Riverside Rejects $20.1M Homekey+ Grant, Halting 114-Unit Permanent Supportive Housing Project

The Riverside City Council voted 4-3 on Jan. 13 to reject a state Homekey+ award of up to $20,137,410, halting a plan to convert a University Avenue motel into 114 studio apartments that supporters said would have brought permanent supportive housing online quickly — and touched off a tense finish to a meeting where most speakers urged approval.

Councilmember Clarissa Cervantes, who represents Ward 2 where the project site sits, voted yes alongside Councilmembers Jim Perry and Steve Hemenway. Councilmembers Philip Falcone, Steven Robillard, Chuck Conder and Sean Mill voted no.

As the final votes landed, frustration in the chamber rose. Some attendees shouted remarks at councilmembers as they left, angry that a project with broad public support had been rejected. The meeting drew more than 100 people in person and the mayor shortened public comment amid heavy participation.

After the vote, Inland Empire Community News contacted the four councilmembers who voted no and asked what influenced their decisions. Falcone responded saying: “I spoke at length on this topic at the May City Council meeting when the grant application was discussed. Those comments remain true.” Robillard did not comment; his assistant, Sol Garay, said: “Unfortunately, Councilmember Robillard is unable for a comment. We encourage you to review the City Council recording for the full discussion and context.” Conder did not respond.

The project — University Terrace Homes — would have acquired and rehabilitated the Quality Inn at 1590 University Ave., converting existing rooms into 114 studio units with kitchens, bathrooms and living areas. Residents would sign 12-month leases, and there would be no limit on length of stay so long as tenants complied with lease terms and paid rent.

The plan included space for on-site operations — including offices for property management and case managers — along with a resident meeting and training room. The development team also proposed a gated perimeter, round-the-clock security, and on-site staff.

The conversion would have produced 94 permanent supportive housing units affordable at 30% of area median income and 20 affordable units at 50% of area median income. Priority would have been given to local seniors and veterans. Eighteen units were slated to be reserved for residents with mobility disabilities and 12 for residents with hearing or vision disabilities.

The Homekey+ program, tied to Proposition 1 approved by voters in March 2024, is intended to increase housing for people experiencing homelessness or at risk of homelessness who also face behavioral health challenges, including serious mental illness or substance use disorder.

Councilwoman Cervantes argued the council’s vote amounted to turning away a rare, time-sensitive chance to add a meaningful number of units in a short window — and she said the project’s target population had been misunderstood.

“People were calling it a homeless shelter,” Cervantes said in an interview after the vote. “That’s not what this is and that’s not what it was going to be.”

Instead, she said, the units were intended for people already moving through the housing system and seeking placement.

“These are people on a wait list that are preapproved, that are seeking to be housed, that want to call one of these units home,” she said. “We should applaud that.”

She also said the project’s design was unusually service-heavy, and she pointed to the staffing plan as evidence that the development team had tried to anticipate community concerns.

“This project would have had one of the highest case-manager-to-resident ratios in the county,” Cervantes said.

The project also came with a public-safety argument from city staff: the existing motel has generated significant police activity, including 97 police service calls requiring 222 officer responses between Jan. 1, 2024, and April 26, 2025, plus 67 additional calls from April 27 through Oct. 31, 2025. City staff cited incidents ranging from 911 hang-ups to auto theft and aggravated assault, and said adaptive reuse could stabilize a property that has long strained resources.

But Tuesday’s vote was shaped as much by politics and public trust as by project design.

Cervantes said opposition surged in May after what she described as misinformation spread quickly, forcing her office and city housing staff to spend months in damage control — explaining eligibility rules, services, security and operations.

“When misinformation goes out, it spreads like wildfire,” she said.

She said that over time, outreach efforts shifted some nearby stakeholders from opposition to neutral, and in some cases to support. She singled out the Farmhouse Collective as one of the most persistent critics, describing its owners as a loud voice pressing the council to oppose the conversion.

“Unfortunately the Farmhouse Collective was one of the primary and loudest voices that went to the council in objection to this project,” she said, adding that she believed the business and its owners influenced the political pressure around the vote.

Inside the council chamber, Cervantes said support appeared dominant. She said she asked supporters to stand and estimated that 80% to 90% of those present rose. She also said public input leaned heavily toward approval.

Still, the council majority voted it down — and Cervantes said what bothered her most was the silence that followed.

“I was very shocked and disappointed to notice that two of my colleagues who voted no didn’t even say why or justify their vote,” she said, referring to Falcone and Conder. “They didn’t ask any questions. They didn’t state why they were in opposition to this project. They simply voted no.”

Cervantes said other councilmembers had raised concerns months earlier, but she argued those issues had been addressed through the project’s operations plan, security commitments and staffing structure.

“It felt like, unfortunately, folks came with premeditated decisions or had already made their mind up,” she said. “That’s not a fair public hearing for an item like this.”

She framed the vote as a test of whether the city’s stated commitment to reducing homelessness extends to accepting permanent supportive housing in real neighborhoods.

“If we don’t want homelessness, if we don’t want to see unhoused people in our streets, we have to be open to building housing to get them off the streets,” she said. “And unfortunately, that was part of the narrative tonight — ‘I don’t oppose affordable housing, but this isn’t the right site.’ And it’s like nowhere feels good.”

Cervantes also emphasized the human stakes she said were lost in the debate, pointing to the project’s senior and disability focus.

“I just don’t understand how we could say no to housing seniors, veterans and people with disabilities,” she said.

The financial structure had been one of the core flashpoints in public discussion. The total project budget was $31,710,096, including $26,622,300 in total development costs and $5,050,000 in 10-year operating costs. The city’s capital match contribution was $6,484,890 from Homeless Housing, Assistance and Prevention funds. The operating match totaled $2,750,000, funded through a blend of federal sources and HHAP.

The project also had rental assistance lined up. On Sept. 3, 2025, Riverside Housing Development Corporation was notified that the project would receive 94 Section 8 project-based vouchers, which tie subsidies to units and help keep rents affordable for eligible tenants.

City documents also underscored the demand pressure: as of Nov. 20, 2025, 312 individuals had been prescreened and preapproved for housing through the Coordinated Entry System, with 219 awaiting a permanent supportive housing referral. Ninety-one of those waiting were aged 55 or older.

After the council’s rejection, Cervantes said the city would have to notify the state that Riverside would not accept the award, ending the opportunity.

“We are essentially going to have to decline the $21 million that they have awarded us,” she said.

She argued the consequences could ripple beyond this project, warning that rejecting a major state award could weaken Riverside’s credibility in future grant cycles.

“When a big city says no to funding, the state usually doesn’t then take your future applications seriously,” Cervantes said. “Why are we going to award you if you’re going to say no?”

Despite the loss, Cervantes said the months-long campaign revealed something she views as a path forward: a sizable coalition of residents, nonprofit leaders, housing advocates and local voices willing to publicly support permanent supportive housing — even when it draws political heat.

“I want to give a deep bow of gratitude to our community,” she said. “I’m grateful to everyone who sees the humanity in our unhoused community and those that are struggling.”

Then she offered the line she said she returns to when the politics turn cold.

“We’re closer to becoming homeless than we are to becoming billionaires,” Cervantes concluded.