Trump administration pauses homelessness funding changes; NH organizations ‘in limbo’

In announcing the November changes, HUD officials said the policy shift was meant to decrease long-term reliance on the federal government for housing. (Photo by HUD Office of Public Affairs)

Weeks after releasing guidelines restricting the use of federal funds addressing homelessness, the Trump administration is pulling back.

On Monday, the U.S. Department of Housing and Urban Development said it was withdrawing its controversial November guidance around “Continuum of Care” grants, after organizations distributing the funding said it would cause a funding cut and 20 states filed a lawsuit. The federal government told a federal court it is revising those guidelines to address that lawsuit and that it will reissue them soon. 

Now, the New Hampshire organizations that receive that funding say they are again facing uncertainty. 

“We’re just remaining in limbo, waiting for information,” said Jennifer Chisholm, executive director of the New Hampshire Coalition to End Homelessness. 

The move by HUD Monday paused what has been a turbulent process. 

Federal Continuum of Care grants have been allocated to help shelter and house homeless people since 2009, though an earlier version of the program dates to the 1987 McKinney-Venti Homeless Assistance Act. 

New Hampshire has three Continuum of Care organizations that distribute that funding; one covering Manchester, one covering Nashua, and a third covering the rest of the state run by the Department of Health and Human Services. 

In January, under President Joe Biden, HUD allocated $14.1 million to New Hampshire. The program allows organizations to use the money to acquire, rehabilitate, construct, and lease homes to those who need housing, and can provide rental assistance and supportive services to prevent homelessness. 

Typically, HUD issues an annual “notice of funding opportunity” that details the criteria for how the grants may be spent and how to apply.

But on Nov. 13, HUD released that guidance with major changes. It said it would end the practice under the Biden administration of guaranteeing 90% of the funding to existing Continuum of Care organizations and opening the remaining 10% to competitive bids. Instead, HUD said just 30% of the funding would go to those organizations and the other 70% would be sent out to bid.

The agency also said it would prioritize funding for temporary, transitional housing for homeless people, and would discourage the permanent supported housing for which recipients have traditionally used the money.

For the organizations distributing the funding, the November rules threatened many existing programs. 

Before this year’s proposed changes, Nashua’s Continuum of Care received part of the 90% guaranteed portion of the total funding and spent most of it on long-term housing. That has allowed Harbor Care, the organization that runs the Continuum of Care, to support permanent housing for 65 people, said Henry Och, the organization’s CEO.

But by dropping the share of guaranteed funding from 90% to 30%, the proposed HUD guidance would have meant Harbor Care could keep only 15 of those 65 in permanent housing. 

To get federal funding for the other 50 people, Harbor Care would have needed to apply for a portion of the 70% competitively bid share, Och said. And to have a chance of winning such a bid, the organization would have needed to designate that housing as temporary, not permanent, he added. 

Under that approach, those 50 people would lose that housing within two years, Och said. 

“Then we’d have to figure something out with other community partners to find another housing solution for them, because then that transitional housing period for them would expire, meaning that that slot would open up for somebody else to come in and fill it up,” he said. 

In announcing the November changes, HUD officials said the policy shift was meant to decrease long-term reliance on the federal government for housing. The new administration criticized the Biden administration’s approach, known as “Housing First” calling the program a “self-sustaining slush fund.” 

“Roughly 90% of the last four years CoC awards funneled funding to support the failed ‘Housing First’ ideology, which encourages dependence on endless government handouts while neglecting to address the root causes of homelessness, including illicit drugs and mental illness,” read the HUD announcement.

But Och said the Housing First method was meant to address people’s homelessness directly before starting other interventions.

“The basic premise is that the primary step in getting people up on their feet is to put a roof over their head and then work from there,” he said. “And I think that’s at the root of some of these changes.” 

In response to the new guidance, attorneys general in 20 Democratic-led states sued HUD, claiming that it was placing unlawful conditions on funds already allocated by Congress. 

New Hampshire Gov. Kelly Ayotte publicly opposed the homelessness funding changes. But she declined to request Attorney General John Formella to join the Democrats’ lawsuit, saying at a press conference last week that she preferred to use political channels over legal channels to influence the Trump administration. 

On Tuesday, Ayotte praised the withdrawal of the guidelines and touted her advocacy. “I expressed my deep concerns to HUD about the impact their proposed changes would have on New Hampshire, and I’m glad to hear they withdrew their notice so these concerns can be addressed,” she said in a statement. “We will continue to advocate for the organizations working to reduce homelessness in our state.”

It is not clear when the new guidelines will appear. The earlier HUD guidelines had established a mid-January application deadline. HUD announced Monday it would release the updated notice of funding opportunity before that deadline. 

And New Hampshire organizations are wondering how much the guidelines might change. 

“We’re still trying to figure out what all of this means,” Och said. 

Chisholm said the uncertainty is especially acute in New Hampshire, which has fewer state-led funding backstops than other states.

“I am carrying the torch of hope,” she said. “We’re hoping that they will take this opportunity to address the concerns that have been very strongly voiced across the nation.”

Lauren Bombardier, vice president of community relations at Families In Transition, which runs the Continuum of Care for Manchester, said the organization is “closely monitoring the situation and awaiting further direction on the next steps.”

Jake Leon, a spokesman for the Department of Health and Human Services, referred questions about the state’s approach to the changes to the governor’s office. 

To Chisholm, the waiting is nothing new. 

“This has kind of been the conversation for a while now. People will pose us a question about, like, ‘Well, what does this mean?’ We’re not sure.”