A local nonprofit’s proposal for an affordable housing project on University Avenue was dealt a major blow Tuesday night despite last ditch appeals from supporters urging the Riverside City Council to reconsider.
Despite supporters’ efforts, the council voted 4-3 to reject a $20.1 million state grant and decided against using $9.5 million in federal and state grant funding to convert the Quality Inn Motel into apartments for low income and homeless residents.
Council members Philip Falcone, Chuck Conder, Sean Mill and Steven Robillard voted against. Council members Clarissa Cervantes, Jim Perry and Steve Hemenway voted in favor.
“A centerpiece of my campaign has always been that the housing-first model is a failure, and it continues to be a failure,” Mill said at the January 13 meeting. “I’ve always asked that we go toward a transitional-housing model that has an accountability base in there.”
The Riverside Housing Development Corporation (RHDC) first asked the city last year to jointly apply for a California Department of Housing and Community Development’s Homekey+ grant, part of a $1.1 billion statewide initiative narrowly approved by taxpayers in 2024.
RHDC first pitched the idea to city staff in February, according to the report, and envisioned remodeling 114 hotel rooms into studio apartments prioritizing low income residents and people exiting homelessness. A final proposal was presented to the council last May.
“This is a one-time funding opportunity from the state to address the need for permanent supportive housing,” Michelle Davis, the city’s Housing and Human Services director, said at the May 20 meeting. “It is uncertain if, and when, such another funding opportunity like this will come around.”
The council voted 4-3 to approve the application, after a lengthy debate between its members which required Mayor Patricia Lock Dawson to cast the tiebreaking vote. Councilmember Chuck Conder was absent.
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Falcone did not comment at yesterday’s meeting. However, during the last year’s meeting, he said he felt frustrated with how quickly the project had moved forward through city council while other city-owned properties that could be designated as affordable housing projects were stuck in limbo. The speed, he added, left out local business owners from the initial discussions.
“There’s too much disingenuous things happening with this project for me to support it,” Falcone said at the time.
Months later, in November, the state awarded the project — called University Terrace Homes — $20.1 million in grant funding that the council would need to formally accept before the project could move forward.
The council also had to decide whether to use federal and state grants it had already received for homelessness initiatives to fully fund the estimated renovation cost.
Residents packed city hall to speak both in favor and against the project. Dawson said there were nearly 60 requests to speak in-person and more than 100 online comments.
Those in opposition said they were concerned the project would negate decades of painstaking work to revitalize the neighborhood, citing the recent opening of the Farm House Collective as a main economic driver for the transformation.
The Bailey family, the owners of the collective, said they were not against affordable housing but felt that the city would go against the long-term vision that convinced them to invest in the neighborhood.
“I’m very proud of them, because I know that was hard and they’ve had to live with this,” Beverly Bailey told The Riverside Record after the meeting. “They stood [their] ground, and they were for the vision of our community and the best of it.”
Others felt the project should not be near the University of California, Riverside, stating that the potential for an increase in crime would drive students away.
According to the California Housing Partnership Corporation, a private nonprofit organization dedicated to helping government and nonprofit housing agencies, there is no clear link between affordable housing and crime.
A representative for the Quality Inn Motel employees also spoke out against the project during the meeting, saying that it would result in about 20 workers losing their jobs.
Bruce Kulpa, RHDC’s chief executive officer, pushed back against the opposition’s claims. In response to safety concerns, he said the nonprofit had planned to build a gated community with 24-hour security and six full-time, onsite case managers.
“We manage with zero tolerance for disruptive behavior,” Kulpa told the council. “If there’s an issue with a tenant’s behavior, they’ll be warned, in counsel, that they’re jeopardizing their continued occupancy at the property. If any disruptive behavior continues, they’ll ultimately be evicted, and that’s a standard operating procedure at all of our properties.”
Proponents for the project also felt the project would help the area’s revitalization by getting unhoused people into homes and off the streets, adding that it would reduce the building’s already high crime-rate, help with drug rehabilitation and bring an increase of retail spending for area businesses.
Ultimately, a majority of the councilmembers remained unconvinced, with Robillard saying he fundamentally disagreed that supportive housing was the best solution for what is a regional problem.
“If the need were as urgent as described, we would not be seeing service acceptance rates hovering around 5%,” Robillard said. “That tells you the challenge is not simply the number of units; it’s engagement, accountability and whether this model is delivering the outcomes we want.”
Mill agreed with the sentiment, and cited the lack of preconditions for receiving housing such as sobriety, participation in drug rehabilitation treatment or compliance in mental health programs.
The Housing First model, which gets people into housing first and then provides supportive services, has been required for all state-funded housing programs since 2016 when Senate Bill 1380 was signed into law. The city’s own Housing First Strategy Plan, adopted in 2018, noted that this approach increases housing stability, improves quality of life and is more cost-effective than traditional programs with higher barriers to entry.
After the meeting, Cervantes said she was heartbroken by the council’s decision.
“We have people that want this, and they are now going to have to wait,” she said. “To say no to $21 million is honestly unbelievable.”
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I am sharing a comment concerning the $20 million grant that was approved for the city of Riverside to provide affordable housing for its homeless residents, but the city council now has rejected the proposal. My opinion is that there are too many situations along with many issues that this housing movement would cause. First, to house homeless people who don’t have a penny to their name, how would they be able to pay rent? The money for the upkeep of the property has to come from somewhere, this is not a free ride. We won’t allow taxpayers to support this cause, because it is a long lasting deal that will never end. The homeless residents will feel the need to do nothing as far as working, getting an education, improving their life style, and to become self sufficient. This matter will bring along negative activity to the city. Please, no more drugs, and drug deals, loitering, pan handling, paraphernalia, stolen shopping carts, trash, and recyclables littering the streets. The city of Riverside wants improvements not diminishment. Now if the issue were to house low income residents, that would bring some support into the system, because now rent would be paid by each resident that could help maintain the property and pay for some services and management. Some members of the council are not seeing the big picture. There are already businesses around the hotel that are complaining about how the area would change for the worse. If people weren’t so dirty and cared about being clean, respectful, and helpful, show that they are more responsible by expression of dignity, then there would be some sort of mercy to give. But as things are now, not a chance. We have a long long way to go before gaining trust and opening doors to the homeless. We can decide whether to waste the funds are take the chances that we cannot foresee.
Thank you foruu you put comment! This would have impacted UCR greatly. Cervantes is not a deep thinker , in my opinion . Housing first is not the program to help individuals with drug and mental health issues. Check out UTAH, Colorado and the press Enterprise article in Feb 2016.
University Terrace Isn’t a Win. It’s a Liability.
By Mark Elliott, Ward 1 Resident
As a resident of the University Avenue corridor and someone in contact with dozens of affected businesses and neighbors, I feel a responsibility to speak plainly about the University Terrace project. The public deserves more than emotional appeals and selective framing. We deserve the full picture.
We’ve been told that opposing this project is heartless. That we’re rejecting $20 million in “free money.” That Housing First is working. That this is about veterans and seniors. But none of that holds up under scrutiny.
This isn’t just a disagreement about values. It’s a disagreement about facts.
Misrepresentation. This project is not veteran housing. It is not senior housing. The language is clear. And yet, that is how it has been marketed—to new speakers, to the public, and to this Council. Even the official report leaned heavily on emotional framing while sidestepping the project’s structural flaws. That is not transparency. That is narrative control.
Outsider Advocacy. Of the 30‑plus speakers who came to support reconsideration, only one was from the University Corridor. A few others may have been from Wards 1 and 2, but not from the area directly impacted by this project. Many were tenants of the nonprofit developer, an entity that stands to gain a debt‑free asset with no capital investment, no long‑term risk, and no obligation to house veterans, seniors, or maintain sobriety standards. Others appeared to be part of the same group that routinely shows up to push through Councilmember Cervantes’ projects, regardless of neighborhood impact. Let’s be clear: RHDC is the only party guaranteed to benefit from this deal. Everyone else is left holding the risk.
The University Corridor already carries 2.5 times the density of city‑assisted affordable and supportive housing found anywhere else in Riverside. No other neighborhood has been asked to absorb this level of concentration.
Financial Liability. We’re told the city turned down $20 million. But that money came with strings—a 55‑year obligation and no city ownership. And to make it work, the City itself committed over $9 million in local funds. That is not free money. That is a long‑term liability, underwritten by the public, for a project the public doesn’t control.
Optional Services, No Recovery Path. We’re told this project includes wraparound services. But participation is optional. Sobriety is optional. Treatment is optional. So what is the incentive to change? There isn’t one. We are not solving the crisis. We are subsidizing it.
This isn’t about being anti‑housing. It’s about being pro‑accountability. Pro‑transparency. Pro‑community. And right now, this project is none of those things.
I have documented the University Avenue project since its inception.