Elk Grove is spending up to $350,000 per bed to build a new homeless shelter — a decision that homeless activists said could be better spent on permanent housing.

The amount per bed is nearly triple the amount of the average cost per shelter bed for eight other Sacramento County shelters, according to a Sacramento Bee analysis.

The shelter, which is planned for the corner of Survey Road and East Stockton Boulevard, is estimated to cost between $12 million and $14.5 million, according to city staff. It would contain 25 units, some with capacity for two people and including five emergency beds. It will also contain four units for families.

Niki Jones, executive director of the Sacramento Regional Coalition to End Homelessness, praised Elk Grove for its plan to open a shelter but said the money could be better spent on permanent housing.

Only about 20% of the people who exited the eight Sacramento shelters in the last five years entered into permanent housing, the Bee’s December story found. Many remained in shelters for more than a year while awaiting housing on long wait lists.

“Everybody knows that the emergency shelter system is a bottleneck where we have tons of navigator programs, but nowhere for people to navigate to,” Jones said. “Maybe we should consider if there’s a responsibility for permanent solutions on the table when we’re spending $15 million.”

Jones said she was concerns about the walkability of the location, which is roughly 5 miles south of Elk Grove City Hall. The closest bus stop would require people to walk for at least 18 minutes.

Crystal Sanchez, president of the Sacramento Homeless Union, voiced similar concerns.

“This doesn’t solve homelessness, it sustains a costly system around it,” Sanchez said. “Elk Grove residents deserve transparency, accountability, and investments that build long-term housing stability not high-cost, short-term responses that leave people cycling through crisis while developers and contractors walk away paid.”

The city has not yet hired the contractor to operate the shelter. On top of the capital costs, the shelter would cost about $1.5 million per year to operate, according to a staff report.

City spokesperson Kristyn Nelson said the shelter will provide an “immediate option to ensure that someone remains safe and indoors” and would become a critical part of the city’s resources to address homelessness “from a person’s first loss of housing through securing permanent housing.” She also said the shelter would case management to overcome housing challenges and serves people with no income, while affordable housing typically requires a consistent source of income.

“The process of applying and being approved for affordable housing can take 30+ days, when a vacancy is even available,” Nelson said in a statement.

Could funds have been used on permanent housing?

A development team is building housing in midtown for $179,000 per unit, while another is building permanent tiny homes for $200,000 in North Sacramento.

The funding for the shelter will come from the city’s Measure E, the one-cent sales tax measure residents passed in 2022. The funds from that measure can legally go toward homelessness and economic development, and Nelson said that approximately $2 million is allocated for affordable housing in the current Measure E budget, a priority expenditure category last year.

The city also has an affordable housing fund to acquire land and provide gap financing for new projects, Nelson said, and has invested $84 million in 2,400 affordable housing units as of late 2025.

There are more shelter beds across Sacramento County than ever, but there is still a wait list of over 3,000 people, including 600 families, for a shelter bed on any given night, Emily Halcon, the county’s director of homeless services and housing, has said.

Elk Grove city staff estimates that there are between 100 to 150 homeless people living in the city of Elk Grove.

The city is closing its existing temporary 35-bed shelter, at Calvary Christian Center, in October 2028, according to the staff report.

Nearby business owners say they are ‘disappointed’

Andrew and Michelle Mohsenzadegan, who own Flatland Brewing Co. directly adjacent to the proposed homeless shelter site, said they were uncertain about the future of their small business and disappointed in the process the city took to come to its decision.

The couple said they had multiple conversations with city staff and council members and were opposed to the shelter being located “feet in front of” their business’ front door, though they have no opposition to a shelter in Elk Grove, and found out the location next door was being considered at the same time as the rest of residents.

“To find out as a business owner in the same manner that the general public was made aware, was truly astonishing,” the owners said in an email they sent to Sarah Bontrager, the city’s housing and public services manager, and Councilmembers Rod Brewer and Sergio Robles before the Feb. 11 decision. “Businesses were not given the chance to have their voices heard.”

They also said they were concerned that their business, which primarily serves alcohol, and nearby businesses like a gun range could be considered “potentially sensitive triggers to some shelter occupants.”

Councilmember says choice is ‘short-sighted’

The City Council chose the Survey Road site for a permanent shelter at its meeting on Feb. 11, eliminating two other proposed locations, one on Dwight Road, north of Laguna Boulevard, and one at 9296 E. Stockton Blvd.

Brewer, who represents most of the city’s eastside, said he ranked the East Stockton Boulevard site first because it was more accessible to employment and services like health care, as well as it being close to the existing temporary shelter located in Calvary Christian Center at 9499 E. Stockton Blvd., which would make the transition to the new shelter easier for guests.

He said he ranked the Survey Road site second, primarily because of the analysis of each site’s advantages and disadvantages based on community priorities.

Brewer was the sole vote against the motion to only consider the Survey Road site, which is in his district.

“I just felt that it was very short-sighted for us to just go with one option and one option only,” Brewer said. “If that option falls through, then the city has to go back and start all over again. Not only is it costly, but it really makes the process that much more stressful.”

What the city’s permanent homeless shelter will look like

The city is still in the process of acquiring the site, said Nelson. The site is currently privately owned by Dennis Beaman, according to the Sacramento County Assessor’s Office. Staff will return to the council with a proposed purchase price.

Families will be housed separately from individuals, with separate entrances and common areas. Pets will be allowed at the shelter.

The shelter will not be a walk-in shelter, only open to those who receive referrals from the city’s homeless services navigators or police officers, according to Bontrager. It’s only for people staying in Elk Grove or who have “deep ties.”

Registered sex offenders would not be allowed at the shelter, and weapons, drugs and alcohol would be banned at the site.

The shelter, located just south of Grant Line Road and east of Highway 99, is expected to open in two years, according to Bontrager. Construction is expected to begin in summer 2027, according to a city newsletter.

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