Sacramento’s $2.9 million loan to a nonprofit for homeless housing has remained unused for four years, even though the project was supposed to be built on vacant land in the Fruitridge Road area. The city loaned the money in 2022 to Step Up on Second, a Santa Monica-based homeless services group, for a plan to build 100 to 125 affordable housing units for homeless families.[1]
Under the terms of the agreement, the city could have declared the loan in default and taken the property if residents were not moved in by July 2024. That deadline passed two years ago, but construction has not started and the city has taken no action.[1]
The group’s troubles are not limited to Sacramento. Earlier this year, California Attorney General’s Office sued Step Up and a development partner, saying they failed to build motel conversions funded by more than $100 million in state money for homeless housing. Step Up later reached a $3 million settlement with the state in October.[1]
Sacramento Mayor Kevin McCarty said the city is considering ways to reclaim the site, and Councilwoman Katie Valenzuela said the city should recover the land if Step Up does not repay the loan. Step Up said it still intends to move forward with the project, but it did not provide additional financing details or a timeline.[1]
