King County officials warn HUD changes could strip millions from local homelessness programs

King County and homelessness service leaders warned the Health, Housing and Human Services Committee on March 3 that proposed changes by the U.S. Department of Housing and Urban Development to the Continuum of Care (CoC) funding competition could destabilize existing supportive housing projects and threaten services for thousands of households.

Jeff Sims, chief program officer at the King County Regional Homelessness Authority (KCRHA), described a national contest called a NOFO (notice of funding opportunity) that HUD proposed last December and that multiple jurisdictions, including King County, sued to block. A federal district court issued a preliminary injunction that paused HUD's new competition; HUD appealed that injunction yesterday. Sims said the appeal means the county still faces near-term uncertainty and that, if the injunction is lifted, some projects could be required to compete under very different rules as soon as this summer.

Sims provided several figures to illustrate the scale: he said the CoC portfolio for the region involves about $65,000,000 in competitive awards and that King County separately channels about $58,000,000 in additional investments that blend with those awards. Sims said the county could face an immediate funding shortfall if HUD moves forward and that "we could be looking at something in the range of $20,000,000" nationally in the second half of this year; he later corrected a county-specific figure and said King County itself faces a potential $14,000,000 shortfall in certain scenarios and that roughly $40,000,000 of permanent-housing investments nationwide would be at risk under HUD's proposed caps.

Sims also said the KCRHA's analysis shows an estimated 3,247 households across the CoC system could be affected based on HMIS point-in-time counts. "We estimate 3,247 households," he said; he emphasized this is a point-in-time estimate and numbers can change.

Daniel Malone of the Downtown Emergency Services Center (DESC) described how CoC dollars underwrite permanent supportive housing for people with serious behavioral health conditions. He said DESC operates about 2,100 housing units and that some programs rely on CoC funds for a substantial share of operating support (in some single-site programs he noted "as much as close to 50%" of operating funds). Malone warned that loss of those funds would jeopardize housing stability for people with chronic disabilities.

Panelists described mitigation steps underway: legal challenges that helped secure injunctions, regional advocacy (including engagement with congressional offices and Senator Patty Murray), agency workshops to prepare applicants for different HUD priorities, and local contingency budgeting. Council Central staff flagged a county budget proviso: the signed 2026-27 budget includes a request that, if fund balance permits, up to $6,000,000 in 2025 unspent general fund dollars be identified in a supplemental budget (anticipated in April) with half for rental assistance (United Way) and half for potential CoC cuts.

Committee members asked timing and scale questions. Council Member Battle asked when impacts could begin; Sims said as soon as July 1 if a court lifted the injunction and HUD proceeded. Sims and Malone urged local governments to plan for backfill and alignment of behavioral health resources with housing services to reduce disruption.

Next steps: KCRHA and DESC will continue planning and advocacy; county staff expected to transmit a supplemental budget proposal in April identifying any available contingency funds; the committee scheduled follow-up briefings and asked to remain involved in planning.