Nominations Open for HousingWire's 2026 Tech100 Awards: Gain Industry Recognition

New HUD Policy Shifts Focus to Transitional Housing: Will It Better Serve the Homeless?

Update Shifting Paradigms in Homelessness Policy In a bold and controversial shift, the Trump administration has announced new strategies under the Department of Housing and Urban Development (HUD)—approaches that prioritize transitional housing and impose requirements for employment and addiction treatment over the previously favored model of permanent housing for the homeless. This significant policy change is set to impact an array of communities across America, especially as the new funding strategies could jeopardize the housing stability of around 170,000 individuals currently benefitting from permanent support. The Impacts of the New Funding Model The recent HUD policy reversal marks a departure from the Biden administration's "Housing First" strategy, which emphasized the immediate provision of permanent housing as a solution to homelessness. Housing Secretary Scott Turner has communicated that the previous model lacked accountability in addressing the underlying issues of homelessness, such as mental health and addiction challenges. Under the new guidelines, the focus will be on transitional housing, management compliance, and employment support. However, criticisms have emerged, suggesting this approach could displace vulnerable populations, particularly older adults—who comprise a rapidly growing homeless demographic. Concerns Raised by Housing Experts and Advocacy Groups Experts and advocacy groups, including the National Alliance to End Homelessness, are voicing alarm over these policy changes. The group declares that shifting funding towards transitional programs effectively shuts down essential permanent housing initiatives. This decision could exacerbate homelessness rates, contradicting the supportive housing approach that many believe fosters long-term stability. For communities reliant upon consistent funding for permanent supportive housing, there is a growing fear of disruption and displacement as existing funding structures face cutbacks. Legislative Responses and Community Reactions Bipartisan concerns are emerging within Congress, with lawmakers from both parties urging HUD to reconsider the new directions. Recent letters sent to Secretary Turner from more than 20 legislators have highlighted the potential chaos this funding overhaul could unleash across local homelessness response efforts. Senior advocates argue that before these new policies take effect, there needs to be careful assessment and alignment that prioritizes the welfare of vulnerable populations over abstract bureaucratic changes. The Role of Faith-Based Organizations In a notable twist, the new policies also allow faith-based organizations to compete for approximately $3.9 billion in HUD grants that were not previously accessible to them. Paula White, senior advisor to the White House Faith Office, has voiced support for the policy changes, suggesting that faith organizations possess unique capabilities to deliver holistic care that meets the emotional, spiritual, and social needs of those experiencing homelessness. Yet, these arrangements come with complexities, including discussions about accountability, structure, and outcomes for the homeless individuals these organizations aim to serve. What Lies Ahead for America's Homeless Population? As we approach the end of 2025 and look towards 2026, ambiguity looms over HUD’s existing Continuum of Care program. The impending expiration of numerous program grants and the looming implementation of the new funding framework raises the predominant question: how will these changes affect the housing landscape for America's most vulnerable populations? As communities brace for these transitions, critical conversations around policy adjustments, funding structures, and the true definition of care continue to intensify. The discussion surrounding homelessness in America is far from over. The decisions now being taken could redefine the approach to social services in a way that supports or neglects the most at-risk communities. Advocates for the homeless are determined to keep the dialogue active, promoting a vision of care that is empathetic and effectively structured to support those in need long-term.