Using its emergency powers, Los Angeles may “commandeer” hotels that refuse to take homeless vouchers during the pandemic. Luxury hotels like the InterContinental Downtown and Ritz Carlton have pushed back on pleas to house the homeless.
Project Roomkey is a “collaborative effort by the State, County and the Los Angeles Homeless Services Authority (LAHSA) to secure hotel and motel rooms for vulnerable people experiencing homelessness.” The goal is to reduce the spread of virus by taking vulnerable people off the streets. Los Angeles hopes to secure 15,000 hotel rooms in the days ahead to meet this goal.
Hotels are not being asked to rent rooms for free. Instead, the Federal Emergency Management Agency (FEMA) will pay hotels 75% of the room cost. But many hotels have resisted, citing:
- liability issues
- security concerns
- objections from corporate management
- fear of lost revenue from being branded a “homeless hotel”
Notable holdouts include luxury hotels like the InterContinental Grand downtown or the Ritz Carlton – JW Marriott complex at LA Live, a vast entertainment complex in LA’s South Park District.
Art Avaness, a realtor who manages the Ritz Carlton, told KTTV that the plan was well-intentioned, but unworkable…at his properties.
“In theory, it’s a great idea, I support the program but in practice specifically for this property, it just isn’t, because you want to house hundreds of homeless people in a structure that’s literally in the same building with 224 homeowners? Having it in your own home basically is just a little too much, in fact, it’s offensive.”
But the Los Angeles City Council is now exploring ways it can commandeer hotels, especially luxury hotels, which do not participate. Mike Bonin, a LA City Councilmember, said:
“As we look to hotels to step up, those that have benefited from public investment and public largess – those are the first that we should be looking towards.”
Bonin has directed city officials to compile a list of all hotels in the city which have benefited from tax breaks.
Economic incentive for development is hardly unique to Los Angeles, but luxury hotels have benefited greatly from tax breaks and other incentives. For example, LA Live received over $270 million in incentives (over a 25 period). The InterContinental is slated to receive $250 million over 25 years.
This has Bonin scratching his head:
“The hotels are losing money and hotel workers aren’t getting paid.
“This, literally, can be a win, win, win – a triple bottom line of improving public health, helping the hotels stay solvent, which helps he city treasury and putting people back to work.”
Los Angeles has determined that it can use its emergency powers to “commandeer” hotels. It wants to avoid this because litigation would be costly and may end up taking longer to resolve than an approach which encourages voluntarily participation. But the warning has been issued: you might soon be sharing your $500/night hotel room with shoeless Joe.
During this time of crisis, is such government action justified? Should California and California taxpayers be footing huge hotel bills instead of more aggressively pursing a long-term solution?