Hotels Demand SF Pay Up for Damage During Shelter-in-Place

Owners of San Francisco hotels leased as temporary shelter-in-place sites for unhoused individuals are asking the city to pay up for damage incurred in the process, according to legislation filed with the Board of Supervisors. 

The Good Hotel, Hotel Vertigo, Hotel Union Square and Tilden Hotel are among those who have filed, or are planning to file, claims against the city for “significant damage to real and personal property,” according to the filing. The Board of Supervisors plans to convene in a closed session on June 7, meaning it’s not open to the public, to discuss anticipated litigation over the damage claims. 

Jen Kwart, a spokesperson for the city attorney, confirmed that the owner of the Hotel Union Square had already submitted a claim. Others listed in the filing have informed the city of damages.

A copy of the claim submitted by Hotel Union Square totals $5,600,000 in damage to property, plus $560,000 for loss of use of the hotel for one month. According to an attached contract signed in April 2020, the city agreed to pay a flat rate of $12,969 per day for an amount not to exceed $7,768,349 for use of the entire hotel. The city vacated the hotel at the end of September 2021.

The claim alleged extensive water and smoke damage that rendered the units un-rentable for the subsequent month of October.

During the Covid pandemic, the city entered into booking contracts with 29 hotels for use as temporary lodging for unhoused individuals and others who needed to more easily isolate themselves from the virus. Of those, 14 sites are still leased and occupied, according to the filing. 

With the help of emergency federal funding, the city spent millions leasing hotels and motels at the onset of the pandemic. The Department of Homelessness and Supportive Housing has shuttered some of those sites over the past several months and aims to wind down the program by September 2022.

The shelter-in-place hotels are expected to be funded in part by the Federal Emergency Management agency, with the White House pledging last November to reimburse 100% of eligible expenses through April 1, 2022. 

The total costs of shelter-in-place hotels have run into the hundreds of millions: As of last November, the city had requested $259.4 million in federal reimbursement for the program.

A city dashboard indicates that 906 people still occupy the shelter-in-place sites; the city aims to rehouse those residents in permanent supportive housing by the end of the program. Mayor London Breed recently credited the shelter-in-place program for helping to decrease the number of unsheltered residents in the city’s recent homeless “point in time” assessment.