(The Center Square) – King County’s housing-first approach to addressing homelessness could be threatened by recent federal policies under President Donald Trump’s administration.
The King County Regional Homelessness Authority, or KCRHA, estimates this housing-first strategy – which prioritizes placing people into permanent housing before addressing other root causes of homelessness – could cost $450 million to $1.1 billion per year over the next decade.
Now, that strategy faces major threats from shrinking federal support.
The Trump administration, working with the Department of Government Efficiency, or DOGE, has proposed cutting the Department of Housing and Urban Development workforce in half. The Associated Press also reported the administration has stalled at least $60 million in funding intended largely for affordable housing projects nationwide.
KCRHA Deputy CEO Simon Foster warned that these moves could critically impact the region’s homelessness response. For one, the HUD Continuum of Care program is the third largest funding source for KCRHA. This year, the agency received $23 million from the program, down 66% from the $68 million it received in 2024.
In total, King County received $66 million from HUD this year. Foster said $7 million goes directly to contractors, such as Catholic Community Services, Downtown Emergency Services Center, and Friends of Youth.
KCRHA estimates that 4,490 people will be impacted by the reduced funding, including 241 employees across KCRHA funded programs who are at risk of furlough.
“These funding delays or reductions could prevent states, communities, nonprofit organizations, and homeless individuals and families from receiving the critical resources needed to address the crisis on sheltered and unsheltered homelessness,” Foster said during a Select Committee on Federal Administration and Policy Changes meeting on April 3.
In addition to direct funding cuts, the development of affordable housing is being impacted by the volatility of low income housing tax credits – which is a federal source used in the majority of subsidized housing projects.
Naomi See, vice president of investor relations at Hunt Capital Partners, told the committee that uncertainty over federal policy is driving down the value of the tax credits by 10 to 15 cents on the dollar. Investors previously paid up to 90 cents per credit; now the rate is closer to 75 to 80 cents.
The low income housing tax credits usually make up about 40% to 70% of the overall capitalization of an affordable housing project, according to See.
Investors are anticipating the corporate tax rate going down to 17%, which would lead pricing to drop another 10 cents.
“Years ago, we were getting up to 90 cents on the dollar for tax credits in Seattle and King County, and oftentimes at the lower tier we’re seeing 75-80 cents – we are seeing a dramatic drop in average pricing,” See said.
Tariff unpredictability could also raise development costs. See noted that 72% of imported lumber comes from Canada and 74% of imported gypsum board, or drywall, comes from Mexico – both critical for housing construction.
On Wednesday, Trump backed off his tariffs on most nations for 90 days even as he further jacked up the tax rate on Chinese imports to 125%.
Last year, KCRHA counted 16,385 people experiencing homelessness in the county, an all-time high for the region. Despite rising numbers, county and city leaders remain committed to the housing-first approach.
