Potential new HUD rules capping spending on certain initiatives for people escaping homelessness could have big local impacts, service providers say.
Much of the federal funding local organizations use to help people experiencing homelessness comes from HUD's Continuum of Care program.
Most of that money in Hamilton County goes to permanent housing initiatives — subsidies that help people who were on the streets pay rent and access services.
Strategies to End Homelessness administers that funding in the county. President and CEO Kevin Finn wrote a memo to county officials this week expressing concerns about rule changes HUD is considering. Those would cap the amount of Continuum of Care funding service providers could spend on permanent housing at 30%.
Right now, Strategies to End Homelessness spends roughly 88% of its $29 million in yearly Continuum of Care funding on permanent housing programs. Those pay rent subsidies for people who were previously homeless and often also provide social services to ensure people who need mental health care or addiction treatment don't end up back on the street.
"Currently about 5,000 people are in these programs," Finn says. "So about two-thirds of those people would lose those rental subsidies. What we don't know is how quickly that would kick in."
That's about 2,900 people in Hamilton County, Finn says. He said that while Cincinnati and other urban areas have a strong network of service providers who could potentially find ways to fill the gaps, rural areas will be hit hard by the loss of permanent housing funding.
The funding caps could take effect as soon as July 2026. That timeline would give agencies like his little time to prepare, Finn says. But the details are murky. More information should come soon in HUD's annual Notice of Funding Availability guidance. But that's been delayed by the government shutdown.
Politico first reported on the potential permanent housing spending caps last month, citing internal HUD documents and HUD employees.
“HUD is no longer in the business of permanently funding homelessness without measuring program success at promoting recovery and self-sufficiency. There will be more news on this much needed paradigm shift soon,” a HUD spokesperson told the publication in response to inquiries about the changes.
In his memo to county officials, Finn says the best outcome would be for HUD to reverse course on the planned rule changes. But the next best thing would be for HUD to honor a previous commitment it had made to provide funding for Continuum of Care through 2026 and then change the rules for the following year.
Other details are still unclear as well.
"What we don't know yet is, OK, if we're not allowed to spend the money on these permanent housing programs, what could the money be spent on?" Finn says.
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