(The Center Square) – The city of Spokane may delay a local funding opportunity for behavioral health and homelessness service providers as the federal government prepares to issue new guidelines on June 1.
The proposal is listed on the Spokane City Council’s Urban Experience Committee agenda for Monday.
If approved, the decision would delay a funding opportunity, financed by a .1% local sales tax that the council approved in 2020 without voter approval until 2027. Local law requires the council to issue the funding availability for housing and behavioral health services by June unless delayed by a resolution.
Monday’s agenda frames the proposal as a way to buy time ahead of the U.S. Department of Housing and Urban Development issuing another federal funding availability next month. HUD issued a notice of funding opportunity last year to wind down Housing First, but a judge ultimately blocked the NOFO.
“[HUD’s] FY 2026 Continuum of Care Request for Proposals will be published in the summer of 2026,” according to the proposal. “Delaying the [local funding availability] to spring 2027 will allow the City to identify service gaps as a result of HUD changes and will allow for strategic and deeper investments.”
Last November, HUD issued an opportunity mid-way through its two-year grant cycle with new rules limiting renewal funding for Tier 1 projects. Those are high-priority local projects that usually provide taxpayer-subsidized permanent housing without any preconditions of sobriety or addiction treatment.
The new rules capped Tier 1 renewal funding at 30%, down from 90% in the ongoing grant cycle, in an effort to move away from Housing First, which the Trump administration calls a “failed ideology.”
The goal was to force regional Continuum of Care programs to redirect funding to treatment projects.
A federal judge blocked the new funding rules, given how they could affect HUD’s current grant cycle.
However, the agency announced last month that it’s “moving forward on bold homelessness reform.”
“The status quo of ‘housing first’ and ‘harm reduction’ has failed at great cost to those suffering on our streets and to working American taxpayers,” according to the release. “HUD intends to rebalance the CoC program to focus on a diversity of solutions and treating the underlying causes of homelessness.”
A coalition across Spokane has been leading an effort since August to transition every jurisdiction in the county from a Housing First to a Treatment First approach in anticipation of HUD’s new rules. The goal was to save Spokane’s CoC millions of dollars in federal funding that it spends on homelessness.
The group sent a document signed by nearly every major player, except the cities of Spokane, Spokane Valley and Spokane County, to HUD this week. However, County Commissioner Josh Kerns and Valley Communication Manager Jill Smith told The Center Square that their jurisdictions might still sign on.
Spokane Mayor Lisa Brown and other officials have suggested the regional agreement isn’t necessary.
Arielle Anderson, director of the city’s Housing and Homeless Services Department, responded to an inquiry from The Center Square on Friday, arguing that Housing First is not in conflict with treatment.
Still, the low-barrier nature of Housing First also doesn’t require individuals to participate in treatment.
“The City anticipates HUD posting a similar NOFO to the one issued in November,” Anderson wrote in an email. “If the new NOFO aligns with the November NOFO we will see reduction in overall funding.”
Anderson says Monday’s proposal is in anticipation of HUD shifting its framework around grant scoring, eligibility, renewal structure and prioritization. She said the city is attempting to preserve local funding so it can assess the impact of HUD’s NOFO at the end of May and work with local providers to fill gaps.
“Knowing exactly where the biggest gaps will occur is not possible yet,” Anderson wrote in her email.
She said the city has conducted internal and external discussions about potential impacts, but declined to identify which providers could face federal cuts, since HUD hasn’t issued its new funding guidelines.
Former Spokane City Councilmember Jonathan Bingle and property developer Sheldon Jackson believe the city is at risk of losing federal funding due to its reluctance to transition away from Housing First.
“Due to our failure to get all jurisdictions to sign the [agreement], Spokane County is now at risk for loss of funding,” Jackson wrote in an email to elected officials and providers throughout the region.
Jackson and Bingle helped spearhead the effort that seemingly came to a close this week, and have raised concerns that the local jurisdictions may try to fill gaps by increasing taxes again in the future.
“I would imagine that the city of Spokane would have been in a much stronger position regionally, had the city of Spokane and the service providers been willing to accept the parameters,” Bingle told The Center Square earlier this week when asked about the city’s ability to secure funding without signing.
