Price of proposed homeless shelter goes up again

The nonprofit LifeMoves has been hired by the city of Palo Alto to build this homeless shelter at the east end of San Antonio Road in Palo Alto.

Daily Post Staff Writer

The cost of building a new homeless shelter in Palo Alto has gone up again.

An 88-unit shelter at the end of San Antonio Road is now estimated to cost twice as much as what council originally approved, and the city is asking for donations to close a $6 million funding gap.

To cut costs, the architect has proposed eliminating several features from the shelter. The project would no longer have solar panels and electric vehicle charging, 24/7 on-site security, or sun shades.

Wire fencing would be used rather than something with more curb appeal, and spaces for families would be consolidated with spaces for single residents, according to an update that City Manager Ed Shikada sent to Palo Alto City Council.

Construction is projected to cost $34.4 million, starting this summer and finishing early 2025, Shikada said.

Council approved the project in September 2021 with a price tag of $17.6 million.

LifeMoves, the nonprofit hired by the city to run the shelter, bumped up its cost estimate two months later to $26 million.

Most of the cost is covered by the state’s Project Homekey, a large fund that is given to cities and counties to build housing for the homeless.

Developer John Sobrato is donating $5 million, and LifeMoves has committed $2 million.

Council pledged $1 million annually for the next seven years to support operations.

With the cost increase, City Manager Ed Shikada suggested in a report that council members spend another $2.5 million to $4.5 million, depending on if they want to bring back any of the features that were abandoned to save money.

The city will apply with the state to extend the deadline for completing the project beyond August 2024, Shikada said.


  1. I’m tired of my tax dollars being directed to the homeless. If we gave every homeless person a house then what is to stop others from coming from out of area??? Will they expect the same thing.. no.. I’m done. Empathy tank is empty

  2. Many of the street dwellers are drug addicts. That is true. Some of them also have jobs. They just don’t make enough money to pay rent.

    Please look into your heart (and the history of your own immigrant forbears) and find some compassion for the people who will be living there. If it makes you feel better, there are homeless and drug addicts all over the country.

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