The lease for Sacramento’s X Street homeless shelter is expiring. Now what?
The future of a Sacramento homeless shelter remains in limbo as some council members rethink how the city’s homeless money should be spent.
The X Street Navigation Center, near Broadway and Alhambra Boulevard, opened in 2021 along with the Meadowview Navigation Center. The property is owned by Caltrans and the lease ends early next year.
The city has asked Caltrans to extend their agreement for land near the interchange of Highway 99, Highway 50 and the Capital City Freeway.
“If none of that pans out,” Pedro said during a May 5 City Council meeting. “Then X Street will be shut down.”
Caltrans and the city of Sacramento signed in 2020 an agreement for a $1 per month rent with a $5,000 per year administrative fee. The total term of the lease cannot exceed seven years, according to the lease.
City officials requested to extend X Street’s lease about three to five years, wrote Caltrans spokesperson Dennis Keaton. However, the federal government requires a higher rate for the lease and will no longer allow the $1 per month nominal charge, he wrote in an email.
The Federal Highway Administration also objected to the initial construction of the shelter at the site during the first Trump administration.
Councilmember Caity Maple, who represents the area, said she pondered if a shelter stretching underneath a web of roaring freeways is the appropriate place for a homeless shelter.
“I wonder if there’s a better use for our dollars to still pivot and use it for the services that we need, but not at that location,” Maple said during Tuesday’s City Council meeting.
The future of X Street comes as council members have moved to cap DCR’s funding while discussing strategies to plug a $66 million budget deficit. The 2026 Point-in-Time Count released Thursday found the number of unhoused people increased 13% across Sacramento County, but dropped about 20% in the city of Sacramento.
Councilmember Karina Talamantes proposed cutting $10 million from DCR and capping the city’s expenditures from its general fund, to $30 million for homelessness. Talamantes and Councilmember Lisa Kaplan also sought to strip funding from a temporary homeless shelter in North Natomas.
“This is not about abandoning our responsibility,” Talamantes said. “The city was never meant to be in this business. We’re responsible for parks, fire, police, code enforcement, building affordable housing and core city services.”
Councilmember Phil Pluckebaum suggested reducing or eliminating DCR through “outsourcing.”
The city of Sacramento projected in March spending $48 million from its general fund to fund homelessness services for next year. That number had dropped to $33.6 million as of last week.
Sacramento is also uncertain how much money the state will allocate for homeless funding. In years past, Gov. Gavin Newsom distributed $1 billion to local jurisdictions.
But this year Newsom only earmarked $500 million, even though Sacramento Mayor Kevin McCarty and other elected officials lobbied his office to increase spending.
