(The Center Square) – Seattle Mayor Katie Wilson sidestepped a question Tuesday when The Center Square asked whether new federal grant rules shifting away from Housing First could impact her shelter plan.
She tried to dodge the question when approached after the grand opening of a new tiny home village in South Seattle. The Center Square had planned to ask Wilson how changes to the U.S. Department of Housing and Urban Development’s federal grant rules might affect her new homelessness strategy.
The Trump administration’s new approach begins a transition away from providing taxpayer-subsidized housing without preconditions for treatment or sobriety, and toward helping people reach self-sufficiency.
Wilson announced a new strategy last week that builds on a pilot program from last summer, which increased coordination among the city, service providers and businesses. Her plan relies on several of the same nonprofits that the city worked with for years while homelessness increased under Housing First.
“We got contingency plans,” Wilson told The Center Square when asked what it will mean for Seattle’s Housing First programs if HUD cuts funding as security closed her door on a blacked-out Chevy Tahoe.
Seattle’s 2026 budget includes $9.35 million in a shelter and housing reserve and an additional $11.1 million in restricted funding to cover potential funding reductions when HUD announces grant awards.
King County’s 2026 budget also set aside $10 million to offset potential HUD funding cuts and delays.
Seattle and King County currently rely on about $67 million annually in federal funding through HUD’s Continuum of Care program. The county warned in July that $22 million in existing programs could be impacted by HUD’s new funding rules, but it’s unclear how much of that would directly impact the city.
When asked if she would tap the roughly $20 million if HUD cuts funding, Wilson’s team shut the door.
“I don’t think that’s going to happen; she’s got another thing to get to,” Ansel Herz, the mayor’s press secretary, told The Center Square when asked for a quick moment with Wilson to talk about HUD cuts.
Herz contacted The Center Square after the event and said that the mayor’s team would make her available “next time” and that they “didn’t intend for it to play out that way,” and that the “questions are legit.”
Callie Craighead, press secretary to King County Executive Girmay Zahilay, told The Center Square in an email on Tuesday that all $10 million is still set aside and not allocated to any specific housing program.
The King County Regional Homelessness Authority submitted an application last month for the 2026 grant cycle, proposing reductions to existing programs. While Seattle and King County are taking back their contracts in 2027 amid KCRHA’s financial mess, the agency still acts as the lead CoC applicant.
“King County is exploring every available option with our local and state partners in the event that federal funding is reduced or eliminated entirely to keep supportive housing available,” Craighead said.
“We are also evaluating programs currently supported by other funding sources,” Craighead continued, referencing a Mental Illness and Drug Dependency Behavioral Health Sales Tax, “to determine whether they could qualify for funding. If so, this could free up local resources to sustain supportive housing investments.”
HUD’s new grant rules have faced legal challenges, but a federal appeals court allowed the 2026 grant competition to proceed last month after another court had blocked it in August. Washington and other states have sued to block the changes, but federal law requires HUD to award the funding by Dec. 1.
One of the main changes in the new grant rules caps renewal funding for Tier 1 projects like permanent supportive housing at 60% of the region’s annual renewal demand. That was about 90% in the past, with HUD now requiring about $1.3 billion, 32% of the nationwide competition, to go to new projects.
PSH projects can still receive funding, they’ll just face more competition in the past, meaning support could increase for transitional housing and services such as addiction and behavioral health treatment.
KCRHA’s application proposed reducing support for Seattle Rapid Rehousing for Families from $2.25 million to about $514,000, while shifting the difference to other projects. It also proposed a $35,000 reduction to Ozanam House’s permanent supportive housing program in Seattle, among other cuts.
Craighead argued that limits on PSH projects, which often allow residents to consume drugs in their taxpayer-subsidized units, “will have devastating impacts” and “roll back years of progress.” She said that Zahilay has convened a new workgroup to explore a “new dedicated revenue source for housing.”
HUD Secretary Scott Turner has called Housing First a “failed model,” and argues that the practice has run taxpayers billions of dollars as homelessness increased about 27% nationwide from 2013 to 2025.
Meanwhile, taxpayer-funded beds have increased by about 151%, as CoC spending increased by 111%.
“Housing first became housing only,” Caitlyn McKenney, deputy assistant secretary of HUD’s Office of Special Needs, told The Center Square in June after Turner announced the 2026 funding availability.
“It’s spelled out clearly … invest in treatment and recovery, invest in your public safety response,” she said in an interview last June. “Don’t continue with this idea that endless amounts of free, for-life, no strings attached housing is going to solve the addiction crisis we see unfolding on Seattle’s streets.”