Trump Budget Cuts $4 Billion Housing First Program

By David Thornton Columbus, OH · LOUISVILLE —

Published Updated 4 min read

The Trump administration proposes eliminating the $4 billion Continuum of Care program to end Housing First policies. A study estimates this shift could increase homelessness by 44,590 people within one year.

LOUISVILLE — The Trump administration is moving away from the “Housing First” approach to addressing homelessness. President Donald Trump signed an executive order last year calling for an end to federal support for Housing First policies.

The administration’s proposed budget would eliminate the federal initiative that primarily funds Housing First programs. This includes cutting the $4 billion Continuum of Care program.

The administration supports a “Treatment First” model, which emphasizes short-term transitional housing for up to two years with mandatory treatment for addiction and serious mental illness. A spokesperson for the Department of Housing and Urban Development said in an email that “Housing First has failed our most vulnerable and enabled addiction.” The spokesperson added that “HUD’s proposed reforms seek to address the root causes of homelessness and advance recovery, self-sufficiency, and competition that drives accountability.”

A coalition of local governments and homeless advocacy groups filed a lawsuit after HUD attempted to alter homelessness grants to align with the administration’s policy preferences. A federal judge initially ruled in favor of the coalition, but this month an appeals court allowed the administration to proceed with awarding the grants.

According to an estimate by the U.S. Department of Housing and Urban Development, nearly 750,000 people were homeless in the U.S. last year. The national homeless population saw a slight decline from 2024, though it has risen 31% since 2019.

About one-quarter of homeless individuals are considered chronically homeless, defined as having a disability and experiencing homelessness for at least one year or repeated episodes over time. The share of the homeless population classified as chronically homeless has increased since 2019.

Studies indicate that around half of homeless adults live with a disability. Up to two-thirds have a mental illness, and 2 in 5 struggle with substance use disorder. Homeless individuals also experience rates of heart disease and diabetes two to three times higher than the general population.

Permanent supportive housing provides long-term apartments along with voluntary support services. Research consistently shows Housing First programs help maintain stable housing. Some studies suggest these programs outperform models like Treatment First in keeping people housed, though findings on health outcomes under Housing First have varied.

In 2024, the Continuum of Care program funded 6,500 projects. Over 60% of its funding that year went to permanent supportive housing, mostly to sustain ongoing initiatives, while 1% was allocated to transitional housing.

Planned housing developments have been canceled in Corbin, Kentucky. In Santa Cruz County, California, fewer housing options are now available for homeless residents. Nonprofits in Louisville are exploring converting some permanent units into temporary housing. St. John Center is considering changing the status of most of its 200 apartments from permanent to temporary.

In Santa Cruz County, individuals losing pandemic-era emergency housing vouchers are being prioritized for limited housing openings. Because of this prioritization, the county cannot assist as many currently homeless people as before.

Ra’Shann Martin, executive director of St. John Center, said in an interview that “Housing is healthcare.” She added that “The longer people stay unhoused, the more fragile they become.” Jennifer Clark, CEO and executive director of St. Vincent de Paul Louisville, said in an interview that “If you want to gradually work on reducing social services that are funded by the federal government, OK.” Clark added that “But you cannot make a huge sweeping change and big cuts and take an ax to everything and think that there aren’t going to be consequences for some people who are really in need.”

Why It Matters

The shift from Housing First impacts a federal program that funded 6,500 projects in 2024, most of which supported permanent supportive housing. A study published in the PMC estimated that ending federal backing for Housing First could result in 44,590 more people becoming homeless within one year.

The Housing First model was developed by a New York nonprofit in the 1990s and became federal policy under the George W. Bush administration in 2004, according to a 2020 Heritage Foundation analysis. The HEARTH Act of 2014 made the Continuum of Care program law, establishing it as a key part of federal efforts to rehouse homeless individuals quickly and with minimal trauma, and it has remained central to federal homelessness strategy since then.

Timeline

The Housing First model originated with a New York nonprofit in the 1990s. It has been a core part of federal homelessness policy since 2013. In 2024, the Continuum of Care program provided funding to 6,500 projects.

More than 60% of Continuum of Care funding in 2024 supported permanent supportive housing, largely to continue existing programs. Only 1% went to transitional housing. President Donald Trump signed an executive order last year calling for an end to federal support for Housing First. Nearly 750,000 people were homeless in the U.S. last year, according to a U.S. Department of Housing and Urban Development estimate. The overall homeless population declined slightly from 2024.

What's New

The Trump administration issued an executive order directing federal agencies to stop funding organizations that provide housing without requiring treatment for substance abuse or serious mental illness, representing a clear departure from the Housing First model. The 'Housing First' approach was first created in the 1990s by the New York nonprofit Pathways to Housing and later became a central element of federal homelessness policy through the HEARTH Act of 2014. According to a 2020 Heritage Foundation analysis, the model was pioneered in the 1990s and adopted as federal policy in 2004 under President George W. Bush. In Santa Cruz County, officials warned that losing permanent supportive housing funds would worsen challenges already emerging from the expiration of pandemic-era emergency housing vouchers.

fact_check Facts

The Trump administration is shifting federal policy and funding away from the "Housing First" approach.
HUD, Department spokesperson
"Housing First has failed our most vulnerable and enabled addiction."
President Donald Trump signed an executive order last year calling for an end to federal support for Housing First policies.
The Trump administration's proposed budget for fiscal 2027 calls for eliminating the federal initiative that primarily funds Housing First programs.
The Trump administration favors a "Treatment First" approach and short-term transitional housing lasting up to two years, during which residents are required to undergo treatment.
The proposed budget calls for eliminating the $4 billion Continuum of Care program.
In 2024, the Continuum of Care program awarded money to 6,500 projects.
In 2024, more than 60% of Continuum of Care funding went to permanent supportive housing, mostly to continue existing efforts.
In 2024, 1% of Continuum of Care funding went to transitional housing.
A consortium of local governments and advocates for homeless people sued after HUD attempted to rework homelessness grants to fit the administration’s preferred policies.
A federal judge ruled in favor of the consortium of local governments and advocates.
An appeals court ruled this month that the administration could proceed with awarding grants.
Planned housing projects have been scrapped in Corbin, Kentucky.
Less housing is available for homeless people in Santa Cruz County, California.
Nonprofits in Louisville are considering converting some permanent housing to temporary housing.
St. John Center is considering making most of its 200 apartments temporary rather than permanent.
Santa Cruz County officials, County officials
In Santa Cruz County, officials stated that losing permanent supportive housing funds would exacerbate problems caused by the winding down of pandemic-era emergency housing vouchers.
People set to lose pandemic-era emergency housing vouchers in Santa Cruz County are being prioritized for available housing.
Due to voucher prioritization, Santa Cruz County cannot assist as many currently homeless individuals.
Ra’Shann Martin, Executive director, St. John Center
"Housing is healthcare."
James Myers
"I mean, the streets will beat you down, and I think they put a few years on me."
Devon Kurtz, Director of public safety policy, Cicero Institute
"That is the biggest difference between Housing First and not Housing First."
Johnny Henderson, 71, has one arm, heart disease, and vision problems.
Johnny Henderson slept on the street the night before being observed at the St. John Center men’s day shelter.
Johnny Henderson survived a train accident that resulted in the loss of an arm and led to a yearslong opioid addiction.
Johnny Henderson has recently dealt with heart disease, an eye problem, spinal surgery, and auditory hallucinations.
James Myers, 66, is blind, has congestive heart failure, and is undergoing treatment for prostate cancer.

menu_bookBackground & Sources

Context and data our newsroom added to the originating report, with the primary source for each item shown below it.

Permanent supportive housing consists of long-term apartments paired with voluntary services.
Studies have consistently shown that Housing First programs keep people stably housed.
Some research indicates Housing First programs perform better than other models, including Treatment First, at maintaining stable housing.
Treatment First favors mandatory services for addiction and serious mental illness.
Research findings on health outcomes for Housing First programs have been mixed.
The Housing First model was pioneered by a New York nonprofit in the 1990s.
Housing First has been central to federal homelessness policy since 2013.
Nearly 750,000 people were homeless in the U.S. last year, according to a U.S. Department of Housing and Urban Development estimate.
The U.S. homeless population decreased slightly from 2024.
The U.S. homeless population increased 31% from 2019.
Approximately one quarter of the homeless population is considered chronically homeless.
Chronically homeless individuals are defined as having a disability and experiencing long-term or repeated episodes of homelessness lasting at least one year.
The portion of the homeless population considered chronically homeless has risen since 2019.
Research shows roughly half of homeless adults live with a disability.
Research shows up to two-thirds of homeless adults have mental illness.
Source: doi.org
Research shows 2 in 5 homeless adults have substance use disorder.
Rates of disability, heart disease, and diabetes among homeless people are two to three times higher than in the general population.
Research titled "12 Housing Policy in the First Trump Administration: 2016–2020" was published in 2026 in Housing.
Source: doi.org
The HEARTH Act of 2009 explicitly required HUD to balance strategies for homeless individuals, families, and subpopulations, but federal funding shifted heavily toward Housing First programs, with 74% of HUD competitive grants allocated to permanent supportive housing as of 2020.
HUD Secretary Ben Carson, under the Trump administration, proposed reclassifying Treatment First as a 'proven strategy' to redirect funding from Housing First programs, as outlined in a 2020 Heritage Foundation policy paper.
The 'Housing First' model was originally developed in the 1990s by a New York nonprofit, the Pathways to Housing, and later became a central component of federal homelessness policy under the HEARTH Act of 2014.
In 2026, a federal court ruled in favor of local governments and homeless advocates in a case challenging HUD’s proposed changes to homelessness grants, citing violations of the Administrative Procedure Act.
Source: hhs.gov
The 'Housing First' model was pioneered by a New York nonprofit in the 1990s and became federal policy under the George W. Bush administration in 2004, according to a 2020 Heritage Foundation analysis.
A 2026 study published in the PMC estimated that ending federal support for Housing First programs could lead to an increase of 44,590 people experiencing homelessness within one year.
Source: hhs.gov

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