From LA to Chicago to New York, Life-Saving Housing Programs Could Vanish Overnight Under Administration’s New Restrictions
Advocates are worried that a series of changes to the nation’s largest funding source for homeless services could cause hundreds of thousands of people to become homeless.
President Donald Trump’s administration has proposed significant revisions to the Department of Housing and Urban Development’s Continuum of Care grant program, which provides billions in funding for services and housing each year. In 2024, the program provided roughly $3.6 billion in funding to service and housing providers. The Trump administration has proposed allocating $3.9 billion for the program in 2025, but has also proposed a series of significant changes to how the money can be spent.
Under HUD’s latest Notice of Funding Opportunity, the agency said it will cap CoC expenditures on permanent supportive housing at 30%, down from its current cap of 90%. HUD also said it will prioritize applications from religious organizations, which it said were discriminated against under the Biden administration, and will prioritize work-and-treatment-first programs over Housing First programs.
These changes were made to comply with an executive order Trump signed that directs federal, state, and local governments to treat homelessness as a crime and a mental health issue.
The new requirements were also added at a time when homelessness continues to grow nationwide. As of 2024, more than 771,000 people were homeless in the U.S., a total that increased by 18% year-over-year, driven primarily by the lack of affordable housing.
“HUD’s decision to massively cut funding for proven solutions to homelessness and further delay much-needed funding comes at truly the worst moment for people suffering under the strain of a housing crisis,” Shaun Donovan, CEO of Enterprise Community Partners, told Invisible People in a statement.
“Homelessness is at record levels nationwide, and rather than investing in solutions that work, the administration is taking this moment to imperil the futures of hundreds of thousands and put added pressure on local communities and economies,” he added.
Advocates from 20 states have sued the administration to prevent the changes from occurring. Courts have halted previous attempts by the administration to withhold previously approved CoC funding, but it remains to be seen whether the lawsuit will be successful.
The changes HUD has proposed to the CoC program also threaten several local programs that are working to end homelessness. Here is a brief list of programs that could be cut if HUD’s changes to the CoC program remain in place.
Permanent Supportive Housing in LA
One of the most immediate impacts HUD’s proposed changes would have is a significant decrease in the amount of available funding for Permanent Supportive Housing, which has been one of the keys local governments have used to address homelessness over the last several years.
A housing partnership between the LA Homeless Services Authority and the LA County Department of Health Services, serving 344 households with co-occurring mental and physical health issues, would be on the chopping block if the changes are approved. The program allows participants to secure permanent housing, connect with case management, housing retention services, and purchase furniture for their new homes.
“Providers use a ‘Whatever it Takes’ approach, working in collaboration with the client to identify supportive services needs and develop an individualized service plan to maintain housing,” LAHSA wrote in its funding application.
Los Angeles is one of the few major cities in the U.S. to have seen an overall reduction in homelessness since the pandemic began in 2020, primarily due to its investments in rapid rehousing and permanent supportive housing.
According to the latest Housing Inventory Count, LA has increased its PSH stock by 28% up to roughly 37,000 units between 2019 and 2024. LA has also increased its rapid rehousing units up to more than 9,100 as of 2024, a 32% increase from 2019, according to the data.
More than 93% of the funds LA receives through the CoC grant program are allocated to renewal projects, meaning they support existing programs, according to HUD data.
Family Support in Chicago
Chicago saw a significant surge in family homelessness over the last few years, due in part to the migrant crisis that gripped the country between 2022 and 2023. Chicago welcomed more than 51,000 new arrivals from the southern border, according to city data, many of whom struggled to find housing in The Windy City.
There are multiple programs funded by CoC grants that work to provide services and housing for homeless families in Chicago. One of which is Housing Opportunities for Women, a nonprofit that has provided wraparound services and housing since 1983.
HOW received more than $7 million in 2023 from the CoC grant program, according to HUD data. Those funds were distributed to support programs ranging from rental assistance to homeless shelter operations, and the organization’s “Family First” program. Family First provides homeless families living in shelters with housing opportunities and connects them with services that teach them basic life skills.
Several other homeless family support programs in Chicago could also see their funding cut because of HUD’s changes. For instance, the nonprofit Family Rescue could lose nearly $600,000 that it uses to operate the Ridgeland Apartments & Day Care Center, a facility that provides subsidized and permanent housing along with comprehensive support services for families with children.
Mental Health Services in New York
New York is one state that has significantly reduced the number of people with severe mental health conditions who are experiencing homelessness using its CoC allocations.
Between 2019 and 2024, the state reduced the population of unhoused folks with severe mental health issues from more than 15,400 to roughly 10,000, according to HUD data.
There are several programs that receive CoC funding in New York working to provide services and support for unhoused people with mental illnesses. For instance, the Postgraduate Center for Mental Health received nearly $3 million from the CoC program in 2024 to develop new housing for people with severe mental health challenges and provide supportive services.
The organization operates more than 1,500 housing units across five buildings licensed by the New York State Office of Mental Health, nearly half of which are permanent supportive housing units for people with mental health challenges and for elderly people escaping homelessness, according to the organization’s latest Form 990.
“In operating a full continuum of housing services…PCMH provides the homeless and those with serious mental illness the opportunity to realize greater independence with increasing and decreasing levels of monitoring and services,” the 990 says.
How You Can Help
Now is not the time to be silent about homelessness in the United States or anywhere else. Unhoused people deserve safe and sanitary housing just as much as those who can afford rent or a mortgage.
Poverty and homelessness are both policy choices, not personal failures. That’s why we need you to contact your officials and tell them you support legislation that:
- Streamlines the development of affordable housing
- Reduces barriers for people experiencing homelessness to enter permanent housing
- Bolsters government response to homelessness
Together, we can end homelessness.