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Dispute Between FEMA, California Over Covid Hotels Could Cost State $300M

California cities and counties are grappling with unexpected financial burdens after FEMA clarified the terms of its commitment to cover hotel costs for homeless individuals during the pandemic. The federal agency, initially agreeing to reimburse 100% of expenses under Project Roomkey, responded to requests for clarification on the program terms via a letter in October which outlined a series of program limitations, including a 20-day limit on stays, leaving local governments with an estimated collective cost of over $300 million. Local officials fear the impact on budgets, potential clawbacks, and the inability to respond to future disasters. San Francisco estimates the change will cost it $114 million. Sonoma County has $32 million at risk, while San Diego County has up to $28 million.

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