FEMA still owes SF millions of dollars for unhoused hotel expenses and more during COVID-19 pandemic
SAN FRANCISCO (KGO) -- It's August 2025 and the COVID-19 pandemic is long gone, except for that big bill left over for housing the homeless community.
Let's unclog your memory.
In April 2020, homeless advocates demanded that people living in shelters and on the streets be moved into hotels and given private rooms.
"It makes sense to put people in hotel rooms now," declared Jennifer Friedenbach or the Coalition on Homelessness back in 2020.
ABC7 news was a mong the first to visit one of these hotels occupied, back then, by unhoused people.
The city agreed that it was a way to try to stop the spread of COVID.
MORE: EXCLUSIVE: Inside look at former San Francisco tourist hotel turned into homeless shelter
Except that, for those with a drug addiction, there seemed to be little concern with social distancing.
"As I have photos in my book on the Tenderloin, at Turk and Hyde the drug dealers and the drug users, they were next door and they would hang out with each other with one foot away," recalled Randy Shaw, the director of the Tenderloin Housing Clinic who saw first hand how in many of these hotels, people were practically left unattended in these hotels.
San Francisco saw a dramatic increase in the number of unintentional overdose deaths in 2020, more than the previous two years combined.
"And it created the biggest drug crisis San Francisco has ever had and we still haven't recovered from it. In the hotels there were no restrictions so it was ridiculous and the city spent millions," emphasized Shaw.
Coronavirus: San Francisco renting hotel rooms to house homeless, first responders, vulnerable
And $409 million to house more than 3,300 people in 25 hotels across the city, according to the City Attorney's Office. The program ended in December 2022 and FEMA which is meant to respond to these kinds of emergencies promised to reimburse San Francisco.
But in October 2023, in a letter, FEMA unexpectedly told every city in California that because the first dose of the COVID vaccine had been given by June 2021, to reduce the spread of the virus, some reimbursements after that date would not be honored.
San Francisco's City Attorney, David Chiu insisted that FEMA never told the city ahead of time that they were being cut off from receiving funds.
"We were surprised to have received that letter. We had thought and hoped that it was a misunderstanding because during the time period when we were providing that non congregate shelter we were under the very clear understanding that we were doing this work with the support of the federal government and that we would be reimbursed 100 percent," said Chiu.
There were other COVID related expenses that added another $80 million to the city's costs.
And let's not forget that San Francisco had already spent millions in settlements to hotels that were damaged.
"For the shelter-in-place program, damage costs alone ended up exceeding $60 million," revealed San Francisco Supervisor Matt Dorsey in March 2025.
The Hotel Whitcomb on Market street received the most money, $19.5 million in a settlement. The hotel with 400 rooms has never reopened.
MORE: They emerged during COVID pandemic. What's next for SF's lifesaving hotels turned homeless shelters?
So, where does San Francisco stand in its attempt to recover that money?
Under the Biden administration San Francisco was reimbursed $148 million with the expectation that the rest would come later.
"FEMA has been a very big disappointment, they cost a tremendous amount of money," said President Trump in June when he announced that his administration was considering getting rid of FEMA.
MORE: Trump says he plans to phase out FEMA after 2025 hurricane season
FEMA, under the Trump administration is now telling San Francisco, the city was really only eligible to receive $7 million.
In fact, they are now suggesting that most of the reimbursement made by the Biden administration should be returned.
Congressional leaders from California have signed a letter asking FEMA to reimburse cities.
We contacted FEMA's Regional 9 office which covers San Francisco, but after eight days, we got tired of waiting for a response.
That office is located at 1111 Broadway in Oakland on the 12th floor.
We went in person, but were stopped by security.
Security Guard: "This is not open for the public, ma'am."
Lyanne: "Why?"
Security Guard: "It's not open...I can't answer any of those questions."
Lyanne: "But it's a government agency."
Security Guard: "Call that number that is there and ask them all those questions."
Lyanne: "So you're not letting us go upstairs?"
For now, San Francisco is following protocol by going through the FEMA appeal's process.
"Our hope is that we can work things out but if not, we'll be forced to look at all legal options.
Chiu did not rule out the possibility of suing the federal government in an attempt to recover some of the money owed.
"We'll see what happens," said Chiu.
Mayor Daniel Lurie has been cautious when criticizing President Trump in the past, even though, the money San Francisco is owed could have covered a big chunk of the city's $800 million budget deficit.
Randy Shaw doesn't believe San Francisco will ever see that money.
"If the Biden administration wasn't going to fund San Francisco's FEMA debt, why do they think the Trump administration will? asked Shaw.
