California Governor Gavin Newsom has initiated legal action against the Trump administration, seeking to block plans to redirect billions of dollars in federal funding intended for homelessness. State officials have expressed concerns that this shift could significantly increase the number of formerly homeless individuals returning to the streets.
The Trump administration’s proposal aims to reallocate federal homelessness funds towards shorter-term housing solutions and outreach programs. These programs would impose requirements such as employment, addiction treatment, and mental health support, as well as assist law enforcement in dismantling encampments. California officials estimate this change could result in a loss of between $250 million and $300 million in grant funding for local homeless housing and rental assistance programs throughout the state this year.
In a statement addressing the issue, Newsom criticized the administration’s priorities. “While Donald Trump is busy hosting parties and showing off his gold-plated decor, Americans are worried about groceries, rent, and basic stability,” he stated. “Most families can’t fall back on inherited wealth or walk away from failure through bankruptcy — but they’re the ones stuck paying for his chaos and incompetence.”
Federal Funding Changes and Their Implications
The U.S. Department of Housing and Urban Development (HUD) responded to the lawsuit, expressing disappointment in the actions taken by Newsom and a coalition of 20 other states. A spokesperson for HUD remarked, “HUD is dismayed that the plaintiffs have chosen to misuse the Courts and pursue this delaying tactic to serve their own personal political agenda at the expense of the homeless individuals, youth, and families now living on our Nation’s streets.”
The proposed funding changes, officially announced earlier this month, involve a total of $3.9 billion in Continuum of Care funding, which is the primary source of federal financial assistance for homelessness. Under the new guidelines, local governments would be limited to using only 30% of these funds for permanent housing or rental aid, thereby increasing the allocation for transitional housing and sober-living programs. Currently, 87% of these funds in California are directed towards long-term housing solutions.
Scott Turner, HUD Secretary, indicated that the new approach would redefine success in addressing homelessness, emphasizing long-term self-sufficiency and recovery rather than merely the financial expenditure or the number of housing units filled.
This shift has prompted concerns among homelessness service providers in California, who fear that without alternative funding sources, they may have to close housing sites and suspend rental aid efforts. This would leave many vulnerable individuals without critical support, particularly in a state where rental prices have soared to unprecedented levels.
Impact on California’s Homeless Population
The administration argues that the move away from permanent supportive housing is essential to address what they view as decades of ineffective policies, which have contributed to a rising homeless population and the proliferation of dangerous encampments. They claim that federal funding has historically supported unsafe housing environments where drug use occurs without access to necessary assistance, although service providers dispute this assertion, stating it is exaggerated.
In California, homelessness has surged by 62% over the past decade, with an estimated 187,084 individuals currently experiencing homelessness. Some major counties have reported declines in their homeless populations this year, but the overall picture remains concerning. For example, the Bay Area’s homeless population reached 38,891 last year, marking a 46% increase since 2015.
The lawsuit contends that the proposed funding changes are illegal, lacking congressional authorization and not backed by sufficient evidence. California officials assert that the administration’s plans would undermine effective strategies to combat homelessness, including programs like Newsom’s Homekey, which has financed at least 259 permanent and temporary housing projects.
“This would undo years of progress and destabilize our neighbors who finally found a safe place to live,” said Kim Johnson, California Health and Human Services Secretary. “It’s harmful policy that will lead to devastating health outcomes.”
As the legal battle unfolds, the implications for California’s homeless population and the broader national approach to homelessness funding remain significant and uncertain.
