King County rescinds $3M LIHI tiny-house grant, redirects funds to Salvation Army

The King County Regional Homelessness Authority rescinded a $3,000,000 grant to the Low Income Housing Institute that had been earmarked to build 60 low-barrier tiny houses outside King County’s youth detention center, and the authority redirected the funds to the Salvation Army. The rescission removes the capital award tied to that 60-unit project and shifts roughly $3 million of tiny-house funding into a different provider pipeline.

KCRHA said the move reflected missed deadlines and site delays, asserting LIHI failed to secure a site in time and that the delay justified taking back the award. The agency’s decision ended LIHI’s immediate control of the $3 million that had been tied to the youth-detention-center site, though contract documents and the formal mechanism for rescission have not been released publicly.

LIHI leader Lee pushed back, saying she will press KCRHA’s governing board over what she calls overreach by Kinnison and Simms. Lee said she isn’t done fighting over the rescission, and she’s talking to KCRHA’s governing board about what she considers overreach by Kinnison and Simms. LIHI also emphasized that it has recent openings and active projects: LIHI just opened a new tiny house village in Tukwila and is working to site a new RV safe lot, with tiny houses, in West Seattle.

The funding move sits against a larger 2025 budget picture that referenced nearly $6 million for tiny house villages in Seattle: "The $3 million more than half the funding, nearly $6 million, LIHI worked to secure for tiny house villages in the Seattle’s 2025 budget." The other half of that allocation launched Olympic Hills, a new North Seattle tiny-house village that opened "last month" and was developed as a joint project between LIHI and Purpose Dignity Action’s CoLEAD program; CoLEAD provides temporary lodging and intensive case management to people with physical and behavioral health needs and will relocate its operation to the North Seattle village.

The dispute revives longer-running friction between LIHI and the authority: LIHI and KCRHA have long had a tense relationship, going back to the time of founding CEO Marc Dones, who frequently clashed with Lee over funding for her projects. That history frames Lee’s push to appeal the rescission and the names she has singled out at KCRHA.

Tiny houses remain central to local shelter strategy and client preference: "Tiny houses are small, freestanding, heated structures that provide shelter for one or two people. Unsheltered people often prefer tiny houses to other kinds of shelter because they provide privacy and a door that locks." With the $3 million reallocated to the Salvation Army and LIHI contesting the action, the practical question now is who will deliver low-barrier shelter capacity for the population targeted by the planned 60-unit site and how quickly those beds might be restored. Lee said, "We are going to continue to develop tiny house villages, because we know that the mayor is very supportive and we think there are going to be other opportunities for us.