By Erica C. Barnett

Up to 250 people experiencing homelessness who have been living in hotels around the region could be back on the streets in the next few days now that funding for the hotels, provided through a one-year federal grant to a group of homeless and formerly homeless advocates called the Lived Experience Coalition, has abruptly run out. The people at risk of eviction include both individuals and families, and most have no housing plan in place.

Ordinarily, the LEC is not a housing or shelter provider; its primary role is advocating for policy solutions to homelessness and ensuring that people who’ve experienced homelessness have a seat at the table when policy decisions are made.

Last year, though, the LEC received a series of federal grants, including a $1 million, one-year grant to rent hotel rooms from FEMA’s Emergency Food and Shelter Program and another $330,000 to program to connect hotel residents to employment. The LEC signed an agreement with the nonprofit Building Changes to serve as its fiscal sponsor—a pass-through agency that distributes funds for new or grassroots organizations.

Over the past year, but particularly between January and March of this year, the LEC moved hundreds of people into hotel rooms funded by the federal grant. By March, cash flow was dire. As of early April, the estimated gap between the funding the LEC had on hand and what it owes various hotels totals more than $700,000, and the shortfall is ballooning at a rate of about $1.1 million a month, according to several sources familiar with the situation.

“We’ve been notifying [the LEC] about the cash issues for a year,” Building Changes executive director Daniel Zavala said. “We shared [concerns] on several occasions throughout 2022, and really in December of this last year we were more formally flagging some of the cash flow issues.”

In emails and memos obtained by PubliCola, the LEC denied this, and said Building Changes failed to provide them with information about their cash flow when they requested it.

“For a very long time, we were operating blindly which caused us to spend $370,000 more than the grant we were awarded,” LEC director LaMont Green wrote in an email detailing LEC’s grievances with Building Changes. “We consistently asked for the financial reports but to no avail. Building Changes made us aware of this gross overspend less than 2 months before year end. … Additionally, when LEC received financial reporting it was often inaccurate.”

Zavala, from Building Changes, disputes this account. “We provided financial information on numerous occasions to the LEC over the last year,” Zavala said. “We’re here because the LEC mismanaged its finances.”

 

But the crisis isn’t just about a single organization falling into arrears.

The King County Regional Homelessness Authority, which oversees the region’s response to homelessness, also used the LEC hotel rooms to move people off the streets of downtown Seattle as part of a public-private partnership aimed at ending unsheltered homelessness downtown, called Partnership for Zero.

The organization that runs Partnership for Zero, another nonprofit called We Are In, initially floated the idea of using $1 million of the remaining program funds to get the LEC out of arrears—and keep the hundreds of people living in the hotels from falling back into unsheltered homelessness.

As of two weeks ago, according to emails, We Are In planned to use $1 million of the $10 million it pledged for Partnership for Zero to pay for the hotels. “We will be allocating $1M of the remaining partnership for zero funds at KCRHA to the outstanding LEC hotel invoices,” We Are In director Felicia Salcedo wrote to Zavala on March 30.

Taking these funds out of Partnership for Zero, Dones responded in the same email thread, would “cause the KCRHA to pause hiring as these funds were obligated to support staffing. My team estimates that this will reduce the overall housing capacity of the project by at least 1/3 if not more.”

On Monday, We Are In spokesman Erik Houser said the organization ended up using $1 million of its own funds, separate from the Partnership for Zero, to pay the LEC’s outstanding invoices for the hotels. That money ran out on Friday, and Houser said it’s now up to “other partners,” including government funders, to address the problem.

A spokeswoman for the KCRHA said Monday that “together with public and private partners, we have been working to identify possible solutions.”

 

Last week, a frenzy of finger-pointing almost overshadowed the imminent human crisis.

In one email exchange with LEC director Green’s requests for help coordinating shelter or housing for people living in the hotels, for example, KCRHA CEO Marc Dones wrote, “As I have stated repeatedly this is not a kcrha program and funding decisions are not being made by kcrha staff. …  I am unclear how else to be of assistance.” It was a comment Dones would echo repeatedly throughout the week, and not without justification—the KCRHA was not involved in the original FEMA grant and played no part in the LEC’s partnership with Building Changes.

But the KCRHA was aware of the program. In fact, the agency’s own system advocates—outreach workers who connect people living unsheltered downtown to shelter and housing—were using the LEC hotel rooms to shelter people living downtown. Starting late last year, KCRHA staff utilized LEC-funded hotel rooms to shelter at least 90 people living in downtown Seattle, something PubliCola first reported back in February. According to an email Green sent to a group of agency and nonprofit partners last week, Green told Dones about the program in April 2022.

Green did not respond to a request for comment (in general, the LEC makes decisions and statements collectively) and the KCRHA declined to speak with PubliCola about the timeline. However, a KCRHA spokeswoman did confirm that of about 30 of the people KCRHA staffers moved into hotels through the LEC program were still in the hotels last week. The spokeswoman said all 30 were either moving into permanent housing or had housing plans in place.

Last week, with accusations flying between the LEC, Building Changes, and the KCRHA, Building Changes announced it was pulling its fiscal sponsorship from the LEC, which will be unable to receive or distribute funds until it obtains its own nonprofit status. The LEC sent a letter to Building Changes saying it would create “cruel and unusual duress” for Building Changes to drop its sponsorship without an exit strategy, but the decision appears final. “I can confirm that we have terminated our business relationship with the Lived Experience Coalition,” Zavala said.

Building Changes is also the fiscal sponsor for We Are In, which has pledged $10 million to the KCRHA for its Partnership for Zero work. That effort, which the KCRHA initially hoped to wrap up within a year, is behind schedule, in part, because landlords have been reluctant to rent to people with one-year subsidies without knowing what happens in “the 13th month,” according to an update from Dones in January.

As the program enters its second year, KCRHA is under pressure to show it’s making progress; We Are In is distributing its $10 million pledge in tranches, including an initial $4 million last year.

 

It’s unclear what, if any, funding is available to cover the hotel funding shortfall, which continues to grow every day the LEC’s clients remain in their rooms, which are distributed across several hotels in South and North King County, as well as one in Tacoma.

The implementation board includes three members (out of a current 13) who were appointed by the Lived Experience Coalition, including LEC co-founder and co-chair Okesha Brandon.

King County, which (along with the city of Seattle) is one of the KCRHA’s primary funders, says it does not have the money to pay for the LEC’s hotel bills. “We were recently made aware that the Lived Experience Coalition (LEC) is unable to maintain their temporary hoteling program, which had been used to shelter people experiencing homelessness,” a spokesman for King County Executive Dow Constantine said Friday.

“The hoteling program is independently run and managed by the LEC and is not a program within the KCRHA,” Constantine’s spokesman continued. “However, public and private partners are concerned about the impact on individuals currently sheltered in hotels and are working together to identify possible solutions.”

Spokespeople for Mayor Bruce Harrell and the city’s Human Services Department did not respond to requests for comments.

In a statement, the KCRHA said the agency was “recently made aware that the Lived Experience Coalition (LEC) is unable to maintain their temporary hoteling program, which had been used to shelter people experiencing homelessness.

“The LEC is an independent organization, and their hoteling program is not funded by KCRHA. However, we recognize that the closure of any shelter program has a significant impact on our communities and on the lives of the people given refuge in these hotels.”

The homelessness authority is “calling for a formal inquiry and audit of how the LEC program was managed and what will be done to prevent a similar situation in the future,” the statement concluded. Meanwhile, at press time, it was unclear what will happen to the people still staying in the LEC-funded hotels, and whether they’ll get to stay until they can move to other shelters or housing or be sent back out onto the street.

The KCRHA’s implementation board will meet on Wednesday, when Dones and the board are expected to discuss the hotel issue in public for the first time.