Sacramento County’s largest homeless shelter faces rising costs and delays

In 2022, the Sacramento County Board of Supervisors approved the purchase of a former big-box warehouse store in North Highlands with plans to convert it into one of the largest homeless shelters on the West Coast.

It’s been nearly four years since and the shelter is still not finished. The plan was to convert the former Price Club warehouse by the end of last year, but the county says the project's opening date has not yet been decided. It could also go over budget.

Sacramento County spokesperson Janna Haynes pointed to a mix of challenges that are slowing the build. She said the county has faced supply chain issues for tiny homes and unexpected problems with the building itself.

“The longer things take, the prices go up,” Haynes added. “Obviously, we're having a lot of price issues in general and so that causes [an] increase in construction costs, and we understand that people are extremely frustrated.”

The site now sits as an empty shell. A massive warehouse sits on the land as construction crews move in and out to repair damage and prepare the space for the installation of tiny homes and services.

The 13-acre property is near the Sacramento McClellan Airport. In October 2022, the county approved spending about $23 million to buy the site, the warehouse and its surrounding land. Much of it was funded with federal pandemic relief money. 

Once completed, the shelter is expected to serve around 350 people at a time. It will provide a mix of tiny homes, indoor beds and safe parking for people living in their vehicles. Residents will be connected with on-site support services like mental health care, case management and help finding permanent housing, according to the county

Sacramento County Supervisor Patrick Kennedy said the project is modeled after large-scale shelter campuses in Texas, designed to bring beds, services and support together in one place.

“That service center is going to serve the entire county population, not just those people on that site,” he said. “So I think it’s going to be a model for the country.”

He said the goal is to move beyond simply providing shelter. The design, he added, is meant to help stabilize people and get them into recovery. 

“It’s an exciting project because not only is it going to provide 250 beds in villages of tiny homes, but also within the building itself is going to be a full-service center for homeless services,”  Kennedy said.

The county said the site’s size and proximity to existing encampments make it an ideal location and opportunity to build a resource where it is actually needed.

Construction continues at the Watt Avenue shelter site in North Highlands on May 4, 2026. County officials say the project is not currently over budget but could exceed initial estimates.Tony Rodriguez/CapRadio

The total project is now expected to cost more than $60 million, though the county said it is not currently over budget. Officials said the project could end up about $1 million over initial estimates, adding they won’t know for sure until construction is complete.

The county is also still waiting for a key piece of the project. Haynes said the tiny homes themselves are late arriving and being installed, making it harder to set a final timeline.

Niki Jones with the Sacramento Regional Coalition to End Homelessness said large investments in temporary shelters, like on Watt Avenue, often fail to address the root cause of homelessness. She said shelter doesn’t solve access to long-term housing.

“When we’re spending this much money on an emergency shelter Band-Aid, we don’t have any actual [long-term] housing on the other end of it for people,” Jones said.

She added that the region’s shelter system remains overwhelmed with hundreds and sometimes thousands of people who are regularly on waitlists for temporary shelter.

“I'm not saying we don't sometimes need Band-Aids, but I'm saying that when the county … is looking at the public health crisis of homelessness and not answering it with actual housing, but with continual emergency shelter … we're not meeting this problem with the urgency,” Jones said.