The Trump administration issued — and then rescinded — a funding notice advocates warn will spike homelessness. Uncertainty persists.
Federal housing officials backpedaled Monday on a recent policy change that advocates warned would drive more than 170,000 people into homelessness.
U.S. Housing and Urban Development officials sent advocates into a panic last month after announcing they would overhaul how federal funding gets distributed under the agency’s Continuum of Care program, a key federal program that historically has supported permanent housing for people at imminent risk of homelessness.
The change, which would have shifted funding to transitional housing and conditioned aid on work and other requirements, prompted several lawsuits, including one filed by New Jersey and 19 other states.
Just an hour before a court hearing Monday in Rhode Island on the lawsuits, HUD officials rescinded the funding notice that sparked the uproar, citing a need for unspecified revisions.
Taiisa Kelly, CEO of Cranford-based Monarch Housing Associates, welcomed the reversal, saying it will give local housing advocates time to plan and develop both short- and long-term solutions to HUD cuts that they still expect despite Monday’s turnaround.
“As we wait to see what comes of the litigation against HUD, we continue to push for bridge funding for programs set to expire starting January 1 to ensure no person loses their housing,” Kelly said. “HUD continues to indicate that they will move forward with their proposed policy changes even with the pull back of this (funding notice) so we continue efforts to find long-term funding for programs that are at risk.”
New Jersey gets $66 million a year from the Continuum of Care program, 81% of which pays for permanent housing, according to the New Jersey Department of Community Affairs. The state would lose at least half of that under the notice HUD withdrew Monday. Such a loss could drive 2,439 New Jersey residents into homelessness, the National Alliance to End Homelessness warned.
New Jersey officials, though, had predicted worse harm, saying the change put more than 3,000 people at risk of immediate homelessness and would cost the state $173 million over two years in lost program funds and related repercussions. That would mark a 22% jump in homelessness from the almost 14,000 people counted as homeless during last January’s HUD-mandated annual enumeration of homelessness.
Despite applauding HUD’s backtracking, local advocates say they still don’t know exactly what changes HUD will settle on, and that uncertainty creates more stress for struggling families.
“Already this process has thrown people — who were formerly homeless and are now terrified of losing their housing after finally getting stabilized, as well as homeless service providers who are trying to figure out how to respond — all into chaos,” said Raisa Rubin-Stankiewicz, a policy associate with the New Jersey Coalition to End Homelessness.
The HUD hubbub came after President Donald Trump announced in a July executive order that his administration would take a different approach to reducing homelessness. He rejected housing-first policies, which get a person into permanent housing before addressing their addiction, unemployment, or other troubles.
HUD had promoted that approach for over a decade, but Trump administration officials complained it encourages “dependence on endless government handouts” while not addressing the root causes of homelessness.
Trump has threatened to withhold funding from applicants who persist with housing-first policies. He also ordered mandatory treatment for people whose mental illness or addiction contributed to their homelessness and directed law enforcement to crack down on homeless encampments, loitering, squatting, and open drug use.
It’s unclear when HUD will issue a revised funding notice; the rescinded notice had set a Jan. 14 deadline for funding applications. HUD officials haven’t released a new timeline or explained what further revisions they have in mind.
That leaves providers with a rapidly closing window in which to apply for funding, and that could create a gap in services, Rubin-Stankiewicz said. Officials should postpone funding changes a year, rather than risk a funding gap, further confusion and chaos, and a spike in homelessness, she added.
“You can’t play with people’s lives like this,” Rubin-Stankiewicz said.
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