City releases results of $34 million homelessness services RFP

This afternoon, Mayor Tim Burgess and Human Services Department Director Catherine Lester announced funding grants to human services providers as a result of the $34 million RFP published earlier this year.

The original RFP was for a total of $30 million in funding, but the Mayor and Council found an additional $4 million to throw in during the 2018 budget process that concluded last week.

Overall, HSD received 181 applications from 57 providers requesting a total of $106 million, and they funded 98 projects from 30 providers across seven areas: Diversion, Emergency Services, Outreach and Engagement, Permanent Supportive Housing, Prevention, Rapid Rehousing, and Transitional Housing.

According to HSD, all seven areas are receiving a funding boost from 2017 levels. Some more than others: diversion, prevention, rapid rehousing and permanent supportive housing get significantly larger funding, while transitional housing gets a modest increase.  Many people were worried that transitional housing would be cut in favor of rapid rehousing (which the U.S. HUD is throwing its weight behind); that clearly didn’t happen.

HSD has specific goals for exits to permanent housing from each of the programs (in the table above), and it’s interesting to compare “cost per exit” across the programs.

These numbers mostly make intuitive sense; emergency services and outreach to people living unsheltered is the most expensive approach with the lowest return. Diversion and prevention programs are the most cost-effective, as they catch people quickly as they are entering the system and before they become difficult to rehouse. Interestingly, the cost per exit from transitional housing is not much higher than for rapid rehousing; part of the argument for the new emphasis on RRH was that it was far cheaper, but apparently that is not turning out to be the case in practice. Also, the cost per exit for permanent supportive housing is extremely low — too low. I suspect there is a typo somewhere in HSD’s figures.

There were seven big winners in the RFP, together taking $22.5 million of the $34 million distributed:

The list of unfunded proposals is also interesting. Of the $50.5 million of unfunded requests, almost half the dollar value came from one provider: Abundance of Hope. They clearly decided to “go big” with over $24 million of asks across seven proposals.

As noted in their press release, HSD made a bold move: they decided to stop funding basic emergency shelters and focus their energies on “enhanced” shelters that are open 24 hours. This makes enormous sense (and in fact I’ve been arguing for over a year that they should do exactly this) because it’s well established that overnight shelters that take in people at 7pm and kick them back out on the street at 6am don’t help homeless people, especially if they make them give up their pets, partners and possessions in order to gain entrance. HSD has found the dollars to extend existing city funding for overnight shelters until June so that none of them will fold during the winter months, and some overnight shelters are privately funded and may continue to operate, but starting in January the city will direct its dollars to enhanced shelters.

That move won’t be without blowback, and the first will come from SHARE and WHEEL, which operate both shelters and “tent city” sanctioned encampments. SHARE/WHEEL have a reputation for being difficult to work with and loose with their finances; they also have a reputation for showing up at City Hall and kicking up a fuss when their funding gets taken away (as King County did last year). There will also be pointed criticism if any of the existing permanent supportive housing and transitional housing programs on the “unfunded” list end up in danger of closing. Setting aside the Abundance of Hope requests, there is about $6 million in unfunded requests for permanent supportive housing, and $1.1 million for transitional housing.

The big promise that HSD is making is that their new focus on results-based funding will lead to better results, and in particular more households exiting from homelessness to permanent housing. They are predicting almost 7400 exits combined from the programs they are funding, an ambitious number to be sure. On the front end, they appear to be making better, more informed bets on programs that work and where there is established need: permanent supportive housing, rapid rehousing, diversion and prevention — investments all supported by the Poppe Report and consistent with the Pathways Home plan. The big question, though, will be whether there is enough permanent housing for those people to exit into. Seattle is in the grips of an affordable housing crisis too, one of the leading causes of the homelessness crisis, and while there are efforts to preserve and increase the supply of affordable housing, demand continues to increase faster than supply can come online.  The Navigation Center has already admitted that it can’t meet its goal for how quickly it can move its residents out to permanent housing; other than the investment in permanent supportive housing for those who can’t live independently, there is little in the funding announced today that will create more places for people to land. The city will need to keep pushing on its affordable housing programs (MHA, the Seattle Housing Levy, Yesler Terrace, etc.) because without that the homeless response will inevitably run into a brick wall.

Nevertheless, this is a start towards a more effective homelessness response that tracks and rewards results, and funds programs that are known to work. It’s rare that I commend HSD (and they still need to work on their transparency; they are hiding a lot of data on the RFP process) but they stuck to the priorities in the Poppe Report and made some brave moves in saying “no” to providers with friends in City Hall.