Trump administration abandons decade-old federal approach of housing first, seeks to redirect homelessness funding: ‘Failed ideology’

A U.S. appeals court in Boston has cleared the way for the Trump administration to move forward with a major overhaul of a $4 billion federal homelessness program. It also pauses a previous ruling from a Rhode Island-based federal judge who had blocked the changes earlier this year. Per The Hill, the development marks a significant shift in how the government handles funding for homelessness.

According to Reuters, this program has been a cornerstone of federal support since 1987, providing resources to states, local governments, and nonprofits. These entities have used the funds to assist veterans, families, and individuals with disabilities. The program has historically operated under a housing-first model, which prioritizes placing individuals in permanent housing without requiring preconditions like sobriety or employment.

Per the Missouri Independent, the Department of Housing and Urban Development (HUD) argued that current policies are simply not working, pointing to rising rates of chronic homelessness since 2013. So, the administration is now pushing to provide more money to localities that focus on treatment-first policies. This includes an emphasis on sober living, increased cooperation with law enforcement, and a preference for temporary or transitional housing. 

Reworking the strategy

Per The Hill, the 1st U.S. Circuit Court of Appeals panel wrote, “After careful review of the parties’ briefs and supplemental submissions, we conclude that HUD [Department of Housing and Urban Development] has met its burden to show its entitlement to a stay pending appeal.” The panel also noted, “HUD has made a strong showing that it is likely to succeed on the merits of its challenge to the district court’s holding that the set-aside in the NOFO [Notice of Funding Opportunity] was subject to notice and comment requirements.” 

Under the new plan, the agency reportedly aims to change the bonuses it provides to participants in the Continuum of Care program. The goal is to incentivize services that concentrate on improving employment income and meeting behavioral healthcare needs. 

This shift aligns with broader efforts by the administration to prioritize addiction recovery services and closer partnerships with law enforcement agencies, per the Missouri Independent. HUD has highlighted cities like Houston, Anchorage, Portland, and San Francisco as examples of places already shifting toward public camping restrictions and treatment-based models. In fact, last year, the administration cleared Washington’s homeless camps by contrasting this option with jail.

The outlet noted that various states and advocacy groups were against this change. A coalition of 22 states and the District of Columbia, along with organizations like the National Alliance to End Homelessness and the National Low Income Housing Coalition, filed lawsuits to stop the changes. These plaintiffs argue that the move would harm vulnerable populations. 

In a joint statement provided to Reuters, the plaintiffs said, “Despite our coalition’s repeated triumphs in the lower court, today’s decision will give new life to HUD’s attempt to radically upend this critical program by defunding permanent housing solutions, which threatens to push 100,000 Americans into homelessness.”

The administration’s move specifically involves setting aside $1.3 billion of the $4 billion in total program funding for transitional housing and supportive services. On X, HUD Secretary Scott Turner defended the change, per the Hill. He wrote, “This is a step in the right direction to deliver real and lasting results that serve our most vulnerable — not a failed ideology and those who profit from it.” He also described the ruling as a “win for taxpayers.”

The Missouri Independent reported that advocacy groups argue housing-first was a data-based strategy. The National Low Income Housing Coalition pointed to a 2020 review of 26 studies, which found that housing-first programs decreased homelessness by 88% and improved stability by 41% when compared to treatment-first alternatives. It should be noted that for many people, there is a fundamental misunderstanding of what homelessness means.

These groups reportedly argued that the housing-first model is a proven, bipartisan strategy that reduces the long-term strain on emergency services and the criminal legal system. Now, with the order in place, the plaintiffs are evaluating their next steps. The appellate court noted that HUD has until December 1, 2026, to finalize awards for the Continuum of Care funds.