A Sacramento housing nonprofit is closing. More than 560 Sacramentans could be homeless

A Sacramento housing nonprofit is closing, and as a result more than 560 formerly homeless Sacramentans could again return to the streets.

Sacramento Self-Help Housing’s board of directors last week voted to close the organization, in part triggered by the county’s decision not to renew over $5 million in contracts to house the homeless, Board Chairman Ethan Evans said.

The county’s decision to let the contracts expire leaves the more than 560 tenants in Sacramento and 100 in Stockton at risk of being kicked out by June 30. SSHH has sent letters to the owners of seven houses, informing them that SSHH will remove the 42 tenants of the houses by May 18, Evans said. SSHH may move some of them into other temporary housing.

More letters are going out every week as part of a phased approach, Evans said.

“SSHH’s primary goal, now after 23 years of service to the community, is to effect a soft landing for the people we house, our employees, and our partners,” Evans said. “We are trying to avoid an immediate collapse, but that will take help from community partners, adding working capital and finding other operators to provide service to 667 homeless people over the next several months.”

The organization, which has over 180 employees, serves a major role in Sacramento’s mission to house the homeless. It leases houses from property owners, then leases the rooms to homeless people at a discounted rate substantially lower than the $1,100 it typically costs to rent a studio apartment in the capital city. The nonprofit is one of only a handful in Sacramento that place people directly from the streets into housing, often bypassing credit checks, background checks and other typical barriers.

The nonprofit’s annual revenue has surged alongside Sacramento County’s homeless population, growing from $2 million in 2015 to $14.5 million in 2020. Most of the money comes from gifts, grants and contributions, according to its 2019 tax return, the most recent available. Part of the growth stems from Sacramento County dramatically expanding its work with the nonprofit. The county funding for 145 SSHH beds is up from 75 in 2018.

The county Board of Supervisors will Tuesday consider an item to pay $1.7 million toward SSHH houses, partly to pay property owners back rent and to repair damage. It will not, however, change the likelihood of SSHH’s ability to stay open, and not affect the ability of SSHH to keep the tenants in the housing, Evans said.

What led the housing nonprofit to lose funding?

The nonprofit has come under criticism. It evicted at least 23 people in the last five years, a Sacramento Bee Jan. 18 report found, including a woman who was eight months pregnant, partly for “spending too much time in the bathroom.” Few details are available to the public about its revenue and expenses, the report found. SSHH has received about $36 million in contracts from the city and county since 2017.

In January, after receiving questions from The Bee, SSHH announced founder John Foley was no longer with the organization. It named Robert Spurlock as interim executive director and Evans, a Sacramento State sociology professor, as board chairman. Both pledged a fresh look at the organization’s practices and got to work on an overhaul.

But just weeks after the new leaders took over, in early February, county officials told Evans the county would not renew the contracts, he said. The loss of that cash flow, over $5 million a year, made it impossible for the already-struggling organization to stay afloat, Evans said.

“Although SSHH has taken steps recently to change their executive leadership, we are not seeing a well-articulated plan for how they can move forward as a viable partner for the sheltering of unhoused individuals on the county’s behalf at this time,” county spokeswoman Janna Haynes said in a Feb. 10 email to The Bee. “It became clear in early February that continuation of this program through SSHH was not feasible with such a large unpaid balance due to landlords and insufficient administrative capacity at SSHH to address these issues. At that time the county confirmed with SSHH that their contract would not be renewed in July.”

Bob Erlenbusch of the Sacramento Regional Coalition to End Homelessness criticized county officials for deciding to end the SSHH contracts without having a signed contract with a new organization to take over the vast majority of the leases. He suggested the county take over the leases itself, eliminating the need for a middle man.

“At least 600 tenants through no fault of their own are at risk of becoming homeless again,” Erlenbusch said. “If the county cannot find a contractor in the next seven days, it should take (the leases) over themselves”

About 175 of the tenants are currently living in houses covered under an SSHH contract with Sacramento County. The county has only so far signed a contract with a new organization, Consumer Self Help Housing, to take over 30 of those houses. It has put out a “request for proposals” seeking an organization for the remaining 145. But there are not many options, and it is not clear whether they will find one.

What’s being done to keep SSHH tenants off the street?

SSHH’s houses that are not in Sacramento County contracts are in contracts with organization Sacramento Steps Forward, the city of Elk Grove, and San Joaquin County, Evans said. It’s unclear whether those tenants will be kicked out. Neither SSF or Elk Grove was aware that SSHH is being closed, but both will work to ensure there are no evictions, spokespeople said.

The county is also working to ensure there are no evictions, Haynes said.

“Both SSHH and the county are working towards transitioning these leases from SSHH to the new operator such that there are no units lost,” Haynes said. “County staff are already in direct talks with landlords to work on agreements to remain in the program. Those talks are ongoing.”

But the evictions of 45 people could already be happening. Most tenants who get eviction notices leave quickly, instead of waiting until it goes to court, and ends up on their records, experts say.

On Thursday, several people were loading up a large Budget moving truck, and moving out of an SSHH house in North Sacramento’s Hagginwood neighborhood, said next door neighbor Manoj Kumar. The house was empty on Friday when a reporter visited.

SSHH tenant Kevin Haley was distraught to learn from a reporter Friday that he may be kicked out of his house in North Sacramento’s Northgate neighborhood. He walked his small dog Danger, breathing heavily and sweating as he processed the news.

“That would be awful,” Haley, 52 of Sacramento, said. “I’m gonna be in big trouble if I don’t get another place. I can’t believe they’re closing. They haven’t said a word to us. This is gonna be a hard day.”

Haley is worried about being homeless because he suffers from COPD, heart disease, and mental health issues, he said. He is very grateful for SSHH for getting him into housing, and hopes he can somehow stay, he said.

Kevin Haley, who suffers COPD and heart disease stood in the doorway with his dog Danger on Friday. He just moved into the Sacramento Self Help Housing house on Tenaya Street in North Sacramento on Tuesday. “I’m grateful for everything they have done so far and I hope it stays,” said Haley who had no idea where he would go if Sacramento Self Help Housing closed.

The evictions of 560 people would substantially add to the dire homeless crisis in Sacramento, where 9,300 people are already unhoused. Hundreds of people would likely have nowhere to go. More than 54,000 people are on waiting lists for housing vouchers and all 2,300 city and county shelter beds are full on any given night.

“The level of service available to Sacramento County and its cities to address the homeless crisis will shrink substantially,” Evans said.