After City Rejects Expansion Plan, Hotel-Based Shelter Program Seeks Path Forward

Tents along 2nd Ave. South in Seattle. JustCARE, a shelter and case management program run by the Public Defender Association, Asian Counseling and Referral Service, and several other groups, moved many from the area into hotels.

By Erica C. Barnett

The city has formally rejected a proposal by the Public Defender Association to operate a non-congregate shelter at the Executive Pacific Hotel in downtown Seattle, telling the PDA by email that the plan—negotiated over several months—was too expensive. (The city is in the process of finalizing a separate proposal, to operate a smaller shelter out of King’s Inn near South Lake Union, from the Chief Seattle Club).

In a four-line email to PDA director Lisa Daugaard, Seattle Homelessness Strategy and Investments division director Diane Salazar wrote, “Unfortunately, your proposed cost per room does not fit within our program or budget framework for enhanced shelter beds in hotels. …Based on your proposed program cost, which is out of synch with the per room cost we provided, we will not move forward with your proposal.”

Planning for a “shelter surge,” including 300 hotel rooms and 125 new enhanced shelter beds, began last fall, after deputy mayor Casey Sixkiller and city council homelessness committee chair Andrew Lewis announced a new plan to use federal Emergency Solutions Grant dollars to fund hotel-based shelters for ten months. The idea is to move hundreds of people quickly from unsheltered homelessness to hotels and into housing, mostly through temporary rapid rehousing subsidies for market-rate apartments. Providers submitted responses to a Request for Qualifications for the project last year.

The rejected PDA proposal would have expanded the successful King County-funded JustCARE program. The project has moved about 130 people, most of them chronically homeless and involved in the criminal justice system, directly from encampments in Pioneer Square and the Chinatown/International District into hotels in Seattle, where they receive behavioral health care and other services.

The program, a collaboration between the PDA,  is designed to mitigate the impacts of encampments on the two neighborhoods while “addressing the overlapping realities that, due to COVID, jail bookings need to stay low, most congregate shelters aren’t viable, and local leaders have rightly pledged to stop sweeping people camping outside from one point to the next,” Daugaard said.

The PDA’s proposal to expand JustCARE into the Executive Pacific—a hotel Mayor Jenny Durkan reportedly favors because it already has a sister hotel serving as a shelter in San Francisco—would have cost around $28,000 per room, or about $11,000 more than the $17,175 maximum the city decided on late last month.

Daugaard tells PubliCola that that figure doesn’t allow the her organization to pay people “appropriate wages for this frontline work, much less “hazard pay, COVID exposure paid leave, the need for 24/7 clinical supervision, and partnering with a 24/7 safety team to deescalate issues without calling 911.”

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According to the PDA, the city asked the agency to replicate JustCARE using federal funds, not the other way around. In an email to Diane Salazar, PDA deputy director Jesse Benet wrote, I was under the impression that the City believed in the efficacy of our model and was assured many times over by your team that it was what the City wanted to buy.”

An RFQ does not require agencies to submit a budget; the aim is to solicit proposals that meet certain terms established by the city. 

Although the city said that they were rejecting the PDA’s proposal primarily because it was too expensive, the PDA is hardly the only provider that requested more money than the city’s bare-bones budget. For example, the Downtown Emergency Service Center, whose shelter at the Red Lion in Renton Sixkiller has held up as a model for the Seattle program, requested $25,500 per unit.

DESC’s director, Daniel Malone, told PubliCola last week that the Red Lion hotel cost less per unit because it excluded expenses Seattle expects its providers to pay, such as food and utilities, and because a 230-room hotel makes possible economies of scale that are harder to achieve in smaller buildings. (Although the Executive Pacific has 155 rooms, the PDA told the city they were only comfortable serving about 60 people there, given the hotel’s downtown location, small rooms, and lack of basic amenities such gathering space, kitchens, microwaves, and laundry. The PDA proposed providing another 169 shelter beds using its existing network of hotel providers around the city).

In theory, the city’s rejection of the PDA’s proposal puts DESC’s back in the mix for the federally funded contract, although DESC’s plan was initially considered “nonresponsive” because it called for moving people from an existing DESC-run shelter into the hotel, freeing up conventional shelter beds rather than moving people directly off the streets.

The Low-Income Housing Institute also submitted a proposal, which the city may now be considering. HSD would not comment on “ongoing negotiations” and LIHI director Sharon Lee said Friday that she didn’t know the current status of LIHI’s proposal. It’s also possible that the city will offer the contract to another shelter provider that did not initially apply last year, depending on whether any of the organizations that did apply are able to meet the city’s cost cap.

The debate over costs highlights the fact that people with higher needs simply require more resources, in the form of behavioral health care, treatment, and help developing the kind of skills that enable people to maintain their housing over time. According to the PDA, 100 percent of its current JustCARE clients have a substance use disorder—typically heroin or meth addiction—and more than half of them have been homeless two years or more.

The initial county funding for JustCARE ran out on January 31. The county has agreed to continue funding the program through March, “to allow PDA to find alternate services for current clients if any are available or to identify another fund source for the program that can sustain it longer term,” according to King County Department of Human and Community services spokeswoman Sherry Hamilton. After March, Hamilton said, the PDA will either need to find another funding source or “begin planning to ramp down the program.”

The PDA has asked the city to apply for federal FEMA reimbursement to extend JustCARE, but the city has so far declined to do so. As of last month, cities can get full reimbursement from FEMA for many COVID-related expenditures.

Councilmember Lewis, who represents downtown Seattle, told PubliCola he would support FEMA funding to keep the JustCARE clients in hotels rather than evicting them onto city streets. “As bad as things are with people on the street,” Lewis said, “JustCARE has taken [130] of them off the street and is working with them, providing wraparound care, and I think that it would be horrible… to just put them back on on the street.”

So far, the mayor’s office—which serves as the gatekeeper for federal funds—has not sought FEMA dollars to extend the program past March.

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