President Donald Trump’s proposed budget includes cuts to U.S. Department of Housing and Urban Development programs that advocates warn could jeopardize funding for permanent supportive housing and temporary homelessness assistance programs that are already underfunded.
The changes would reduce the overall amount of funding available for HUD’s homeless assistance programs by $532M from the 2025 fiscal year and put hundreds of thousands of people at risk of becoming homeless again, advocates say.
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The number of people experiencing homelessness in America has increased and reached new record levels in 2023 and 2024.
“We know that these programs have been chronically underfunded for decades,” National Alliance to End Homelessness CEO Ann Oliva said in a report on the effects of the proposed changes.
“This proposal represents the single greatest retreat from the federal government’s responsibility to end homelessness since the passage of the McKinney-Vento Act,” Oliva said, referring to the 1987 federal law considered the first legislative response to homelessness at a national level.
The system of distributing federal funds for homelessness has received some criticism from those it aims to help. Over the years, some cities have reported issues with the complexity and bureaucracy attached to the funding and have blamed those complexities for occasions in which they had to return millions of dollars in unused funds to the federal government.
Among the proposed changes contributing to this anticipated turmoil is the proposed defunding of a HUD program called Continuum of Care. Through this program, regions across the country — called continuums of care — compete for funding for their homelessness programs.
Permanent supportive housing, or affordable housing that includes rental assistance plus access to service providers for residents, is among the services and programs that receive funding through and from the current system.
Many jurisdictions rely heavily on federal funding to help pay for permanent supportive housing in their areas. Forty-five percent of all the continuums across the country rely on the federal program to fund about half of their permanent supportive housing beds, the Alliance found.
In Louisiana, Missouri, Ohio and Maine, 70% or more of their permanent supportive housing beds are funded through the federal program, according to Alliance research.
But eliminating funding for the Continuum of Care Program would “effectively end funding for more than 166,000 units of Permanent Supportive Housing,” according to the Alliance, jeopardizing the housing status of those people and putting them in danger of becoming homeless again.
The Alliance estimates that current housing placements for approximately 218,000 formerly homeless people could be ended or severely disrupted by the changes proposed to the Continuum of Care Program.
The Trump administration has proposed other cuts to Section 8 and other critical rental assistance programs nationwide, to the dismay of landlords that rely on the program to pay their tenants' rent. The Trump administration’s budget proposal aims to effectively eliminate the Section 8 rental assistance program as well as other housing-focused safety-net programs.
Landlords with Section 8 tenants are, in some cities, already running out of funds as they wait to find out the fate of funding for the program.
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