The Trump administration’s new approach to homelessness could have significant consequences for those in permanent supportive housing programs, in part by implementing a funding cap and defunding occupied units in local communities. It’s a move that threatens “to push hundreds of thousands of people onto the street as cold winter months arrive,” according to the National Alliance to End Homelessness.
It also threatens millions in federal funding to Denton County agencies such as Denton County MHMR, Denton County Friends of the Family and Giving Grace. They offer permanent supportive and rapid rehousing programs with the capacity to house hundreds of chronically homeless individuals — both adults and children — some with disabilities and others who are survivors of domestic violence.
In a state-level analysis, NAEH reported that the Department of Housing and Urban Development's proposed rule changes could cause nearly 9,700 people to lose housing statewide due to the loss of $114.5 million in funding for programs that provide permanent housing in Texas.
“If the changes are enacted as proposed by HUD, these changes could have a negative impact on the aging and disabled population,” Denton County MHMR CEO Pam Gutierrez said in a Monday email to the Denton Record-Chronicle.
The NAEH joined a coalition of 20 states, nonprofits and local governments filed a lawsuit in early December to prevent HUD from implementing the new rules. Two weeks later, they received a preliminary injunction that temporarily blocked the implementation of HUD’s new rules.
HUD stated it wouldn’t implement or enforce the new rules pending further court order yet encouraged service providers to review them, according to a Dec. 29 email from Jesse Kent, the city’s director of community services, to the Denton Record-Chronicle.
Kent pointed out that HUD intends to make resources available in a timely manner “so grantees with measurable results can continue to support vulnerable populations” yet also “remains fully committed to long overdue reforms to its homelessness assistance programs.”
“This implies that future [Notice of Funding Opportunities] may seek to implement similar changes to those listed in the November notice,” Kent added.
On Monday, Kent said HUD had indicated in a Dec. 30 court filing that it intended to reopen the notice on Tuesday, Jan. 6, and likely make new awards in May.
"Unfortunately, there is a lack of clarity on what’s going to happen with funding, we’ll be awaiting further guidance from HUD and from THN to see what happens," Kent wrote in a follow-up email Monday.
Overnight changes
The changes would impact the continuum of care program, which is HUD’s primary competitive grant program. It funds local homeless response systems and helps the local agencies move people away from homelessness to housing with supportive services, according to the Texas Homeless Network.
Texas has some of the largest continuum of care programs in the country that rely heavily on permanent supportive housing and rapid rehousing “as the foundation of their homelessness response systems,” dedicating between 81% and 92% of their funding to permanent housing models, according to the Texas Affiliation of Affordable Housing Providers.
In November, HUD issued a new notice during a two-year grant program that outlined changes to limit funding to permanent supportive and rapid rehouse programs, instead focusing on transitional housing. They would also give HUD the ability to reject programs that engage in “racial preferences” or in activities that “violate the sex binary in humans.”
HUD required all agencies to reapply for the grant program to align with the Trump administration’s new approach to homelessness and made several changes in how the funds would be awarded.
HUD’s funding goals now seek to end the “crisis of homelessness on our streets” by prioritizing treatment and recovery, advancing public safety, promoting self-sufficiency, improving outcomes and minimizing trauma.
Previously, those goals included ending homelessness for all persons; using a housing-first approach; reducing unsheltered homelessness; partnering with housing, health and service agencies; and improving assistance to LGBTQ+ individuals.
Community Solutions, a national nonprofit working to end homelessness, warned in a Dec. 11 news release that HUD's changes to permanent supportive housing “would force communities to defund occupied units, effectively evicting medically fragile older adults into homelessness or high-cost institutions.”
“HUD’s proposed new rules ignore the reality that tens of thousands of older Americans are living in Permanent Supportive Housing because they cannot safely or affordably live anywhere else,” Rosanne Haggerty, president and founder of Community Solutions, said in the release.
Naomi Bludworth, a TAAHP spokesperson, offered a fairly simple explanation as to why Texas’ homeless systems are vulnerable to abrupt federal policy changes and reliant on federal dollars to fund affordable housing.
“Texas does not invest in affordable housing at all,” Bludworth told the Record-Chronicle on Monday.
Uncertain future
The administration’s homelessness approach will most likely impact Denton County if HUD does allocate funding from permanent housing and rehousing programs to focus on short-term transitional housing programs, as Kent indicated in early December in a report to city staff.
In 2024, Denton County agencies, such as Denton County MHMR, used $3.4 million in federal continuum of care funds. They use the funding to house up to 68 chronically homeless individuals with a disability; 35 chronically homeless adults and children; 136 adults and children; and 29 adults with children who are survivors of domestic violence.
Kent said they expected to have the funding guaranteed for two years before the notices were issued.
And while Denton County MHMR and Denton County Friends of Family would be allowed to reapply for permanent housing renewal grants if HUD implements the changes, Kent pointed out that programs like Giving Grace and Christian Community Action, which can house 71 adults and children total, were directed to transition their permanent housing programs to transitional housing programs to be eligible for funding.
Kent offered a temporary solution to city staff in December, indicating that the Denton City Council had approved an amendment on Nov. 18 to the city’s Action Plan to allocate $639,000 of unused HOME Investment Partnership Program funds for Tenant Based Rental Assistance and Supportive Services.
“While the additional TBRA funding may be able to address some of the need resulting from local [rapid rehousing] programs not being renewed, for a short period of time, a significant gap is expected to remain,” Kent wrote.
In a follow-up email Monday afternoon, Denton County MHMR's Gutierrez shared that the Texas Homeless Network indicated its continuum of care program competition process remains on pause until HUD provides guidance.
“Unfortunately, the Center does not have any alternative funding to utilize if HUD makes these changes,” Gutierrez wrote.
CHRISTIAN McPHATE can be reached at 940-220-4299 and cmcphate@dentonrc.com.
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