On a hot August afternoon, Christie Sheffield sits in the shaded corner of a parking lot, in a wide-brimmed hat, waiting for the doors of Bend’s only walk-up overnight shelter to open. Near 6 pm, a line forms outside the door. Others sit quietly nearby. Some carry on conversations, some ride bicycles and play music through speakers as a trickle of battered cars pull into the parking lot.
It’s a familiar scene for Sheffield, who has spent the last year staying in homeless shelters across Central Oregon. She said she became homeless after a domestic violence incident several years ago. She deals with migraines, swollen ankles and other symptoms from an autoimmune disease. Bouncing between shelters hasn’t helped, she said.
“I’m here waiting for my SSDI,” or Social Security Disability funding, she said. “I don’t have another option right now.”
After the domestic violence incident, Sheffield went to Colorado before moving to Portland to study medical coding. That’s where she learned about a piece of legislation that will be key for homeless shelters across the state: HB3644.
The bill, passed in 2025, created Oregon’s Statewide Shelter System — the first dedicated source of state funding for homeless shelters. In just a few years prior to that, an influx of federal and state funding following the COVID-19 pandemic poured millions into the local shelter system. That helped open and sustain hundreds of new shelter beds, including the first permanent and walk-up shelters in Bend and Redmond, while pioneering new models including small shelter villages.
But poor state revenue forecasts and limited federal support have strapped funding for this new network of short-term and emergency housing. That’s left state and regional government leaders with tough decisions about how to prioritize the millions, and shelter providers with grievances and questions about how those decisions are — and will — be made.
“No one wants to hold this ball,” said Tammy Baney, executive director with the Central Oregon Intergovernmental Council. “It is really difficult to set up a continuum of services with decreasing funding and increasing need.”
Competitive process canceled
The duty of distributing those limited resources falls with the Central Oregon Intergovernmental Council, or COIC — a quasi-government agency that runs transportation, housing and workforce programs stretching across Jefferson, Crook and Deschutes counties. In early 2026, COIC was selected by the state as the regional coordinator for shelter funds through a competitive process.
At first, COIC created its own competitive process and encouraged shelter providers to apply for shelter funding. According to COIC, the process drew $12.4 million in total requests from shelter providers — $2.6 million more than what had been allocated in this year’s round of funding. A review team of two people — one COIC staff member and another from the Central Oregon Health Council, according to public records obtained by the Source — then scored the applications in July based on criteria including shelter experience, design and operations, consistency in data reporting, cost reasonableness and readiness.
But later, that process was canceled.
In a notice to providers on July 29, COIC cited direction from the state’s social service agency, Oregon Housing and Community Services, to allocate funding for existing shelter beds rather than fund new ones.
Baney, COIC’s executive director, told the Source she and other staff thought there would be enough money left over to give out to shelters not already funded by the state. But once the applications from existing shelters were tabulated, there wasn’t anything left, according to Baney.
“Oregon Housing and Community Services requires COIC to prioritize sustaining the region’s existing shelter network with available Statewide Shelter Program funding,” COIC wrote in the cancellation notice to applicants.
COIC was tasked with maintaining the 395 shelter beds across the region funded during the program’s first year in 2025, according to COIC.
Left out
Since 2023, a bulk of the funding that stood up Central Oregon’s homeless shelter system came from emergency executive orders issued by Gov. Tina Kotek. That pushed nearly $15 million to the region to tackle homelessness. A subcommittee of service providers through COIC helped prioritize which shelters to fund. But the money covered more than just shelter beds. It also funded street outreach and provided money to move people back into housing.
Some non-traditional shelter programs, like safe parking, capitalized. With safe parking, churches, nonprofits and others can open parking lots and properties to people living in cars or RVs, who then receive case management services at the site. The cities of Bend and Redmond have both expanded their definitions of safe parking sites to include a handful of individual tiny shelters.
Under the previous emergency order funding, safe parking programs could receive funding allocated for street outreach, said Rick Russell, director of Mountain View Community Development, the region’s largest safe parking provider. But with that funding out of the picture, the nonprofit was mostly shut out from this year’s round of shelter funding, aside from money for nine safe parking units.
That’s despite Mountain View’s safe parking programs receiving some of the highest scoring marks before COIC canceled the evaluation process.
“It’s disappointing because we know this works,” Russell told the Source. “We were ready for a competitive process that prioritized utilization and rehousing. To have the RFA suddenly canceled was a shock to us, because we had been preparing for that for six months.”
The nonprofit runs 59 safe parking spaces across Central Oregon. Due to lack of funding, Russell said he plans to close 22 safe parking sites in Redmond. They’ve already begun furloughing staff and reducing spaces, Russell said.
A July 1 memo obtained through a public records request shows COIC was set to award Mountain View about $263,000 based on performance. Now the nonprofit won’t get any of that.
Saving Grace, a 20-bed, low-barrier shelter in Bend tailored to domestic violence survivors, was also slated to receive $250,000 before the process was canceled. Central Oregon Villages, a nonprofit running 32 tiny shelter units in Bend, also missed out on a little more than $200,000. Executive Director Scott Jones told the Source via email he was “very disappointed” in the funding strategy.
Apples to oranges
According to the July 1 memo, more than $5 million in shelter funding is slated to go to Shepherd’s House, the largest provider of shelter beds in Central Oregon.
Baney, of COIC, said the state’s requirements are to maintain the nonprofit’s 212 beds across two shelters in Bend and one in Redmond. Two are set up as “navigation” centers, meant to guide people to resources while also providing a safe place to sleep. The shelter program will only fund the beds, not the other support, Baney said.
Under the state’s shelter program, these large congregate facilities are classified as “basic overnight” shelters rather than “housing-focused” shelters. Housing-focused shelters put a greater emphasis on connecting people to housing. For people staying there, the difference in result is huge. According to data compiled by COIC and submitted in a report to the state, a little more than 51% of people who leave housing-focused shelters go on to permanent housing, while that’s the case for just 5% of people leaving overnight shelters.
But comparing the two is like apples to oranges, said Eliza Wilson, board chair of the Homeless Leadership Coalition, a federally designated service coordination group in Central Oregon.
“Some of the larger shelters that are congregate shelters, those are really about getting people inside, getting them safe,” Wilson told the Source. Those shelters are also strictly low-barrier, meaning sobriety and enrollment in programs isn’t a prerequisite for entry. Meanwhile, smaller programs can have more barriers for people. “You see more intensive case management in those smaller programs, which is why you have greater housing outcomes.”
Data from a City of Bend dashboard tracking shelters supports this. At Central Oregon Villages, an individual tiny shelter site, 16 people transitioned to housing out of 46 people served so far this year. At the Lighthouse Navigation Center, run by Shepherd’s House, 22 people moved into housing out of 760 people served.
And sometimes, the success of each shelter is linked, Wilson said. A person might stabilize at a large overnight shelter before moving into a smaller site with more intense programs, and then to housing.
Wilson said this recipe has been successful at curbing homelessness, evidenced by the 17% drop in the number of people counted as homeless from 2025 to 2026.
“I think there’s a lot of work that can be done in the system to improve, but we’ve come such a long way,” Wilson said.
Future uncertainty
According to Baney, next year could look different for the state’s shelter program — not only in the amount of funding for Central Oregon, but in how it’s allocated.
The state set aside a little more than $200 million to distribute across Oregon for the current fiscal year. But according to local officials, state budget presentations have indicated that will be half as much next summer.
At the same time, Baney anticipates the state will move toward more accountability for the program. That could mean a cap on the cost per bed for shelters, a greater tie to performance metrics and a requirement that 20% of shelter funding comes from local sources.
Each of those comes with uncertainties. Some rural providers, like in Madras and Prineville, are just getting their shelter programs off the ground, and are facing higher costs or operational challenges, leaving a question as to whether they’ll be able to meet the program, Baney said.
Putting more requirements on the program will also present a challenge for COIC, Baney said. If the state does put in place more requirements tying funding to housing outcomes, it will require more funding for both case management and more construction of housing.
Baney called that a “double whammie the state will need to reconcile.”
Rep. Emerson Levy (D-Bend) was one of the sponsors of HB3644, which created the state’s new shelter system. In a statement, Levy wrote that funding should prioritize youth and families, but not necessarily one type of shelter over another.
“We should fund what is working, and what works will look different in each county across the state,” Levy said. “A one-size-fits-all approach to shelter funding does not reflect the needs of Oregon communities. We need to preserve the flexibility to invest in the resources that are proven to work locally and help people transition into stable housing.”
This article appears in the Source August 20, 2026.
MAKE LOCAL JOURNALISM HAPPEN
Republish our articles for free, online or in print, under a Creative Commons license.
