For more than a year, San Diego County officials have been pushing a controversial plan for Lemon Grove — a collection of tiny “sleeping cabins” intended to offer shelter to homeless people.
But unbeknownst to county officials, a land deal underpinning the effort skirted federal regulations — a rub in the county’s plans that is set to cost taxpayers $2 million pulled from other homelessness efforts.
The county-backed project to build dozens of small cabins faced major headwinds earlier this year after the Federal Highway Administration refused to endorse a deal between the county and the state Department of Transportation, or Caltrans, for leasing a vacant lot at the intersection of Sweetwater Road and Troy Street.
Under the original plans, the site appeared exactly what the county had been looking for, after officials retreated from similar proposals in Lakeside, Santee and Spring Valley in the face of local opposition.
In Lemon Grove, the county pressed forward anyway. The cost for the site would be negligible: The county aimed to lease it from Caltrans for $1 a month.
But in October, the county revealed that the Federal Highway Administration was insisting Caltrans sell or rent the site at market rate.
At the time, there was little information publicly available about the federal agency’s decision ...

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