City exploring private real estate for homeless shelters ahead of Marshalling Yard closure

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The city is searching through a variety of private real estate options that could serve as temporary congregate shelter space beginning in March 2025, when the Marshalling Yard facility is slated to close.

Last week, City Council’s Public Health Committee heard a presentation from the Homeless Strategy Office on the progress in creating a plan to wind down operations at the 300-bed shelter that has become the primary location for diverting those living in encampments or other areas without housing.

With the closure looming, HSO Director David Gray told the committee that the Marshalling Yard will begin limiting its intake of new clients beginning in September to those who already have a pathway to rehousing, whether with a family member or via a voucher for permanent supportive housing. In December, the facility will stop accepting new clients entirely so staff can focus on rehousing the remaining people in permanent housing or in shelter facilities operated elsewhere in the city.

“When possible, we’re gonna move people into permanent housing or a housing opportunity,” Gray said in response to questions about contingencies for the unhoused currently living at the Marshalling Yard. “We might move people into shelter, but we are not going to return anybody to the streets, unless that client decides to reject every opportunity that we give them and then they self-select to return to homelessness.”

Gray said HSO has examined all available city real estate options and not found suitable locations that aren’t a flood risk or located far away from service providers needed to help manage the care for hundreds of unhoused people. Gray said that scarcity of public options has shifted the search to private real estate holdings throughout the city, with vacant office space, medical offices, warehouses and gymnasiums/fitness facilities among the most likely options.

Council Member Ryan Alter highlighted office buildings as a potential option, noting that the city would prefer to acquire any real estate it used for new congregate shelter space rather than leasing the property.

“There aren’t many 70,000-square-foot facilities set up like the Marshalling Yard, but one could argue maybe the Marshalling Yard is not the ideal setup to begin with, so we have the opportunity here to figure out what is right,” he said. “I’m curious, as we think about office space, which typically wouldn’t be thought of as any kind of residential space. But the Marshalling Yard itself is just one big open space, and an uninhabited office maybe is that same, just stacked. Instead of one huge plate, you have multiple plates, but that could actually help serve to separate populations.”

On the possibility of setting up new authorized encampment spaces similar to the Esperanza Community, which Council recently authorized increasing by 100 inhabitants with $1 million more in support, Gray said those operations can typically be completed in seven to 10 months.

“Even in the noncongregate shelter setting, if the land is right and things are in the right conditions, those can come up in seven to 10 months,” he said. “(At Esperanza) we feel like we can get those hundred beds online within the next eight months. To do those, there’s a lot you have to do … to actually pop up the shelter is gonna depend on if there’s utilities onsite – or are we bringing in showers and restrooms like we did to augment some of the operations over at the Marshalling Yard?”