The Brief

California counties are reporting decreases in homelessness, suggesting the state is finally making progress in solving one of its most difficult and persistent problems.

But even as Gov. Gavin Newsom and local officials are celebrating, the money that made those wins possible is at risk of evaporating.

President Donald Trump’s administration this month tried to block organizations that don’t support its social agenda from accessing federal homeless housing funds — causing experts in the field to worry that politically liberal California could find itself blacklisted from crucial dollars.

Cuts to state homelessness funding are also on the horizon, and some local jurisdictions are pulling back funds as they struggle with their own budget deficits. That has counties, nonprofits and industry experts worried California’s homeless counts will soon go right back up.

“I do think that we’re doing something right,” Sharon Rapport, director of California state policy for the Corporation for Supportive Housing, said of the recent decreases. “That all may come to a crashing end with a lot of concerns with what’s happening at the federal level, federal policy changing and funding cuts happening.”

Of the 29 places in California that reported an official homeless census this year, more than half saw a decrease compared to 2024, according to an analysis of point-in-time counts by the Hub for Urban Initiatives. That includes drops of about a quarter in Contra Costa and Sonoma counties, 20% in Santa Cruz County, 16% in Ventura County and 14% in Merced County.

San Diego and Los Angeles counties each saw a decrease of less than 10%. For LA County, this marks the second year in a row that homelessness is down.

But funding worries loom like a black cloud over those promising results. As purse strings tighten, service providers will have to cut staff, programs and bed capacity, meaning they can help fewer homeless people. For years, California cities, counties and nonprofits have been pushing the Newsom administration to provide an ongoing source of homeless funding, so service providers can plan ahead without worrying each year about how much money they’ll get.

Some organizations already are feeling the squeeze.

From December through July, Union Station Homeless Services in Los Angeles County turned away 700 families who needed housing, said CEO Katie Hill.

“We just don’t have anything available for them,” Hill said.

The county cut housing vouchers as the city and county struggled with financial fallout from recent wildfires, falling property tax revenues and increasing legal payouts.

Other organizations are closing their doors for good. Downtown Streets Team, which helps unhoused residents in 16 California cities find housing while earning money cleaning up local streets, plans to close next month after two decades of service.

“The financial and political environment we operate in has shifted dramatically in recent months,” CEO Julie Gardner said in an emailed statement. “During this time, (Downtown Streets Team) lost several significant contracts and grants, creating a multi-million-dollar loss in overall funding. When combined with other factors, including rapidly rising operational costs, these losses made it impossible to continue running the organization in a financially sustainable way.”

‘I just don’t think we’re going to see that funding’

Congress in 2023 appropriated $75 million for something called the Continuum of Care Builds grant, which was supposed to help support the construction of new homeless housing. Former President Joe Biden’s administration started the application process for those grants in 2024. When Trump took the helm in 2025, his administration re-started the process with new criteria, making applicants apply again.

Then, at the start of September, the Trump administration made everyone apply a third time — with a very different set of criteria seeming to disqualify organizations that support trans clients, use “harm reduction” strategies to prevent drug overdose deaths or operate in a “sanctuary city.”

Applicants had to attest that they don’t deny the “sex binary in humans or promote the notion that sex is a chosen or mutable characteristic.” They had to promise not to distribute drug paraphernalia or allow the use of drugs on their property.

Applicants also had to attest that they operate in a city, county or state that cooperates with federal immigration enforcement. Newsom has resisted Trump’s immigration crackdown at a state level, and recently signed a set of bills intended to further check ICE.

And applicants were required to operate in a city, county or state that prohibits public camping and enforces that rule. That one could be an easier lift: Arrests and citations for camping-related activities have soared in some California cities over the past year, after the U.S. Supreme Court gave cities more leeway to crack down, and Newsom encouraged cities to ban camping. But two recent statewide attempts to ban homeless camps from near schools and other areas fell flat.

The new funding rules were a major blow to Contra Costa County-based Hope Solutions, which was initially selected to receive $5.5 million to build 15 tiny homes for homeless 18-24-year-olds in Pittsburg. After staff spent at least 100 hours completing the project proposal, they learned this month that they’d no longer qualify because of the new criteria. The Pittsburg Police Department says it does not participate in immigration enforcement. In addition, the new program rules specify the money must go to buildings that serve elderly residents — an about-face that takes Hope Solutions’ youth project out of the running.

“It felt like a gut punch,” said CEO Deanne Pearn, “and really disheartening to know that we had spent so much time and asked so much of our county partners and others, and that that time could have been spent elsewhere.”

The camp where a person experiencing homelessness lives on a hillside above U.S. Route 50 in Sacramento, on Oct. 25, 2024.

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Fred Greaves

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CalMatters

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Hope Solutions is still moving forward with the project, which Pearn hopes the organization can fund with its own financial reserves. But that means the nonprofit won’t have that money for its next project.

The National Alliance to End Homelessness recently sued the Trump administration over the new grant conditions, claiming that all projects in California and three dozen other states would be ineligible for funds. Earlier this month, a federal judge sided with the Alliance, and temporarily barred the federal government from distributing those funds.

Now, that $75 million is frozen as the case moves forward.

While the new conditions at issue in the lawsuit apply only to one specific federal homelessness grant, experts worry it’s an ominous sign for California. Service providers expect applications to open this fall for the main source of federal homelessness funding — the Continuum of Care Program — which funneled about $600 million to California counties in 2023.

If that application poses similar requirements, California could be in trouble.

“Personally, I just don’t think we’re going to see that funding,” said Hill, of Union Station Homeless Services in Los Angeles County.

In a separate lawsuit, San Francisco and Santa Clara Counties sued the Trump administration over contracts that prevented recipients of federal homeless funds from using the money to promote “gender ideology,” “elective abortions” and “illegal immigration.” The counties won an early victory last month, when a judge temporarily blocked the administration from imposing those conditions.

Other federal cuts are looming, too. The Emergency Housing Vouchers program, which launched during the COVID-19 pandemic and now helps more than 15,000 Californians pay their rent, is expected to run out of money next year.

That’s not even counting the cuts to housing vouchers and other federal housing and homelessness programs Trump proposed in May, which are still being negotiated in Congress.

California turning a corner on homelessness

California appears to be decreasing its homeless population, according to the Hub for Urban Initiatives, a California organization that helps local communities shape their homelessness policy, apply for grants and survey their homeless populations.

The 29 California communities that counted and reported their homeless populations this year tallied a total of 131,209 people — a 4% decrease from what those same communities reported last year. That’s a significant step for a state where the homeless population has been stubbornly rising for years.

That data comes from the federally mandated homeless point-in-time count, where teams of volunteers count the unhoused people they see on the street on one night in January. The counts are imperfect, as volunteers can overlook people sleeping in out-of-the-way places, and different counties use different methods — while some places count every year, others count every other. Of the 44 “continuums of care” required to count in California (some small, rural communities combine multiple counties into one continuum of care), 14 didn’t count this year.

The federal housing department will release an official total for the state later this year.

Newsom trumpeted the initial decreases, taking credit for pouring money into homeless housing and other services. He’s not wrong.

Contra Costa County, which saw the state’s biggest drop in homelessness this year, attributes its success largely to the recent boost in state funding, said Christy Saxton, director of Health, Housing and Homeless Services for Contra Costa County. Over the past two years, the county increased its homeless shelter and housing capacity by more than a third.

A big piece of that was the Homeless Housing, Assistance and Prevention program, which Newsom launched in the 2019-20 budget year to fill what until then had been a void of state homelessness funds. For the past few years, that program gave cities and counties $1 billion each year.

Those funds support programs such as Contra Costa County’s Delta Landing temporary housing site in Pittsburg, which opened 172 units in 2021. Until then, that part of the county had about 20 beds for its unhoused residents, Saxton said.

But instead of making that state funding ongoing, Newsom’s administration opted to dole it out in one-time grants each year, leaving cities and counties continually guessing what next year’s budget will bring.

This year, that state program will get no new funding (because of the glacial pace at which the state distributes these funds, cities and counties have yet to receive money from the last round). Next year, the amount is set to shrink to $500 million.

“We are significantly concerned about the cuts that are coming,” Saxton said, “because it has taken an influx of money in order to see those decreases, and we need that to continue on now more than ever.”

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

The U.S. Department of Housing and Urban Development cannot impose dramatically different conditions for homelessness programs for now, according to an oral ruling Friday by U.S. District Judge Mary McElroy in Rhode Island.

McElroy granted a preliminary injunction to a group of states, cities and nonprofits who said a last minute overhaul of how to spend $4 billion on homelessness programs was unlawful. She also agreed with their argument that it likely would push many people back onto the streets in the middle of winter, causing irreparable harm.

"Continuity of housing and stability for vulnerable populations is clearly in the public interest," said McElroy, ordering HUD to maintain its previous funding formula.

The National Alliance to End Homelessness, one of the plaintiffs, said in a statement the order "means that more than 170,000 people – families, seniors, veterans, and people with disabilities — have respite from the government's assault."

HUD has sought to dramatically slash funding for permanent housing and encourage more transitional housing that mandates work and treatment for addiction or mental illness. The overhaul — announced last month — also would allow the agency to deny money to local groups that don't comply with the Trump administration's agenda on things like DEI, the restriction of transgender rights and immigration enforcement.

"HUD will continue working to provide homelessness assistance funding to grantees nationwide," said HUD spokeswoman Kasey Lovett in a statement to NPR. "The Department remains committed to program reforms intended to assist our nation's most vulnerable citizens and will continue to do so in accordance with the law."

'Chaos seems to be the point'

McElroy expressed frustration with a series of HUD actions in recent weeks. Just hours before a Dec. 8 hearing, the agency withdrew its new funding notice, saying it would make changes to address critics' concerns. But on Friday, HUD's attorney said the new version would not be ready until the end of the day.

"The timing seems to be strategic," McElroy said, asserting there was no reason the document could not have been ready before the hearing. "The constant churn and chaos seems to be the point."

In defending the agency, attorney John Bailey said HUD was simply trying to change its policies to reflect President Donald Trump's executive orders, which he called "legal directives." The judge interjected repeatedly to explain that he was conflating things, noting Congress — not the president — makes laws.

'It's kind of shocking'

HUD's changes were announced in November with little notice and only weeks before local homeless service providers must apply for new funding.

"Our agencies are just scrambling right now to try to respond," said Pam Johnson with Minnesota Community Action Partnership, whose members provide housing and other services for homeless people. "It also just reverses 40 years of bipartisan work on proven solutions to homelessness. So it's really, it's kind of shocking."

For decades, U.S. policy favored permanent housing with optional treatment for addiction or mental illness Years of research has found the strategy is effective at keeping people off the streets.

But many conservatives argue it's failed to stop record rates of homelessness.

"What is the root cause of homelessness? Mental illness, drug addiction, drug abuse," HUD Secretary Scottt Turner said recently on Fox Business Network. "During the Biden administration, it was just warehousing. It was a homeless industrial complex."

Turner and others who support the changes say the goal is to push people towards self-sufficiency.

But local advocates say mental health and substance abuse are not the main factors driving homelessness.

"It's poverty. Poverty, low income and significant lack of affordable housing," says Julie Embree, who heads the Toledo Lucas County Homelessness Board in Ohio.

Many in permanent housing have disabilities that make it hard to work full time, she said. Embree agrees with Trump administration goals like efficiency and saving money, but says pushing people back into homelessness, where they're more likely to land in jail, the courts or a hospital, is not cost-effective.

"One emergency room visit is just as expensive as a month of sustaining this [permanent housing] program," she said.

In Los Angeles, Stephanie Klasky-Gamer with LA Family Housing said there is a need for more transitional housing, but not at the expense of long-term housing. And the idea that programs could simply switch from one to the other is not only unrealistic, it's illegal.

"You cannot take a building that has a 75-year deed restriction and just — ding! — call it interim housing," she said.

Those challenging HUD say providers who own such properties – or states who've invested millions of dollars in permanent housing projects — face "significant financial jeopardy" if their funding is not renewed.

In addition to the legal challenges, members of Congress from both parties have questioned HUD's sudden shift on homelessness. Advocates have lobbied lawmakers to step in and, at the least, push for more time to prepare for such a massive overhaul.

President Donald Trump said the administration has reached agreements with nine more drugmakers to bring their U.S. drug prices more in line with what other wealthy countries pay.

Fourteen companies in total have now reached what the administration calls most-favored-nation pricing deals. The companies that took part in Friday's announcement were: Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech, Gilead Sciences, GSK, Merck, Novartis and Sanofi.

They agreed to charge the U.S. government no more for new drugs than the prices paid by other well-off countries. The agreements will allow state Medicaid programs to access lower prices from the nine companies. In a statement, the White House said the change will result "in billions of dollars in savings."

The drugmakers also agreed to invest at least $150 billion in manufacturing operations in the U.S. The president is seeking to increase domestic production of pharmaceuticals.

In addition, the companies agreed to make some of their most popular drugs available at lower prices to consumers who pay out of pocket through a government website called TrumpRx.com. The TrumpRx website is expected to launch in early 2026, and would take consumers to pharmaceutical companies' direct-to-consumer websites to fulfill orders.

For example, Merck will reduce the price of Januvia, a medication for Type 2 diabetes, from $330 to $100 for patients purchasing directly through TrumpRx, the White House said. Amgen will reduce the price of Repatha, a cholesterol-lowering drug, from $573 to $239 when purchased through TrumpRx.

In exchange for these concessions, the companies will be exempt from possible administration tariffs for three years.

The extent of savings for consumers under the agreements is unclear. Medicaid and its beneficiaries already pay some of the lowest prices for drugs. And people with health insurance could spend less on copays for their medicines than paying cash for them through the drugmakers.

Separately, Trump said during the press event that he would like to get health insurers to lower their prices, too.

"I'm going to call a meeting of the insurance companies," he said. "I'm going to see if they [will] get their price down, to put it very bluntly."

America's new top health diplomat is Bethany Kozma.

The job she took on this week — leading the Department of Health and Human Services Office of Global Affairs — does not have a high profile. And Kozma herself is not a familiar name in the world of public health.

But it is a position with power — and Kozma has a record of public statements and activism on health issues, equating abortion with "murder" and campaigning against gender-affirming care.

The office sometimes is referred to as the "diplomatic voice" of HHS. As director, Kozma will have considerable influence over how the U.S. shapes health policy in other countries in the wake of the Trump administration's foreign aid cuts and withdrawal from the World Health Organization.

Kozma declined to be interviewed for this story. She doesn't appear to have a background in global health based on publicly available information online. The HHS website offers few details about her professional profile. In response to questions about her qualifications and vision for the role, HHS responded with this statement.

"The Office of Global Affairs (OGA) advances the Trump administration's agenda and priorities by bringing common sense, transparency and gold-standard science to global partners. Under Secretary Kennedy's leadership, OGA is committed to strengthening the United States' position as the global gold-standard for public health and ensuring Americans are protected at home and abroad."

Who is Bethany Kozma?

Kozma began her career in public service during the George W. Bush administration, working at the White House Homeland Security Council. During the Obama years, she re-entered public life as an activist.

In a 2016 commentary for The Daily Signal, a conservative news website founded by the Heritage Foundation, she argued against the Obama administration's guidance that public schools should allow children to use the bathroom that comports with their identity.

"This radical agenda of subjective 'gender fluidity' and unrestricted shower and bathroom access actually endangers all," she stated, noting that "predators" could abuse the policy.

In 2017, she joined the Trump administration as senior adviser for Gender Equality and Women's Empowerment in the United States Agency for International Development, eventually being promoted to deputy chief of staff. In videos obtained and released by ProPublica, Kozma recalls calling the U.S. a "pro-life" country in a closed-door U.N. meeting about women's rights in 2018, when access to abortion still was protected nationally by Roe v. Wade.

In August 2020, Sen. Chris Coons, D-Del., and four other Democratic senators issued a letter labeling Kozma and several other political appointees at USAID as "prejudiced" and called for them to be removed from their posts. Kozma has "spoken extensively and derisively of trans people and trans issues," the senators wrote.

During the Biden administration, she also was involved in Project 2025, the Heritage Foundation's "blueprint" for a new Republican administration. She played a prominent role in Project 2025 training videos, obtained and published by ProPublica.

In one nearly 50-minute training video focused on left-wing language, she called for a Republican administration to "eradicate 'climate change' references from absolutely everywhere," and said that concerns over climate change are efforts at "population control." She also called gender-affirming care "absolutely infuriating" and said "the idea that gender is fluid is evil." Overall, she argued that changing language around these policies should be a priority for political appointees.

Kozma joined the second Trump administration as a chief adviser at the HHS Office of Global Affairs. In September, she spoke at a U.N. event commemorating the 30th anniversary of the declaration that denying women's rights is a human rights violation.

"While many may celebrate so-called successes gained for women over the last 30 years, one must ask what defines true success for women?" she began, adding that "biological reality is rooted in scientific truth and is confirmed by the universal truths that we are endowed by our creator who made us 'male and female.'"

Those views can be divisive but have garnered some support for Kozma's promotion.

"Bethany is an excellent pick for global affairs at HHS," says Roger Servino, vice president of domestic policy at The Heritage Foundation. "She was an early champion of protecting children from gender ideology back when the medical establishment was able to silence voices of reason and dissent and she is perfectly placed to help push back on global health bodies trying to impose left wing pseudoscience on the American people and the world."

What will her goals be at the Office of Global Affairs?

Kozma is taking over as director of the HHS Office of Global Affairs at a time of drastic change for global health.

In previous administrations, a main focus of the office was dealing with the World Health Organization. Typically, the director, who usually has a background in public health, is involved in negotiations on sharing data for pathogen surveillance or developing vaccine policy, for example.

After President Trump withdrew the U.S. from WHO, the administration has started a new strategy: striking deals with individual countries to give health aid in exchange for their meeting certain policy prescriptions. Kozma has been involved in some of those negotiations, but the details aren't quite finalized.

Some reproductive rights advocates believe Kozma will use her new position to insert anti-abortion and anti-LGBTQ policies into these agreements.

"[Kozma] is vehemently anti-trans, anti-LGBTQI+, anti-abortion," says Keifer Buckingham, managing director at the Council on Global Equality, a coalition of advocacy organizations that focuses on LGBTQ issues. "For those of us who want to ensure that the provision of U.S. foreign assistance and health doesn't discriminate against people based on who they are, [Kozma's appointment] raises a lot of red flags."

One particular worry is about the Helms Amendment, a U.S. policy that prohibits foreign aid being used to fund abortion services.

"There's been speculation that there's an intention by the U.S. government to expand the Helms Amendment beyond abortion to include LGBTQ's as well," says Musoba Kitui, director of Ipas Africa Alliance, a non-profit that works to provide access to abortion and contraception. He's concerned that health groups that serve those populations could lose funding. That speculation is backed up by reporting from The Daily Signal that the administration is planning to prohibit U.S. aid funding for "gender ideology and diversity, equity and inclusion initiatives."

Given LGBTQ people are often at higher risk for diseases like HIV, such policies could make these communities even more vulnerable, says Kitui.

"We could see more marginalization, inequality, spikes of infection," he says. While many African governments signing these deals understand those dynamics, Kitui says they may still agree to more restrictive conditions as aid cuts have "starved health systems to a point of desperation."

Have information you want to share about ongoing changes at federal health and development agencies? Reach out to Jonathan Lambert via encrypted communications on Signal: @jonlambert.12