Beds, outreach for Thurston County homeless may be in jeopardy this year. Here’s why
Thurston County may lose dozens of beds for people experiencing homelessness due to reduced state funding this year.
County staff warned county commissioners about the anticipated cuts to housing, shelter and outreach projects during a recent board work session.
The affected projects are funded by the state’s Encampment Resolution Program (ERP), a statewide effort started by former Gov. Jay Inslee to remove and house people living on state-owned rights-of-way, many along Interstate 5.
The Washington state Department of Commerce is expected to provide about $5.5 million to Thurston County during a 2025-26 contract period – about $4.5 million less than county staff believe is needed.
Since 2022, the county and local cities have received over $30 million from the program, formerly known as the Rights-of-Way (ROW) Initiative. This money has supported four capital projects that have created 198 beds in either shelters or permanent housing, according to county documents.
Receiving less money will force the county and cities to selectively prioritize projects to support with available resources.
“The loss of this critical funding source has the potential to undo nearly three years of significant regional gains in transitioning individuals living outdoors to units that provide shelter and connections to life-saving case management and services,” county documents state.
The final funding amount from Commerce will depend on how the state budget pans out, but county staff are already preparing for contingencies. While the state legislature approved an operating budget before it adjourned Sunday, April 27, Gov. Bob Ferguson has yet to sign it.
“A loss or reduction of Thurston County’s annual allocation will lead to the permanent loss of at least 38 ROW-dedicated beds and 24 ROW-dedicated shelter beds,” county documents state.
From 2024-25, the Washington State Department of Commerce agreed to pay nearly $9.6 million annually to cover operational costs for 10 activities, plus administrative costs, for Thurston County and Olympia.
For 2025-2026, county staff estimate they need nearly $10 million to maintain current service levels. That includes operations costs as well as ongoing monitoring and outreach to former encampment sites.
“Outreach is critical in ensuring encampments are not re-established on ROW sites and for contacting and offering housing to individuals,” county documents state.
What has the program accomplished so far?
The Regional Housing Council, an advisory group that includes representatives from the county and local cities, first submitted a request for funding available under the program, then called the Right-of-Way (ROW) Initiative, in 2022.
Since then, outreach workers have identified 560 people to offer housing through the program and 385 have accepted housing or shelter, using a total of 291 program beds.
Seven major encampments across the county have been closed.
Additionally, ERP funds have supported four major capital projects.
- The acquisition of a Lacey hotel that was turned into Maple Court, an enhanced shelter that can serve up to 125 people. The building opened in 2023 and is operated by the Low-Income Housing Institute. The 2024-25 budget included $2.7 million in operating support for this project. For 2025-26, $3.3 million is needed.
- The construction of Franz Anderson Tiny Home Village, a city of Olympia temporary housing site. The village opened in 2023 and has 50 tiny homes that are managed by Olympia Mutual Aid Partners. The 2024-25 budget included $1.1 million in operating support for this project. For 2025-26, nearly $1.5 million is needed.
- The construction of Lotus Court in Olympia. The building opened last fall and is operated by the Low-Income Housing Institute. It features 64 supportive housing apartments for formerly homeless seniors ages 55 and older. Ten units are set aside for ERP participants. The 2024-25 budget did not include operating support for this project.
- The acquisition of an Olympia hotel that was turned into Sandy’s Flats, a permanent supportive housing project with 26 beds. The project opened last summer and is operated by Interfaith Works. The 2024-25 budget included $402,000 in operating support for this project. For 2025-26, $414,060 is needed.
Reduced funding also may jeopardize local tiny home villages. County documents state ERP funds contribute significantly to the villages’ “overall operations and financial viability.”
ERP funding current supports operations at three tiny home villages in Olympia with a total of 65 beds.
- The Quince Street Village project in Olympia. Catholic Community Services manages the project which has 100 tiny houses for single adults and couples without children. For 2024-25, $500,000 in ERP funding provided operating support for 30 tiny home beds. For 2025-26, $685,000 is needed.
- The Plum Street Village project in Olympia. Valeo Vocations manages the project which has 29 tiny homes for single adults and couples without children. Those beds are dedicated to people engaged in a new workforce development program. For 2024-25, $2 million in ERP funding provided operating support for all 29 tiny home beds. For 2025-26, $1.1 million is needed. The tiny home village is on property being purchased by the Squaxin Island Tribe from the city of Olympia.
- The New Hope Village project in Olympia. Olympia Mutual Aid Partners manages this 6-unit tiny home village at First Christian Church on Franklin Street. For 2024-25, $295,000 in ERP funding provided operating support for all 6 units. For 2025-26, $321,963 is needed.
ERP funding also provided $1.1 million in operating support for 24 shelter beds at the Unity Commons Shelter, located near the intersection of Martin Way East and Pattison Street Northeast. For 2025-26, $1.2 million is needed.
Hotel stays for ERP families were supported with $252,600 in ERP funding for 2024-25 too. This project is managed by Family Support Center of South Sound. For 2025-26, $121,300 is needed.
The remaining budget for 2024-25 includes outreach services from Olympia Mutual Aid Partners and the city of Olympia as well as administrative costs for Thurston County and the city of Olympia.
What does the county plan to do?
County staff expect the state Department of Commerce to finalize the available funding amount next month after the state budget is approved.
At that point, Commerce will issue a request for proposals that include its priorities for ERP funding. Thurston County staff expect their proposal will be due to Commerce in May or early June. That proposal will first be vetted by the Regional Housing Council and then final contracts will be presented to the county commission for approval.
Tom Webster, Senior Program Manager for the county’s Office of Housing and Homeless Prevention, told the commissioners on Wednesday that Commerce will likely want to prioritize maintaining operations at projects in which the state has made capital investments.
Given that expectation, Webster shared one budget scenario for spending $5.5 million during the 2025-2026 contract period.
In this scenario, Sandy’s Flats would get $410,000, Maple Court would get $3.2 million and Franz Anderson village would get $1.2 million.
Additionally, Quince Street Village would get $500,000. Lastly, Thurston County and the city of Olympia would each get $120,000 for administrative costs.
That leaves six projects without funding, including Interfaith Works’ Unity Commons Shelter.
Webster said Interfaith Works may be able to partially meet the $1.2 million it needs for the shelter with other homeless service funding. However, he said it will be a challenge to get it funded to a level he would like to see.
“This has been a really challenging funding year because we are anticipating less money from the state…” Webster said.
County Commissioner and Board Chair Tye Menser said he wants to see Unity Commons get the funding it needs one way or another.
“That’s a beautiful, major success story project right up the street,” Menser said. “So, we’ve got to figure out how to get them where they need to be. If that means the (Regional Housing Council) going back to turn a few dials after we get the state budget, then that should happen.”
Commissioners thanked staff for planning ahead and keeping tabs on the state budget. Commissioner Rachel Grant said she hopes the Regional Housing Council can reach a solution.
“I think that’s why we have the Regional Housing Council, because we really hope that we, as a county, should really be facilitating regional coordination of, ‘Hey, we can give less here because something else is happening here,’” Grant said.
Interfaith Works responds to potential funding cuts
Ivy Ayers, Director of Administration for Interfaith Works, said losing $1.2 million would “drastically and dramatically impact” their Supportive Shelter program.
“With a reduction of this size, if we could not find a way to replace the funds, we would have no choice but to look at significant changes that could reduce staffing, hours of operation, quality of services to our guests, and ability to remain a reliable community partner in the fight to end homelessness,” Ayers said in a statement to The Olympian.
“That said, we know our local government partners are supportive of our programs and know how vital the continuum of support that we offer is.”
Ayers said it costs about $2.85 million a year to operate the Unity Commons Shelter, which averages to about $137 per bed each night.
“That’s less than the per-day rate of an assisted living facility, the average night in jail, or the average hospital visit,” Ayers said.
Ayers said the shelter operates 24 hours a day, seven days a week and offers more than just beds. Guests get their own space, showers, laundry access, kitchen access, garden access, support for achieving their goals, food to cook with, staff for daily support, mental health support services and hygiene and medical supplies.
“We need shelter services to be comprehensive if we’re looking to actually resolve homelessness and not just kick the can down the road,” Ayers said.
A bulk of their expenses are in staff time to provide services that support the safety of the space, the guests, the apartment residents above, the neighborhood and the community as a whole, Ayers said.
She said the shelter served 153 guests last year and helped 41 of them into stable housing.
“The reality is that sheltering saves lives and saves money for the community overall by reducing the number and intensity of interactions with other systems like emergency response, medical, and law enforcement,” Ayers said.
Ayers said Interfaith Works has secured some funding to support their case management and mental health services, such as Treatment Sales Tax funding, opportunities from the state Department of Commerce and contributions from individuals and faith community partners.
“However, our primary funder is Thurston County, and the reality is that even secured funding for our federal contracts is no longer as steadfast a commitment as it used to be,” Ayers said.
The non-profit actively applies for private funds and any other opportunities it can find, but Ayers said the continuity of funding sources remains uncertain.
For example, she said the federal Emergency Food and Shelter Program is in jeopardy as well. This program has supported community shelters across the nation for decades and was recently paused, prompting nonprofits to sound the alarm.
“This is money that our community, and others, have been able to count on for more than 40 years — food banks and shelters across the country will be faced with somehow making up those funds or reducing their services if government partners, especially federal government partners, pull back,” Ayers said.
Ayers said Interfaith Works remains dedicated to their work despite the current climate of uncertainty.
“While the possibility of losing this funding is scary, we remain steadfast in our commitment to serve the community,” Ayers said. “The stability of the services we offer at the shelter underpins the rest of the response system and has for more than 50 years.”
This story was originally published April 29, 2025 at 5:00 AM.
