CalOptima Considers Building Homeless Housing

CalOptima board members conduct business during a meeting Thursday, Sept. 7, 2017. JEFF ANTENORE, Voice of OC Contributing Photographer

Officials at CalOptima, Orange County’s health plan for the low income and elderly, are considering plans to use the property surrounding the agency’s headquarters to build a mixed-use development that includes affordable housing and permanent supportive housing for homeless individuals.

CalOptima purchased the property in Orange, 505 City Parkway West, that includes its headquarters in 2011. Officials originally planned to develop the remaining 5.7 acres surrounding the office building into a parking structure and new office space.

The agency’s enrollment – and staffing – has grown as more people become insured under the Affordable Care Act, prompting discussions about a need for more parking and office space.

But uncertainty in Washington D.C. – including discussions in Congress to repeal aspects of the Affordable Care Act, known as ObamaCare – has fueled concerns among CalOptima officials that developments in Congress could hurt the agency’s enrollment and staffing.

“Given what’s happening in Washington, D.C. and Medicaid expansion payments, it’s unlikely we’ll be able to use the (additional) office space,” said board Chair Paul Yost, who is an anesthesiologist. “We have 235,000 members that have health insurance as a result of the Medicaid expansion.”

Now board member Lisa Bartlett, a county supervisor, is proposing the agency turn its remaining property into a mixed-use development with affordable housing and permanent supportive housing for the homeless.

“As a local health plan, it is within CalOptima’s interests in being part of the solution to house the homeless since mounting evidence shows that the provision of stable housing leads to improved health outcomes and reduced costs of care,” wrote Bartlett in a Dec. 5 letter to her CalOptima board colleagues.

Bartlett pointed to statistics that medical costs for homeless people are reduced when they are placed in permanent housing with support services.

“The average cost of healthcare services for the chronically homeless on the street was $98,000 a year versus $26,158 for the chronically homeless who have housing with supportive services,” wrote Bartlett. “I think you will agree that this difference in cost is staggering.”

Bartlett proposed pursuing a public-private partnership to fund the development and offered to have the county’s real estate staff help write a bid, known as a request for information, to developers.

Although the property already is zoned for a mixed-use development, CalOptima will need approval from the city of Orange to extend its development rights beyond 2020. They will also need to change the existing development agreement, which currently allows for a second office building and parking structure.

Parking also remains a concern for the agency, which is short at least 250 parking spaces, according to staff. Many staff resort to parking in lots for the nearby shopping mall, the Outlets at Orange, and sometimes receive warnings or tickets.

Other board members were generally supportive of Bartlett’s proposal, although several raised concerns about timing and how such a development fits into the agency’s mission.

“I think the board is still thinking in conceptual terms about what would be the best interests of the members and community. There’s some differing opinions. We’re in the health business, not real estate business,” said Yost.

Chief Counsel Gary Crockett noted much of the agency’s funding comes from Medicaid and use of those federal tax funds are restricted.

Some board members said discussing a bid is premature and the board needs more information first.

“The most we can talk about is for staff to go back to the city, get the development agreement, and then do an RFI [request for information] again, but this time expanding the scope,” said board member and county Supervisor Andrew Do.

The board voted unanimously to pursue an extension of its development agreement with the city of Orange and begin working with county staff on creating a request for information.

Board member Lee Penrose, chief operating officer for acute care services for the Providence St. Joseph hospitals, said such a move by CalOptima could inspire developers to build more affordable housing.

“Wow, boy would something like that fit with our mission in a good way,” said Penrose. “I don’t know how many units we could create, how many lives we could save, how much that would save in terms of cost of healthcare…but it sure would send a message and maybe spark other development opportunities across the county.”

Contact Thy Vo at or follow her on Twitter @thyanhvo.

  • JaneDoe

    This homeless housing issue is tied in with the millions of dollars that are up for play as a result of the Medi-Cal Waiver and the Affordable Care Act. There’s lots of government dollars available now as a result of these waivers and the “non-profit” healthcare executives that have taken over the CalOptima Board are very good at sucking up our tax dollars due to their extensive experience. One of the Medical 2020 Demonstration Projects is called “Whole Person Care” and has to do with providing housing and services to this population. You have to understand that even though they make it look like they just came up with this idea, the fact is that these projects have been in the works for years; lobbyists already got the state of California to ask CMS for approval and it has already been given, and these guys probably already know which of their friends will be getting those contracts. We’re just finding out about it now because we’re not in the loop. Just like we’re just finding out now how they’ve decided to to re-organize the healthcare delivery system for the poor in Orange County, shifting patients away from the private sector and into Federally Qualified Health Centers, which receive higher levels of public funding and cost us more, and placing UCI, in control of the whole thing. It makes sense because everybody knows that at a time when care is increasingly being delivered in the outpatient setting instead of in the hospital, if you really want to save money, the thing to do is to put a university hospital that values research and technology in charge of the whole thing!

  • verifiedsane

    This is just more politicization of a very complex social issue that only further serves a failing bureaucratic behemoth. This short sighted proposal isn’t about serving the poor/elderly or creating viable solutions. It’s about a power & money grab by a foundering government agency facing deep cuts as Obama-care rides off into the sunset of another expensive government failing & boondoggle. The questionable statistical gamesmanship and numbers being used in this reporting are are pure fantasy at worst, and deeply suspect at best.

    Government doesn’t want to actually address core issues involved here or create solutions; they want to perpetuate the problem by continuing to milk this political cow on the backs of tax payers and citizens for ever more. Welcome to the government created permanent slave under class living under the selective thumbs of their bureaucratic masters. Ironic that they would frame this additional folly as some sort of progress?

  • LFOldTimer

    “The average cost of healthcare services for the chronically homeless on the street was $98,000 a year versus $26,158 for the chronically homeless who have housing with supportive services,” wrote Bartlett.”

    I want to see a breakdown of those costs. Otherwise I consider it just more fake news.

    There are about 5,000 homeless in OC. A few more homes solves nothing. Just building homes for the homeless will only attract more homeless into the county from neighboring counties and states. And the new arrivals will replace and exceed the ones who obtained free housing. And they’ll go on the wait list for a house of their own. In the meantime they’ll pitch a tent next to the river bed. So the new homes won’t mitigate the homeless problem. It’ll exacerbate it! But county executives specialize at putting a band-aid on a gaping wound for political expedience. They’ll tell you “See, what what we’ve done… homes for 200 homeless”. But they won’t tell you that their actions attracted 2,000 more homeless into the county!!! lol.

    As I’ve said over and over and over and over again…..until our elected leaders attack the REASONS for homelessness NOTHING CHANGES – it only gets worse. Giving people free homes never solved anything. Give them mental health care …… give them employment – by creating something similar to the CCC public work relief program that was so successful during the Great Depression. Build barracks style living arrangements where those who participate in the work relief program have a place to eat, shower, sleep and learn new skills to become productive citizens. Drug or alcohol violations result in immediate expulsion from the shelter. Come on. This is not that hard to figure out.

    Those homeless who refuse help get nothing. All society can do is offer an outreached helping hand. If they reject it – there’s nothing more we can do. And that’s the truth.

  • Renoira

    This is a much needed discussion, and something needs to be done soon as we approach the winter season. Yet it is amazing to me, that in the midst of concerns for the homeless, the foreclosure situation is still not properly addressed. As hundreds of people lose their homes to criminal activities, the criminals who run this nation are not prosecuted and the people are told it is a ‘civil’ matter.

    At this point there cannot still be a question of all the illegalities that have been allowed to continue removing citizens from their homes using the non-judicial schematic, raising the price of housing and rentals and sticking our heads into the sand as to how it is being done.

    We had warning after warning at the beginning of this crisis that homelessness and poverty would be the result, and still our leaders ignored the cries of help of the people.

    I sat in on a meeting of Keep Your Homes California, where not one banker or leader there could admit they had seen any loans modified. Not one. All over the country county recorders offices admit their files are fatally flawed…..and still, no one is charged and now we look to the charitable hearts of these same ‘bankers’ and ‘servicers’ to help us house the homeless.

    Yes, it’s a good cause. Yes, it is needed. But when will we get to the root?