By Erica C. Barnett

Pallet Shelter, a company that manufactures freestanding, one-to-two-person shelter units that has been active in Seattle since 2022, is shutting down effective tomorrow—an abrupt closure that comes just months after the nonprofit Everyone Deserves Housing opened a 75-unit Pallet shelter in Interbay.

Pallet announced the news on its website and in social media posts on Thursday, saying that a lack of funding and a shift in “political priorities” were partly to blame for the company’s shutdown. The company will cease operations on Friday.

“The homelessness response landscape has evolved significantly since Pallet began,” the post on Pallet’s website says. “Communities understand the challenge differently. Customer needs have become more complex. Funding environments and political priorities have shifted. And through nine years of working alongside communities across North America, we have learned an extraordinary amount about what works, what doesn’t, and what is needed next.”

Pallet founder and CEO Amy King did not respond to a request for an interview, and Everyone Deserves Housing director Dan Wise declined to comment.

The closure of Pallet means that the operators of existing Pallet shelters, like the one in Interbay, will have to replace parts and perform maintenance on the units themselves, with the help of a limited warranty that covers “defective” shelter units and an online handbook that includes sources for items that might break, like heaters, locks, and windows.

The Interbay Pallet shelter is one of the first shelters in several years to open under a contract with the city’s Human Services Department rather than the King County Regional Homelessness Authority. The contract, originally for 50 Pallet units with a future expectation of 100 units on site, was amended in April.

The new contract added 25 units, for a total of 75, removed the reference to 100 eventual units, and tripled in cost, from $1.3 million to almost $4 million. A spokeswoman for HSD said the increase “reflects planned phased work that came on incrementally adding budget for scope as it was confirmed.”

Pallet’s shelter units, which are made of plastic and fiberglass panels that flatten for transport, are utilitarian—consisting of little more than a shed with narrow cots that fold down from the walls—but expensive, at almost $20,000 for each micro-modular shelter. That’s almost five times as much as one of the Low-Income Housing Institute’s “tiny houses,” which are made of wood, and almost four times as much as Pallet cited as a starting price for each unit when PubliCola covered their first Seattle shelter in 2022.

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In an interview on Thursday, Mayor Katie Wilson said she doesn’t believe the closure of Pallet will impede her administration’s ability to keep opening new shelters.

“It’s unfortunate that they’re shutting down, but we will be able to move forward,” Wilson said. “My understanding is that Pallet shutting down is really due to shifts in the availability of public funding—they just don’t have the demand, in terms of purchasing their shelters, that they need to keep them in business.”

In 2024, a fire raced through a Pallet shelter operated by Catholic Community Services on Elliott Ave. W, destroying or damaging 25 of the units and displacing 28 people. Similar fires have occurred in several other Pallet shelters in California, raising concerns about the flammability of the fiberglass-reinforced plastic used in the shelter units.

Wilson said the city will continue to partner with groups like Sound Foundations, which builds wooden “tiny house” units for the Low-Income Housing Institute’s tiny house villages. She said the city is also looking into shelter options that don’t involve micro-modular units, such as shelters inside leased buildings. The HSD spokeswoman said the city is working to “diversify” the types of shelter it provides, saying, “the City’s shelter expansion is not dependent on a single model. It includes tiny houses, leased apartment buildings, and safe lots for vehicles.” The city just put out a new request for qualifications for shelter providers last month.

That has been the case historically, but it’s a departure from the mayor’s initial commitment to focus on creating large new village-style shelters as a way of standing up lots of new shelter quickly.

Since that “shelter accelerator” announcement, the city has opened or announced a net total of 175 new Pallet and tiny house units combined, a fraction of the goal Wilson set of opening 1,000 new shelter beds in her first year.