For weeks, California’s homeless service providers have worried about rumors that the federal government was going to cut funds for permanent housing.
Now, those cuts are here. Shortly after the federal government reopened, the U.S. Department of Housing and Urban Development issued a policy change that will shift the majority of federal homelessness funds away from permanent housing and into temporary shelter.
Each jurisdiction applying for a piece of about $4 billion in federal homelessness funds during the 2025 fiscal year can now spend no more than 30% of their grant on permanent housing. That’s a major change. For years, the federal government and California cities and counties have prioritized permanent housing as the long-term solution to homelessness. Los Angeles County, for example, dedicates more than 80% of its federal funds to permanent housing.
President Donald Trump’s administration instead wants cities and counties to focus on temporary shelters that get people off the streets quickly, and on programs that require people to participate in addiction treatment.
Scott Turner, HUD Secretary: “We are stopping the Biden-era slush fund that fueled the homelessness crisis, shut out faith-based providers simply because of their values, and incentivized never-ending government dependency.”
The National Homelessness Law Center says these changes will force about 170,000 people nationwide out of subsidized housing and back onto the streets.
Jesse Rabinowitz, spokesperson: “Trump’s approach towards homelessness will worsen the lives of most people, waste taxpayer money, and instead direct taxpayer dollars towards debunked, disproven, and failed approaches to homelessness.”
The new policy also attacks organizations’ diversity and inclusion efforts; support of transgender clients; and use of “harm reduction” strategies that seek to reduce overdose deaths by helping people in active addiction use drugs more safely. Federal funds cannot be used for projects that further any of those efforts.
(From CalMatters homelessness reporter Marisa Kendall)
