HUD pulls funds from Twin Cities housing projects
The U.S. Department of Housing and Urban Development has curtailed renewal funding for permanent supportive housing through new Continuum of Care rules that would cut such funding by more than half and threaten roughly $48 million in Minnesota CoC funds serving more than 3,600 residents — changes providers warn could imperil projects (Catholic Charities says more than $1 million and 120 units are at risk) and, according to a 185‑group coalition, could reduce permanent‑housing funding by over 85% and double chronic homelessness. The policy ties eligibility to local bans on public camping/drug use, cooperation with ICE and limits on supportive services (HUD has criticized “Housing First”), prompting vigils, bipartisan congressional letters, and legal action from Minnesota’s attorney general urging HUD to reverse or extend the changes.
đź“Ś Key Facts
- HUD issued new rules that would cut permanent supportive housing funding by more than half, slash expected renewal retention from roughly 90% to about 30%, cap how much grant money can fund supportive services, and frame a policy shift away from 'Housing First' toward 'self‑sufficiency' and transitional housing.
- The new CoC eligibility and compliance conditions include local/state bans on public camping, drug use and squatting; cooperation with federal immigration enforcement (ICE); stricter standards for involuntary commitment; and bars on applicants that 'deny the sex binary' or distribute harm‑reduction supplies — provisions that could render some jurisdictions, including parts of Minnesota, ineligible under current local policies.
- There are conflicting national funding figures in reporting: HUD reportedly expects to award roughly 7,000 grants totaling about $3.9 billion nationwide, while other reporting says the new cap on housing tied to voluntary supportive services would reduce national CoC funding from roughly $2.3 billion to about $1.2 billion.
- Minnesota specifics: the state received about $48 million in CoC funding last year, and organizers estimate roughly 3,600 Minnesotans live in supportive housing that could be affected; a coalition of more than 185 Minnesota organizations warns the changes could cut permanent‑housing funding by over 85% and potentially double chronic homelessness.
- Political, legal and advocacy responses: the Minnesota coalition has asked Congress to reverse the changes; bipartisan letters — including one signed by 42 Senate Democrats (including both Minnesota senators) and another with 22 House Republicans — urged HUD to extend CoC funding; Minnesota Attorney General Keith Ellison is joining a multistate lawsuit to stop implementation.
- Local providers warn of immediate harms: Catholic Charities Twin Cities says 120 supportive units largely HUD‑funded (more than $1 million at risk) and reports a 90% housing retention/transition rate across its roughly 1,000 units; Beacon Interfaith and other providers say mandatory treatment/work requirements would hurt people transitioning from encampments and defend voluntary 'Housing First' supports as the most effective, cost‑efficient approach.
- Public mobilization: faith leaders, lawmakers and housing advocates held a 12‑hour 'Losing Sleep, Losing Homes' overnight vigil at the Basilica of Saint Mary in Minneapolis (about 300 people registered, rotating in shifts) to protest HUD’s proposed changes and urge reconsideration.
đź“Š Relevant Data
In Minnesota, 72% of adults experiencing homelessness identify as Native American or people of color, with Black or African American comprising 32% and Native American 30%, highlighting severe racial disparities compared to the state's 78% White overall adult population.
Homelessness in the Twin Cities and Greater Minnesota — IssueLab
Nationally, homelessness increased by 18% from 2023 to 2024, reaching a record high of 771,480 people, with the largest increases among families with children (39.4%) and children under 18 (33%).
The 2024 Annual Homelessness Assessment Report (AHAR) to Congress — U.S. Department of Housing and Urban Development (HUD)
Black people, who make up 12% of the U.S. population and 21% of those in poverty, represented 32% of people experiencing homelessness in 2024, demonstrating significant overrepresentation.
The 2024 Annual Homelessness Assessment Report (AHAR) to Congress — U.S. Department of Housing and Urban Development (HUD)
Housing First programs decreased homelessness by 88% and improved housing stability by 41% compared to Treatment First programs, according to a systematic review of 26 studies.
The Evidence is Clear: Housing First Works — National Low Income Housing Coalition (NLIHC)
Permanent supportive housing has long-term housing retention rates of up to 98%, and every dollar invested yields $1.44 in societal cost savings from reductions in healthcare, emergency housing, and other services.
The Evidence is Clear: Housing First Works — National Low Income Housing Coalition (NLIHC)
No evidence has found that transitional housing reduces rates of homelessness or successfully houses people experiencing chronic homelessness, while permanent supportive housing increases housing stability and decreases time spent homeless.
Evidence Shows Permanent Supportive Housing Helps People Exit Homelessness. A Proposed Funding Change Would Cut Those Programs. — Urban Institute
Since 2013, the U.S. has abated 120,000 units of transitional housing under Housing First policies, contributing to a 30% national increase in unsheltered homelessness over 10 years.
Why America’s Homelessness Strategy Failed and How to Fix It — Cicero Institute
In 2024, 60% of people experiencing homelessness in the U.S. were men, with rates of 28 per 10,000 men compared to 18 per 10,000 women, and gender-expansive individuals increased 618% since 2015.
State of Homelessness: 2025 Edition — National Alliance to End Homelessness
Adults aged 35–44 had the highest homelessness rate in 2024 (35 out of every 10,000 people), and older adults (55+) are the fastest-growing group, expected to triple between 2017 and 2030.
State of Homelessness: 2025 Edition — National Alliance to End Homelessness
HUD's shift to transitional housing aims to promote self-sufficiency, as Housing First has been criticized for not reducing unsheltered homelessness, which increased 30% nationally despite doubled permanent housing supply.
Why America’s Homelessness Strategy Failed and How to Fix It — Cicero Institute
đź“° Sources (5)
- Minnesota housing advocates held a 12‑hour overnight vigil at the Basilica of Saint Mary in Minneapolis (Tuesday evening to 7 a.m. Wednesday) to oppose HUD’s proposed funding changes; about 300 people registered, with participants rotating in shifts.
- Minnesota Attorney General Keith Ellison announced he is joining multiple states suing HUD to stop implementation of the changes.
- HUD Secretary Scott Turner says the CoC program would shift focus from permanent supportive housing toward transitional housing and support aimed at 'self‑sufficiency.'
- Beacon Interfaith CEO Chris LaTondresse argued the 'housing first' model with voluntary on‑site services is the most effective and cost‑efficient approach; organizers estimate cuts could affect roughly 3,600 Minnesotans.
- A 12-hour 'Losing Sleep, Losing Homes' vigil is scheduled at the Basilica of St. Mary in Minneapolis (starts noon Tuesday, with an overnight 7 p.m.–7 a.m. vigil).
- HUD spokesperson issued a statement criticizing 'Housing First' and calling recent CoC funding an endorsement of a 'failed' ideology.
- Article cites national CoC funding reduction figures from roughly $2.3 billion to $1.2 billion under the new cap on housing tied to voluntary supportive services.
- Beacon Interfaith Housing Collaborative CEO Chris LaTondresse is quoted, highlighting local concern through the story of a supportive-housing resident (Betty Allen).
- Faith leaders, lawmakers, and housing advocates will participate, urging HUD to reconsider.
- Catholic Charities Twin Cities says 120 of its supportive units are largely HUD-funded and more than $1 million is at risk under the new rules; the nonprofit reports a 90% housing retention/transition rate among its 1,000 units.
- HUD’s public statement labels 'Housing First' as a 'failed' ideology and says the new focus is on 'self-sufficiency' and 'personal accountability,' with caps on how much of each grant can fund supportive services.
- Minnesota coalition letter now includes more than 185 housing organizations asking Congress to reverse the changes.
- Bipartisan pressure: 42 U.S. Senate Democrats (including both Minnesota senators) and 22 House Republicans urged HUD to extend CoC funding; Rep. Pete Stauber (MN-8) signed the GOP letter.
- Politico reports HUD expects to award roughly 7,000 grants totaling about $3.9 billion nationally, a slight increase from last year reflecting higher rents.
- Beacon Interfaith CEO Chris LaTondresse questions mandatory treatment/work requirements for people transitioning directly from encampments.
- HUD issued new rules that would cut permanent supportive housing funding by more than half and drop expected renewal retention from roughly 90% to 30%.
- Minnesota received about $48 million in CoC funding last year and has more than 3,600 residents in supportive housing that could be affected.
- Eligibility conditions include local/state bans on public camping, drug use and squatting; cooperation with ICE; standards for involuntary commitment; and bars on applicants that 'deny the sex binary' or distribute harm-reduction supplies.
- A coalition of 185 Minnesota organizations warns the changes could reduce permanent-housing funding by over 85% and potentially double chronic homelessness.
- Minnesota may be ineligible under several provisions (e.g., trans refuge policies and local non-enforcement of federal immigration law).