By Erica C. Barnett

In the final days of the state legislative session, Seattle lawmakers quietly bailed out a hotel-based homeless shelter program that ran out of money in early April, using $6 million in “underspend” from a program that addresses encampments in state-owned rights-of-way to keep the hotels open while the King County Homelessness Authority tries to find places for hotel residents to go.

The KCRHA has until the end of June to spend the money, which can only be used to “maintain the operations of, and transition people out of, as appropriate, a hotel housing more than 100 people experiencing homelessness that is at imminent risk of closure due to a lack of funding,” according to language state Rep. Nicole Macri (D-43, Seattle) and Sen. Joe Nguyen (D-34, Seattle) inserted into this year’s supplemental budget.

—State Sen. Joe Nguyen[/perfectpullquote]

“[KCRHA CEO] Marc Dones reached out, saying they had discovered this crisis several weeks [earlier], saying they had been trying to figure out how to transition people” out of the hotels, Macri said. At the time, the KCRHA estimated there were more than 300 people living in rooms at six hotels, a number that has since dwindled. “They said this is an urgent need—it’s an immediate need right now.”

“Generally speaking, a request of that amount coming this late would not have had the sympathy that it did,” Nguyen said. “At that point… I was like, ‘I don’t want 300-plus families to be unsheltered.'”

Because it was so late in the session, Macri said, it wasn’t possible to just move the underspent dollars from one year’s budget to the next. A change like that would require legislation to reallocate the funds, which are earmarked for the highway encampment program. Instead, the state Department of Commerce provided supplemental budget language that allowed the KCRHA to use the leftover money, which would otherwise have gone back to the state’s general fund, to pay for the hotels.

As PubliCola reported exclusively earlier this month, the Lived Experience Coalition received a total of $1.3 million in federal grants through the United Way of King County, but the money ran out earlier this year, forcing a scramble to save the program.

The LEC, formed in 2018, is a group of people who have direct experience with homelessness or systems that homeless people frequently encounter, such as the mental health care system. Until last year, they had never been in charge of a shelter or housing program. The LEC has blamed the hotel crisis on its fiscal sponsor, a nonprofit called Building Changes, which denies responsibility for financial errors.

We Are In, the funder for Partnership for Zero, stepped up to pay for the hotels through the first week of April. (According to a spokesman, the two We Are In board members who are affiliated with the LEC recused themselves from the vote.) The KCRHA is planning an investigation into what happened with the hotels, which will be paid for by the Campion Advocacy Fund, one of We Are In’s funders. Later this month, the authority reportedly plans to discuss the hotels during a joint meeting of the agency’s governing and implementation boards.

Meanwhile, Dones has said the regional authority only recently became aware of the hotel funding crisis and had nothing to do with the LEC’s contract to run the hotels. However, the KCRHA’s own downtown outreach workers, known as systems advocates, placed dozens of people in the hotels this year as part of the Partnership for Zero, a public-private partnership aimed at ending unsheltered homelessness downtown.

At its peak, the hotel shelter program was spending more than $1 million a month to pay for about 250 hotel rooms, including rooms in two last-chance hotels for people who had been kicked out of other locations due to behavioral issues. If the KCRHA uses up the entire $6 million between April and the end of June, it will have spent $2 million a month.

It’s unclear why the KCRHA asked for so much spending authority. “I really left it to the executive branch to vet it and to determine, ‘is this a reasonable thing to do?'” Macri said. “I didn’t get a clear accounting. … It seems like a lot.” A Commerce Department staffer did not immediately respond to a request for comment on Tuesday.

When PubliCola inquired about the hotels this week, a KCRHA spokeswoman said “our team is continuing to match people to resources” and that it would be a day or two before they could provide details about plans to wind down the hotels and how much it will cost. “We’re still finalizing some of the locations and ensuring that everyone is taken care of,” the spokeswoman said Tuesday.

In a joint statement sent to PubliCola after this story was published, the offices of Gov. Jay Inslee, King County Executive Dow Constantine, and Seattle Mayor Bruce Harrell said, “This hotel voucher program was launched and operated independently from any city, regional, or state effort. When our teams were alerted to the situation, we worked with partners in the public and private sectors to identify potential solutions and coordinate with the King County Regional Homelessness Authority (KCRHA).”

“Without continued funding, hundreds of individuals that include families with children and seniors with significant health issues would likely return to living outside. Because of the vulnerability of this population, the Legislature approved the governor’s request for $6 million to further support this transition effort.”

Sharon Lee, the director of the Low-Income Housing Institute, said the KCRHA asked LIHI for access to some of its tiny houses, including units that are ordinarily reserved for referrals from the city’s HOPE Team, which offers shelter to people living in encampments. Many of those living at the hotels will need shelter that can accommodate special needs, including women and families fleeing domestic violence and well as people with debilitating mental and physical health issues.

In addition to her work as a legislator, Macri works as a deputy director at the Downtown Emergency Service Center, which provides shelter, health care, and housing. She said Dones initially asked for six months to move people out of the hotels, but that she suggested a quicker time frame “because of the high cost.” However, she noted that it can be challenging to find shelter and other resources for people with high needs, especially in a city with so few available shelter beds.

In 2021, DESC had to relocate 130 people from an emergency COVID shelter at Seattle Center to other locations when that shelter shut down. “Of course, DESC does operate other shelters, so we were able to slowly refer people to beds at DESC and other providers,” but even that took three months, Macri said. To make it work, “we had to redeploy staff [and] stop taking referrals”—a tradeoff that meant people living unsheltered were unable to access those shelter beds.

The right-of-way cleanup program, originally proposed by Gov. Jay Inslee to reduce the number of encampments on property owned by the Washington State Department of Transportation, funds JustCARE, a program headed up by the Public Defender Association that shifted its focus last year to provide case management and shelter exclusively for people living on state-owned rights-of-way. According to the Department of Commerce, the program was fully or partly responsible for sheltering or housing more than 300 people in King County. The The reallocation,  reduces the KCRHA’s 2022-2023 budget for right-of-way work from $45 million to $39 million.