Sue Lani Madsen: Housing first, paid last

It started out as the story of small business driven to edge of bankruptcy by bureaucratic delay. Daniel Klemme, his business partner Dane Jessen and their company Housing Navigator SPC are carrying $106,135.72 past due from the city of Spokane for their work in helping shut down Camp Hope.

The challenge is getting cash flowing again before Klemme and Jessen find themselves homeless. “We gave up everything to do this. Now I can’t pay my rent and am being evicted,” Klemme said.

Klemme formed Housing Navigator in April 2022 as a social purpose corporation, a for-profit company with a social benefit mission. For Klemme that mission is to make affordable housing profitable, sustainable, equitable and achievable. He almost succeeded. He still has hope.

Klemme and Jessen have retained an attorney. When asked about the late payments, a spokesperson for the city said they are “unable to comment due to the risk of litigation.” There’s no shortage of potential scapegoats. There are leaders with bucks stopped on their desks. Midlevel bureaucrats managing uncoordinated contracts, with inevitable conflicts.

And then there is the disruptor. Housing Navigator developed a business-based template and “worked with private market landlords to house people they would never otherwise accept,” Klemme said. “We put people into long-term housing with their names on the lease and that’s hugely satisfying.”

Housing Navigator is doing things differently. Meanwhile, Spokane’s nonprofit homeless industrial complex has been doing homeless response the same way for a decade and is now in the top 20 nationally in rates of homelessness per capita.

Something is definitely wrong.

Let’s start at the top. Former Mayor Nadine Woodward was criticized for staff turnover at City Hall, particularly among the Housing and Human Services department. Mayor Lisa Brown was criticized for a conflict of interest in her position as head of the Department of Commerce, where she served until March 2023. Distributing Right of Way Initiative money for Camp Hope looked like laying the groundwork for a run for mayor.

Housing Navigator put together a proposal in the summer of 2022 to house residents of Camp Hope, working with then-Spokane County Sheriff Knezovich. It put them on the wrong side of the table from the Brown team. Commerce signed a contract with Empire Health Foundation to administer Right of Way funds in September 2022 to a group of subcontractors that did not include Housing Navigator.

Seven months later with Commerce funding lined up, the City Council approved a contract with Housing Navigator, except that “$150,000 will be pulled and go to Empire Health Foundation for supportive services” including “case management and data entry into CMIS for this project.”

Klemme had no objection to giving up data entry responsibility. He was told there was a backlog of requests for access to the content management information system, and it made sense to have Spokane Low Income Housing Consortium handle it. The consortium already had the software and expertise.

Housing Navigator’s April 1 contract called for finding places for 30 Camp Hope residents. Then at the end of July, the council presented Housing Navigator with a contract amendment backdated to July 1, splitting the budget between two fiscal years, changing the performance target to 15 per year and extending the contract through 2025.

Housing Navigator placed Camp Hope residents referred by Spokane Low Income Housing Consortium, a subcontractor to Empire Health. Klemme says they placed 19 households, still within budget, and advised the city of 10 additional vacancies lined up.

Housing Navigator provided move-in kits and paid rent and utilities up front, expecting reimbursement, eventually.

Then things got weird. A Nov. 3 email thread from city staff directed Klemme to “phase out any units over 15 as soon as possible” and that “typically exceeding outcomes is viewed as positive but for reasons beyond my understanding, the number of units you may secure under the grant is capped at 15” based on guidance from Commerce staff.

“I couldn’t believe I was being asked to unhouse people,” Klemme said.

Then on Dec. 4, Interim City Manager Garrett Jones canceled the Housing Navigator contract effective Jan. 9 referencing a “failure to report data.” It echoes a Nov. 11 letter from housing consortium executive director Ben Stuckart to Empire Health and the city claiming concerns with Klemme skipping meetings Stuckart described as necessary to ensure the consortium had data to enter.

In separate emailed statements, Empire Health spokesperson Laura Martin said they and their subcontractor weren’t responsible for Housing Navigator data entry. Stuckart’s email said “SLIHC’s contract with the Right of Way project included ensuring that folks staying in HN units were correctly entered in CMIS.” It can’t be both.

The Spokane Low Income Housing Consortium is in position to take over the canceled Housing Navigator contract.

In spite of the drama, Klemme still has a list of landlords willing to house people today in a collaborative public-private partnership. “We’ve had incredible support from people who believe in this concept,” Klemme said. “In a context where everyone was saying there are no open units, I found them. The dominant narrative says there is no permanent housing and we broke the narrative.”

Contact Sue Lani Madsen at rulingpen@gmail.com.