpending.gov records for El Monte would be the appropriate avenue to determine federal involvement.

What remains unknown is the current construction completion date projected by the El Monte grantee, the total number of housing units the converted facility is designed to produce, the identities of any contractors working on the site, and whether any state or local agency has issued a formal notice of noncompliance to the project sponsor. The California Department of Housing and Community Development's Homekey program records, the El Monte city building permit database, and any corrective action correspondence between HCD and the grantee are the public documents most likely to answer those questions.