A controversial plan to create dozens of small cabins in Lemon Grove for homeless people has been upended because the federal government has forced a change to the project that could both delay construction and add millions of dollars to the price tag.
The 60 tiny homes, known as the Troy Street cabins, are to be on land owned by the California Department of Transportation, and Caltrans had agreed to lease the property to San Diego County. The project was at one time expected to open next year.
Yet the Federal Highway Administration recently stepped in to block the lease, according to county records. If county leaders still want to install the cabins, it appears they’ll have to buy the land outright for about $2 million.
“This is out of our control,” Supervisor Monica Montgomery Steppe, who’s long pushed for the project, said Thursday in an interview.
Leasing property for use as an emergency shelter is not new in California. Caltrans has done it repeatedly, and the county originally planned to get access to the land for just $1 a month, according to spokesperson Tim McClain.
It’s not clear why the Lemon Grove case is different. Representatives for the highway administration did not immediately respond to a request for comment and Caltrans officials weren’t available to weigh in Thursday. The highway administration had the authority to intervene because Caltrans used federal grant funding to buy the property, officials said.
Nonetheless, Montgomery Steppe was optimistic that the county could find the $2 million and open the cabins by 2027. “We are just trying to do the best we can to make it through this time,” the supervisor added.
The change is the latest obstacle in a years-long effort to expand shelter options in East County, where there are limited services for the estimated hundreds of people who sleep outside each night.
County officials have at different times proposed building cabins in Lakeside, Santee and Spring Valley. In each case, leaders backed down after neighbors objected. Supervisors then pivoted to Lemon Grove and downsized the scope of the proposal, which originally included 150 tiny homes. Still, the project has also been decried by many Lemon Grove residents, some of whom are even trying to recall that city’s mayor, Alysson Snow, in the wake of her vocal support for the effort.
Snow said the blocked lease had already delayed construction, but she, too, believed this “wrinkle” could be overcome. “The crisis is real,” Snow said.
The Board of Supervisors is scheduled this coming Tuesday to discuss buying the land at 2800 Sweetwater Road.
Officials have estimated that installing the Troy Street cabins should cost about $11.1 million. The county would then annually need around $3 million to pay for on-site services like security, meals and case management.
Originally Published: October 16, 2025 at 5:56 PM PDT