The city of Seattle will penalize homeless service providers that failed to meet housing goals in the second quarter of this year. That's according to a letter sent to providers in May. More than $30 million in contracts were competitively bid last year as part of a big shift in the city’s approach to homeless services. Those contracts hold certain programs – like emergency shelters, transitional housing projects and permanent supportive housing – to performance standards, meaning they have to get a certain percentage of clients into permanent housing every quarter. If programs fall short they can lose three percent of their funding per quarter. Providers were given a pass on the performance standards in the first quarter of this year. But now, the honeymoon period is over.

The letter sent from the city's Human Services Department in May said that more than half of the shelter and housing programs are meeting the standards. Based on this fact, the department said, it would begin enforcing those standards in the second quarter. Daniel Malone, the executive director of the Downtown Emergency Services Center (DESC), said the city’s overhaul of homeless services makes sense — but he's concerned that without available housing, providers won't be able to make their targets. “I think everybody is on board with the idea that a housing-focused system is the right kind of system to have,” he said. Malone also said accountability for the use of public funds is important. But Malone said there's a massive bottleneck without enough housing resources. Providers are able to get some people from shelters into housing, just not at the rate everyone wants to see. "The trick here is that you can do everything exactly right," Malone said, "and if the housing still isn't there then you're kind of unable to meet the expectation at that point."

A reduction in funds could then lead to reduced services, Malone said. He could not immediately provide information on whether any of DESC’s programs failed to meet housing goals in the second quarter of 2018. Catholic Community Services, another provider, said most of their programs hit housing targets in the second quarter. Two of their shelter programs did not. They said a lack of appropriate housing is one of the major reasons why. After analysis of first quarter results, the city has exempted shelters serving people during the day only from having to meet housing goals. City officials say they're reviewing program data from the second quarter and will see if anything needs to change. In a statement, Jason Johnson, the interim director for the Human Services Department, said the city is working with providers to serve the growing homeless population. “The City is keeping a close eye on both the results of the funds we are investing and the crisis at hand," Johnson said.