On Tuesday, Chula Vista officials and developers finally put shovels in the dirt at the long-closed Palomar Motel, kicking off a conversion that will turn the dormant site into permanent supportive housing. Rebranded as Palomar Point, the former 1964 motel at 1160 Walnut Avenue is set to become roughly two dozen studio apartments paired with on-site supportive services for people experiencing homelessness. City leaders cast the start of construction as a major step in Chula Vista’s broader push to move unhoused residents into long-term housing.
The project is backed by state Homekey+ funding, part of California’s wider effort to flip motels and hotels into permanent homes. The California Department of Housing and Community Development lists an award of roughly $8.4 million for the Palomar conversion, while local reporting has pegged the Homekey+ share at about $8.61 million. City officials say those state dollars will be layered with other subsidies to pay for the renovation work and the ongoing services that will support residents once they move in.
Renovations, units and schedule
Wakeland Housing and Development Corporation has been tapped to renovate and operate Palomar Point. The nonprofit will turn existing motel rooms into independent studio apartments that include kitchenettes, upgraded flooring and fixtures, improved plumbing and electrical systems, a new roof, fire sprinklers and accessibility upgrades. The city’s plan calls for about 27 studio units in total, including one on-site manager’s unit. Construction is scheduled to wrap by November 2026, with residents expected to begin moving in in early 2027, according to the City of Chula Vista.
Who will live here and on-site support
The conversion is structured with long-term rental support built in. Program documents show the project will use project-based vouchers for roughly 20 units and will reserve seven units for veterans through the VA’s VASH program. On-site services will be led by People Assisting the Homeless (PATH), which is slated to provide individualized case management, behavioral health support, life-skills classes and connections to employment and health services. Those program details are laid out in the state’s Homekey+ award materials from the California Department of Housing and Community Development.
Operator experience and labor agreement pilot
City staff have pointed to Wakeland’s track record in supportive housing, noting what they describe as high retention rates across the organization’s portfolio. At the groundbreaking, Mayor John McCann called the Palomar Point conversion “part of the next phase of the city’s comprehensive homeless strategy.” City officials also say the project will double as a test run for Chula Vista’s new project labor agreement, with most of the construction work expected to be handled by union crews, according to The San Diego Union‑Tribune.
Where this fits in the city's broader approach
Palomar Point is the latest piece of Chula Vista’s effort to move people off the streets, following outreach teams and a non-congregate bridge shelter the city opened in Otay in 2023 to give people a short-term place to receive services while they are matched with permanent housing. The city’s homelessness strategy mixes outreach, temporary shelter and enforcement to reduce visible encampments while steering residents toward services. Voice of San Diego provides additional background on those programs.
According to city and developer officials, the overall Palomar Point price tag will be covered through a blend of Homekey+ funding, federal vouchers and local dollars. Reporting on the groundbreaking put the total project cost at about $11.4 million, with roughly $3 million coming from the city’s coffers. Full occupancy is anticipated in the opening months of 2027, which would make Palomar Point one of several recent motel conversions meant to quickly expand permanent supportive housing in the South Bay, The San Diego Union‑Tribune reported.
