Santa Cruz and Santa Clara counties will receive a combined $23 million to convert hotels into permanent housing units for homeless residents, the governor's office announced Wednesday.

Santa Clara County will receive $16.7 million to support the county's purchase and conversion of the Crestview Hotel in Mountain View into 48 housing units, according to Gov. Gavin Newsom's office.

The housing units will serve chronically homeless residents as well as homeless youth and young people at risk of becoming homeless. The county has already approved spending roughly $23 million on the project in addition to the state funding.

The combined funding means the Mountain View apartment units will cost approximately $827,000 each.

Santa Cruz County is expected to receive $6.4 million to buy and convert a motel into 20 permanent housing units, according to state officials.

Once completed, the Santa Cruz complex will serve chronically homeless residents as well as military veterans who are at risk of homelessness. The rent for each unit will be capped at 30 percent of the county's Area Median Income, which was $77,000 for a person living alone in 2020.

Both grants and projects are part of the state's Homekey program, which the state launched in 2020 in an effort to expand housing access through the conversion of vacant hotels, motels and other buildings into both permanent and transitional housing units.

The state has awarded more than $1.3 billion in Homekey grant funding across the state since launching the program. Those funds have supported the creation of nearly 8,000 housing units, according to state officials, including hundreds in the Bay Area.

“Homekey funding announced this week will provide support to communities throughout California - from our foothill and coastal areas, through the state's central valley and southern cities, these awards will make a huge difference in the lives of Californians in need of a hand up,” Newsom said in a statement.