Councilmember considers buying hotels to support PEP-V shelter and convert them to housing

A door at the end of a hotel hallway. A door hanger says "You could live here." A mat in front of the door says "Home?" A sign on the wall says "Please, no COVID-19." Another sign on the wall says "650+ people in hotels. 550+ people on waitlist." The bottom of the door is made to look like the outer facade of a hotel.

Illustration by Jeff Murray /

Ward 1 Councilmember Brianne Nadeau is calling for D.C. to purchase hotels for continued short-term use in the Pandemic Emergency Program for Vulnerable People (PEP-V) and to be converted to permanent supportive housing units for long-term use. 

This comes just as President Joe Biden signed the $1.9 trillion American Rescue Plan into law today, which directs $5 billion dollars to all states and Washington D.C. to obtain stable housing for people experiencing homelessness — including purchasing hotels to convert into permanent housing. 

A photo taken at night shows only a woman's face, dramatically lit. Her dark hair and dark coat melt into her surroundings.
Ward 1 Councilmember Brianne Nadeau attends an overnight vigil for people who died without a home the previous year. Photo by Ken Martin /

Nadeau included this investment with other proposals for the Fiscal Year 2022 budget that she said “might not be championed by others” in a Feb.17 letter to Mayor Muriel Bowser. The mayor will present her FY22 budget draft on April 22.

Non-congregate shelters, like the District’s PEP-V sites, have proven effective at preventing the spread of COVID-19. The number of positive cases among people experiencing homelessness in D.C. shelters rose rapidly at the start of the pandemic, with 169 residents contracting COVID-19 in April alone. The D.C. Department of Human Services (DHS) has not reported a single positive COVID-19 case among PEP-V residents after entering the program.

DHS introduced PEP-V on March 17, 2020, to keep people experiencing homelessness whose age or underlying medical conditions make them more vulnerable to COVID-19 out of crowded shelters. Instead, DHS provided them with hotel rooms that now have a maximum of two people per room. The city has leased three hotels to make this possible: two since the program launched in March 2020 and expanding to the third in October to help meet the need.

[Read more: As the number of people in quarantine dwindles, DHS expands its use of hotel rooms to protect the most vulnerable]

However, the program was at capacity in February 2021, serving 652 people as of Feb. 17 with another 555 eligible people on the waiting list that week, according to DHS. 

Cost was an issue for running the program last year. DHS has been relying on FEMA to reimburse just 75% of the costs of running PEP-V since March 2020. However, on Jan. 21, Biden ordered the Federal Emergency Management Administration to begin reimbursing 100% of the cost of running non-congregate shelters through Sept. 30. 

Still, despite the potential new funding, DHS Director Laura Zeilinger has not released any plans to add additional PEP-V sites. Whenever DHS partners and providers ask or advocate to open another PEP-V site, Zeilinger has stated DHS is focusing on vaccinating people in PEP-V and transferring them from PEP-V to housing. Officials from DHS also said not all costs of the program are reimbursable, such as behavioral health services, case management services and general administrative costs. The department provides these services using other funds. 

[Read more: Despite 100% FEMA reimbursement, DC says they do not plan to expand the PEP-V program] 

FEMA confirmed that these support services are not eligible for reimbursement, as they do not fall under “necessary work that lessens immediate threat to lives, public health or safety.” However, in May 2020, FEMA approved the District for the Crisis Counseling Assistance and Training Program, providing D.C. with $2.1 million to help support state-provided crisis counseling services for residents struggling with stress and anxiety as a result of the pandemic. While this program is separate from non-congregate shelter reimbursement, FEMA told Street Sense Media this funding was approved for the District’s use but could not confirm whether or not the District has utilized these funds.

Street Sense Media asked DHS if they have used the Crisis Counseling funds and if they were used to cover case management and other services for PEP-V. DHS did not initially respond. 

How long the expanded FEMA funds for non-congregate shelter will be available is also a concern. Biden’s January order included a Sept. 30 cutoff, the end of the fiscal year. 

Setting up a PEP-V site requires a lot of staffing and logistics, Zeilinger said during a Feb. 5 briefing on DHS’s response to COVID-19. “The time horizon in which we are likely to continue to be eligible [for FEMA funding] and the amount of time it takes to stand up a PEP-V program” are limiting. Zeilinger further emphasized that DHS is instead focused on supporting people who are already in PEP-V to move to permanent supportive housing and to continue administering the programs they already have.

How much money will be saved?

A repeated question that DHS’s partners and advocates for the homeless community have asked the department is how much money they may save from the additional FEMA reimbursement. In addition to covering costs through the end of September, Biden’s executive order states that the funds apply retroactively, reimbursing DHS for the initial 25% cost paid.

The D.C. Council Committee on Human Services, which Nadeau chairs, asked DHS how much the District would save due to applying the FEMA expansion retroactively.  

“The District is still processing FEMA reimbursement requests and analyzing previously reimbursed amounts to determine how much the District will save for PEP-V, ISAQ [Isolation and Quarantine], and other FEMA-eligible expenditures,” DHS said in a written response. The question was one of many submitted to DHS as a part of the standard annual performance oversight process that takes place before the next year’s budget is considered.

The committee also asked DHS how much money it would save due to the FEMA expansion moving forward, based on the 25% of costs it had planned to cover in 2021.

The department wrote that it cannot provide these numbers, as it is the Office of Contracting and Procurement (OCP) that makes purchases for the program using the city’s rainy day fund or other available funds before obtaining FEMA reimbursement, and that the city’s application for federal emergency funds are handled centrally. “DHS has not been involved in the budgeting for the match and will not be directing the use of these funds. The Office of Budget and Performance Management [OBPM] is better positioned to respond to these questions,” the department said. 

DHS told Street Sense Media that the FEMA funds go into the general District fund, rather than DHS’s budget, which the department says makes it hard to answer direct questions about the future of PEP-V funding.

The OBPM did not respond to multiple requests to clarify the question. The OCP referred Street Sense Media back to DHS to answer questions. DHS did not elaborate on why they were not able to completely answer questions about PEP-V spending. When asked about how much money had been expended on the PEP-V program thus far, DHS said Street Sense Media would have to file a Freedom of Information Act request to obtain that information — which we filed on March 10.

Data returned on March 26 in response to our request showed that the overall cost for non-congregate shelter placements from October, when the third PEP-V hotel opened, through the end of this month, has been $39,953,823. 

Less than 4% of the total cost — $1.5 million — is not reimbursable by FEMA. That amount goes toward behavioral health support and has thus far been paid for with contingency cash and Coronavirus Relief Funds. All remaining expenses are eligible for reimbursement upon FEMA review and approval, according to DHS.

The non-congregate shelter budget returned by DHS includes costs for Isolation and Quarantine (ISAQ) hotels in addition to the three used for the PEP-V program. The department does not break down the costs by individual program and many of the service contracts involved are combined across programs.

The number of ISAQ sites fluctuated within the six-month budget period. Last fall, the city reduced the quarantine program to a single hotel as need diminished. When COVID-19 cases rose again in the District after Thanksgiving, another ISAQ site opened in December.

"ISAQ / PEP-V COVID-19 Response Budget Time Period: 10/1/2020 - 3/31/2021 Item Amount Hotels ($18,600,000.00) Food ($ 1,992,000.00) Cleaning ($ 3,450,000.00) Laundry ($ 450,000.00) Transportation ($ 624,000.00) Personnel - Operations Staff ($ 4,494,348.00) Personnel - Medical Staff ($ 4,276,800.00) Personnel - Behavioral Health ($ 1,539,138.00) Security ($ 3,327,537.00) Other ($ 1,200,000.00) Total ($ 39,953,823.00) Note: Behavioral Health supports are funded via contingency cash and/or Coronavirus Relief Funds."
The spreadsheet provided in response to our March 10 FOIA request.

Capacity and conversion

The American Rescue Plan funds for investing in safe, socially distant housing will be distributed by the Department of Housing and Urban Development and will remain available until Sept. 30, 2025. In a summary of the legislation, Senate Democrats wrote that “before the pandemic, there were already an estimated 568,000 individuals and families experiencing homelessness, many of whom have underlying health challenges.”

The goal of this investment is to expand non-congregate housing to ultimately lower the spread of COVID-19 and protect the health of families and individuals either at risk of experiencing homelessness or who are currently homeless. The plan adds that ultimately, this investment will help meet the long-term goals of replacing congregate shelters with permanent housing options. This provision was included in the final version of the $1.9 trillion stimulus bill.

Amber Harding, an attorney at the Washington Legal Clinic for the Homeless, brought up PEP-V when she testified during DHS’s performance oversight hearing on March 1. She said the clinic expected DHS to expand PEP-V when FEMA first announced they would reimburse 100% of non-congregate shelter costs in December.

“That has not happened. Instead, two more people have died of COVID-19 since that announcement,” Harding said. “D.C. must expand PEP-V immediately to prevent further loss of life, and to accommodate every high-risk person experiencing homelessness.”

Wes Heppler, a board member for the Legal Clinic, has repeatedly asked DHS to consider opening a new PEP-V site since December, when FEMA first extended their reimbursement period to March 2021. It’s just a capacity issue and the need for more individual rooms, he said.

Heppler pointed out that the goal of PEP-V is to transfer its eligible residents to Permanent Supportive Housing (PSH). When residents are transferred to PSH, that creates capacity to move residents into PEP-V from the waiting list. This process has been gradual, with DHS placing roughly 15 people per month into PSH. A total of 165 people have moved from PEP-V into PSH in nearly 12 months. There is a limited number of PSH units in the District, approximately 90% of which have been occupied since December. 

While it would require significant investment for construction up front, converting current PEP-V sites into long-term housing would save the District money over time in addition to getting people into housing. PEP-V costs the government approximately $12,500 per person per month, while, in 2015, a PSH unit cost $22,500 for a whole year.

The Hotel Arboretum by Holiday Inn Express and The Fairfield Inn & Suites by Marriott Washington are located near the intersection of New York Ave. NE and Bladensburg Rd. NE.

The Fair Budget Coalition, which advocates for low-income D.C. residents’ concerns in the annual budget, also recommended buying “struggling” hotels to shelter people experiencing homelessness and converting some units into deeply affordable housing in their FY22 budget platform, published on Feb. 22. Harding, who contributed to this recommendation, says that due to COVID-19, using hotels to house people experiencing homelessness just makes sense.

“Hotels are really struggling at this point,” Harding said. “And people are struggling with the lack of affordable housing and the lack of non-congregate shelter space. It feels like a real, natural connection.”

Street Sense Media reached out to the owners of all three current PEP-V sites to ask what they thought of such an arrangement. None responded.

In a similar budget priority letter, Ward 5 Councilmember Kenyan McDuffie proposed using $140 million to purchase and convert the Washington Marriott Wardman Park, which closed earlier this year, to provide PSH units along with various levels of affordable housing.

Converting PEP-V hotels into permanent supportive housing raises some logistical challenges, said Kristy Greenwalt, director of the D.C. Interagency Council on Homelessness.

“Whether a hotel conversion [to PSH] makes sense can really only be determined on a case-by-case basis,” Greenwalt said. “Taking into consideration the specific population that is going to be served, the service needs of that population, and therefore the optimum design of the building relative to the existing floor plate of the hotel.”

A key finding in the ICH’s progress report on D.C.’s strategic plan to end homelessness was that more PSH units than expected are needed for single individuals, especially project-based developments where 24-hour onsite services can be offered.

What do PEP-V residents think?

Residents inside current PEP-V programs have mixed feelings about the proposal. Charner Snow has been staying in the PEP-V program at Hotel Arboretum since October, and she believes that these converted PSH units will only be useful for some residents.

“Some people need somebody to look after them, to make sure they’re okay,” Snow said. “Personally, I’m tryna get out, get my own space, and feel more comfortable in my space.”

Althea Thompson, who has been staying at the PEP-V program at Holiday Inn on Rhode Island Ave. NW since November, also says it could be a good idea as long as DHS wasn’t staffing the program. “I’m in a depressed moment as is,” she said.

Thompson has had repeated issues with getting DHS staff to resolve her problems while staying in PEP-V, and previously at the DHS-run Harriet Tubman Women’s Shelter. She told Street Sense Media repeatedly about staff rudeness, verbal abuse, and slow resolution of issues that affect both her current conditions in shelters and her pending case to get housed.

[Read More: PEP-V hovers around full capacity without enough housing options for vulnerable people]

“I’m not surprised by that,” Harding said, referring to multiple clients who have expressed issues with DHS staff. “Anyone who’s coming out of the shelter system and has had really bad experiences in the shelters or in PEP-V with the service staff, it’s totally understandable to me that they don’t want to continue that forever.”

However, people living in PSH usually do not engage with DHS but with a third-party service provider, according to Harding. So Thompson and any residents who shared her sentiments would not have to continue talking to DHS staff to resolve ongoing issues if the location was converted to PSH.

Whether Bowser’s proposed FY22 budget includes funding for the priorities outlined in Nadeau’s letter or not, the D.C. Council will spend the month after its release reviewing, editing, and voting on the final budget before resubmitting it for Bowser’s approval or veto. If the measures to expand PEP-V and convert the hotels to PSH come to be, it will be up to Bowser’s administration to implement that plan. 

Changes to PEP-V or PSH are a long way off. But for advocates like Harding, this proposal represents a new vision of what those programs might look like in the future.

“I think the idea is that it would just look like an apartment building,” Harding said, imagining the hotels after being converted to PSH. “They would be renovated, and they would be nice, and they would be all over the city, they wouldn’t all be out on New York Avenue.”

On March 19, Harding’s organization published an online letter-writing campaign calling for expansion of the PEP-V program. More than 400 people have participated thus far. 

On March 26, Nadeau sent a letter to Mayor Bowser asking that her administration “take full advantage” of federal funds to “expand” non-congregate shelter capacity in the PEP-V program. All but two members of D.C. Council co-signed the letter. Council Chair Phil Mendelson and Ward 8 Councilmember Trayon White did not. 

Updated data cited in the letter shows that the number of people on the waiting list for PEP-V is now equal to the number of people served by the program. Thirty-five percent of those waiting are in shelters and 38% are unsheltered. Nadeau and her fellow councilmembers raise concerns that the waitlist will only grow as seasonal hypothermia shelters close. The District’s designated hypothermia season ends on March 31. They say this could overwhelm the low-barrier shelter system, further reducing the ability of people in congregate shelters to socially distance and increasing the number of unsheltered residents — increasing the risk of COVID-19 community spread on both fronts.

The District’s residents cannot wait any longer for action. We know that FEMA will reimburse 100% of the eligible PEP-V costs,” the letter says. “We also know that the District is reducing the capacity of its Isolation and Quarantine (ISAQ) program as the need for it diminishes, which means that the 130+ room Hampton Inn motel should be available to be repurposed for PEP-V. While PEP-V locations are service rich and require a lot of staffing, the decommissioning of ISAQ and the seasonal hypothermia shelters should allow for some staffing resources to be redirected for at least one additional PEP-V location.”

The councilmembers acknowledge that federal funding for PEP-V will eventually end and note the American Rescue Plan funds for creating new housing capacity that are described in this article, as well as other funding in the legislation for additional housing vouchers and supportive services.

“At the local level, we will need to make major investments in housing subsidies and vouchers as well as continuing to do the work of improving the efficiency and efficacy of the matching and lease up process for these programs,” the councilmembers say.

Mayor Bowser will release her proposed budget for the next fiscal year, where such long-term investments would need to be included, on April 22 for D.C. Council to review and edit. The FEMA emergency funds to expand PEP-V are available immediately.

Update (03.30.2021)

Responses from DHS to our clarifying questions about the non-congregate shelter budget spreadsheet have been added. The month in which the second ISAQ site was opened has been changed as well, based on the FOIA response instead of the PowerPoint for DHS’s Feb. 5 briefing. The Hampton Inn ISAQ site opened in December, not January.

Update (03.29.2021)

Information returned from a Freedom of Information Act request was added, along with details about advocacy efforts taken by activists and councilmembers after publication.

Update (03.12.2021)

Several statements initially included in this article have been removed due to a misunderstanding with the source.

Issues |COVID-19|Housing|Permanent Supportive Housing

Region |Washington DC

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