By Erica C. Barnett

The King County Regional Homelessness Authority has rescinded a $3 million grant it gave the Low Income Housing Institute to build 60 new low-barrier tiny houses outside King County’s youth detention center, claiming LIHI delayed the process by failing to secure a site in time.

Tiny houses are small, freestanding, heated structures that provide shelter for one or two people. Unsheltered people often prefer tiny houses to other kinds of shelter because they provide privacy and a door that locks.

The money will now go to the Salvation Army, which will use it to convert some of the existing transitional housing beds at its William Booth Center in SoDo into non-congregate emergency shelter beds, according to KCRHA. While the converted rooms are technically “new” shelter beds, they aren’t really additive, since the people living in the existing transitional housing will either have to leave or see their housing downgraded to emergency shelter.

“Without this funding, we may have had to close beds,” Salvation Army spokeswoman Sara Beksinski said.

KCRHA spokeswoman Lisa Edge said the agency “chose to prioritize speed of implementation in the competition for these funds,” KCRHA spokeswoman Lisa Edge said. “Because LIHI could not perform in the period clearly outlined for the second location, we proceeded with an award to the next highest rated applicant, the Salvation Army.”

The Salvation Army’s original application was for $1.1 million; we have a call out to find out if this is how much the KCRHA awarded them and, if so, what will happen to the rest of the funds.

The $3 million more than half the funding—nearly $6 million—LIHI worked to secure for tiny house villages in the Seattle’s 2025 budget. The other half is funding a new tiny house village in North Seattle called Olympic Hills, which opened last month. The second shelter was a joint project between LIHI and Purpose Dignity Action’s CoLEAD program, which provides temporary lodging and intensive case management to people with physical and behavioral health needs; now, CoLEAD will relocate its operation to the North Seattle village.

In late January, LIHI appealed KCRHA’s decision, pointing to the agency’s own delays in approving contracts that were funded back in 2024, and says they were blindsided by the agency’s decision to take back the funds less than three months after they sent LIHI a letter signing off on the county-owned site.

“We should ask why the KCRHA’s [Request for Proposals] process took so long, given the homelessness crisis,” LIHI director Sharon Lee wrote in her appeal. Although the city council approved the funding in late 2024, the city didn’t announce the awards until the following July. “We believe it is KCRHA, not LIHI, that delayed the overall timeline in creating two new villages.”

Lee acknowledged that LIHI experienced hiccups securing a location for the second shelter, but said King County Executive Girmay Zahilay had made it clear that securing the King County site was a high priority for his new administration. As backup, Lee said, LIHI also secured an agreement with Mount Baker Housing for a second site—the old Thunderbird Treatment Center in Rainier Beach, which the housing nonprofit plans to redevelop in about three years.

“We were excited to have the county commit to finally doing something” with tiny houses, Lee said.

The KCRHA didn’t let Zahilay know they were rescinding LIHI’s funding for the planned tiny house village at the county site,  his office confirmed.

“Our office was not aware that KCRHA was going to rescind funding and award it to another provider, and we expressed disappointment that they did not update or coordinate with our administration before making this decision,” Zahilay spokeswoman Callie Craighead said.

Zahilay is currently “having initial conversations with stakeholders about the potential to site a tiny home village at the juvenile justice center property,” Craighead said. “Before a tiny home village is sited, we would need to engage with staff at the facility, see robust neighborhood outreach plans and timelines, and understand how services would be prioritized for those in need in the immediate area.”

The city’s budget didn’t explicitly grant the $6 million to LIHI, because all large contracts must go through a standard bidding process. But it was LIHI that secured the funding, working with City Councilmember Bob Kettle to add the money in 2024, with the understanding that it would fund tiny house villages or some other form of new noncongregate shelter.

In a letter rescinding KCRHA’s funds, KCRHA’s deputy director, Jeff Simms, blamed LIHI for the delays, saying the homelessness authority had already granted one extension to give LIHI more time to nail down a location and that this violated the KCRHA’s “preference for applications that had a site located and prepared for operation.”

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But LIHI said the timeline was significantly more complex than the KCRHA was letting on, and pointed to another email from Simms, in October, saying that  “LIHI has met the requirements of the [request for proposals] to have located a site for operation of a second non-congregate shelter” at the juvenile detention center or the former treatment center.

That letter did note that KCRHA might “take steps” to reallocate the money to another agency if LIHI didn’t secure a site by December. Lee says LIHI signed a letter of intent with Mount Baker Housing to lease their Rainier Beach site and sent a copy to KCRHA in mid-December, but never heard anything back until the agency rescinded their funding in January. “For a whole month, there was silence, until they yanked the contract,” Lee said.

KCRHA CEO Kelly Kinnison rejected LIHI’s appeal earlier this month, and LIHI’s efforts to get city officials to intervene have been unsuccessful so far. Kettle, who got the money into the city budget back in 2024, told PubliCola, “We understand LIHI’s frustrations but also KCHRA’s need to press forward. We will work with both to move ahead on other important projects in [Council District 7] or that have important public safety impacts.”

A spokesman for Mayor Katie Wilson’s office, Sage Wilson, told PubliCola, “We’re not going to comment on the details of a dispute between LIHI and KCRHA. However this situation does underscore the importance of accelerating the development of emergency shelter, which is why the mayor has already issued an executive order doing just that.”

LIHI and KCRHA have long had a tense relationship, going back to the time of founding CEO Marc Dones, who frequently clashed with Lee over funding for her projects. Lee said she isn’t done fighting over the rescission, and she’s talking to KCRHA’s governing board about what she considers overreach by Kinnison and Simms.

Meanwhile, she said, “We are going to continue to develop tiny house villages, because we know that the mayor is very supportive and we think there are going to be other opportunities for us.” LIHI just opened a new tiny house village in Tukwila and is working to site a new RV safe lot, with tiny houses, in West Seattle.