(The Center Square) – The U.S. Department of Housing and Urban Development’s funding notice of last week is expected to create a $40 million shortfall for the King County Regional Homelessness Authority, leaving Seattle and King County scrambling to cover the gap as they continue budget deliberations.
On Thursday, HUD issued its fiscal year 2025 Notice of Funding Opportunity for homelessness Continuums of Care, or CoC, which caps permanent housing spending at 30%, a major shift from the currency 87% of local CoC funds supporting permanent housing.
That same day, 42 members of the Senate Democratic caucus sent a letter to HUD Secretary Scott Turner urging the agency to “immediately reconsider” the policy changes to the CoC program, requesting Turner “expeditiously” carry out the previously planned and Congressionally authorized two-year notice of funding opportunity.
HUD says the change aligns with a previous executive order issued by President Donald Trump directing federal agencies to move funding away from a Housing First approach to a treatment first approach. In a press release, the agency argued the Housing First approach “encourages dependence on endless government handouts while neglecting to address the root causes of homelessness, including illicit drugs and mental illness.”
“These long-overdue reforms will promote independence and ensure we are supporting means-tested approaches to carry out the President’s mandate,” Turner said in a statement.
KCRHA said it had anticipated the funding change, estimating a roughly $25 million drop in federal support. The agency has not indicated any shift in its focus on permanent housing, leaving its two main contributors – Seattle and King County – to close the gap.
Seattle City Councilmember Alexis Mercedes Rinck added an amendment to the city’s 2026 proposed budget that allocates $11.8 million to the Seattle Human Services Department to bolster the city’s emergency reserve and soften the impact of the federal funding cut on local shelter and housing programs.
“The actions of this federal regime have jeopardized so many bodies of work at the city and our country, and have introduced a lot of uncertainty to our community,” Rinck said in a budget committee meeting on Friday.
Rinck’s amendment passed 8-0, with one abstention. It coincides with a proposal from King County Councilmember Teresa Mosqueda, set for deliberation on Tuesday, that would commit the county to partnering with Seattle and KCRHA on a new regional CoC plan and request the County Executive’s Office to transmit an appropriations bill for contingency funding by March 16, 2026.
KCRHA previously warned city officials that the funding loss could threaten housing and related services for approximately 4,500 households.
According to Rinck, any expansions of Seattle’s homelessness programs will be paused until the CoC outcome is fully understood. The city council will reevaluate the need for $11.8 million after the continuum of care notice of funding opportunity results are released in 2026.
If the mayor determines that any of the $11.8 million is not needed, it could instead be directed to other programs.
The maximum amount of funding the Seattle region can receive from HUD’s notice of funding opportunity is $19 million, which is a 71% decrease from the $65 million KCRHA typically receives for its CoC.
