On Friday, President Donald Trump released a budget blueprint for the next fiscal year that would take a chainsaw to social, environmental and education programs. Some of the sharpest cuts are directed at housing programs meant to serve the poor, housing insecure and unhoused.
In California, millions are served by these funds, and state and local governments depend on them to operate affordable housing, rental assistance, homeless service, planning and legal programs.
In a letter to the U.S. Senate Appropriations Committee, the president’s budget director, Russel Vought, laid out $163 billion in annual spending cuts coupled with “unprecedented increases” in military and border security spending. The cuts, Vought wrote, are directed at areas of spending that the administration found to be “contrary to the needs of ordinary working Americans and tilted toward funding niche non-governmental organizations and institutions of higher education committed to radical gender and climate ideologies antithetical to the American way of life.”
That includes $33.5 billion in proposed cuts to the Housing and Urban Development department, a 44% reduction from current levels.
Presidential budget requests rarely reflect what Congress ultimately passes into law but are instead often viewed as something between an opening negotiating bid and a political vision board.
Even so, the budget document makes for quite a vision — one that, if realized, would upend decades of federal housing policy and affect millions of lives.
The sheer breadth of the cuts provides an odd kind of solace to some affordable housing advocates.
You’d be looking at millions of people out on the street virtually overnight.
— Matt Schwartz, president, California Housing Partnership
“By following through on such a huge level with so many proposals that are going to gut assistance to low-income people across the country, including his own party’s states, he’s putting his own members of Congress in a very difficult place,” said Matt Schwartz, president of the California Housing Partnership, a nonprofit that advocates for more affordable housing. “The level of carnage that would be involved in doing these things is probably going to send some Republican senators running for the exits.”
A handful of powerful GOP senators have, indeed, already pushed back on the president’s proposal, though much of their ire was directed at what they saw as a lack of sufficient military spending.
The largest single cut in federal housing policy would target the Housing Choice Voucher program. Better known as Section 8, it’s currently administered by the federal government and helps low-income tenants with their rental payments. The White House is proposing shifting responsibility for the administration of that program, which it calls “dysfunctional,” to states, while cutting its funding in half.
It also proposes a two-year limit on how long a single person can receive help. That change is “completely out of touch with what people are facing in the housing market,” said Alex Visotzky, senior California policy fellow at the National Alliance to End Homelessness. With soaring rents outpacing people’s incomes, low-income tenants aren’t going to be able to magically earn enough money to start paying rent in two years, he said.
Additional cuts to four other housing voucher programs are meant to save $27 billion annually.
“You’d be looking at millions of people out on the street virtually overnight,” said Schwartz. “There’s no way states could maintain the same level of assistance.”
The administration proposes to save nearly $5 billion more by eliminating funds for local economic development grants, affordable housing developments and local initiatives to reduce regulatory barriers to new housing.
That latter program, a Biden-era initiative known as Pathways to Removing Obstacle Housing, was denounced in the administration’s budget write-up as a “woke” program that has pursued “radical racial, gender and climate goals.”
The White House pointed specifically to a $6.7 million grant made to Los Angeles County to fund infrastructure planning, public transit-oriented housing and, as described in the county's funding proposal, rezoning that would reverse the region’s “legacy of past systemic racism.”
Radical reshuffle of homelessness policy
The budget would slash federal homelessness funding by $532 million, while also radically changing the way those funds are distributed. The Continuum of Care program — the main way the federal government distributes funds to fight homelessness — would effectively end. It would be replaced by an Emergency Solutions Grant program.
The continuum program funds long-term solutions to homelessness, including permanent supportive housing, which is housing that comes with case management, counseling and other services for people with disabilities, mental illnesses, addictions or other struggles that mean they require extra help. Emergency Solutions Grants, on the other hand, fund more short-term solutions, such as homeless shelters, or short-term rental assistance for people who don’t need extra services.
That shift in funding would mean thousands of people would lose their supportive housing and end up back on the street, said Visotzky from the National Alliance to End Homelessness.
“This would be a significant shift away from the solution to homelessness, which is housing, toward shelter,” he said. “This budget is going to take away all the pathways to get out of shelter and into housing.”
Homeless veterans fared better. The budget proposes a $1.1 billion increase “for the President’s commitment to ending veterans’ homelessness.” Those funds would go to Veterans Affairs for rental assistance, case management and support services.
The budget also calls for the elimination of the U.S. Interagency Council on Homelessness, an agency tasked with coordinating homeless policy at the federal level, which the administration had already gutted.
End of 'fair housing' enforcement as we know it
The White House also proposes zeroing out a grant program that funds nonprofit legal aid organizations that enforce national fair housing laws. According to the explanatory summary of the cuts published by the administration, these organizations advocate “against single family neighborhoods and promote radical equity policies.”
That characterization is strongly disputed by Caroline Peattie, executive director of the Fair Housing Advocates of Northern California. Federally recognized nonprofit fair housing groups processed 74% of all fair housing complaints submitted across the country in 2023, according to data compiled by the National Fair Housing Alliance. The remainder go to federal and state housing regulators.
A recent example: In 2022, Peattie's organization received a complaint that a Nevada-based appraisal company was systematically undervaluing homes owned by Black and Latino Californians. The nonprofit investigated and submitted a complaint to the state. The California Civil Rights Department reached a settlement with the appraisal company in mid-April.
If all the cuts go into effect as proposed, Fair Housing Advocates of Northern California would lose roughly 75% of its funding, said Peattie.
“It’s just appalling,” she said. “When the fair housing organizations go away, then what?”
The across-the-board cuts come after months of legal battle between fair housing organizations and the administration. In February the Department of Government Efficiency, helmed by Elon Musk, abruptly terminated a key source of congressionally authorized funding for dozens of private fair housing organizations, including Fair Housing Advocates of Northern California. The groups sued. With that lawsuit pending, the funds, appropriated for fiscal year 2024, “are still in the ether,” said Peattie.
Last month, Congress passed a bill to keep government spending at current levels from the prior year, meaning that fiscal year 2025 spending is in a holding pattern for now.
“But as for fiscal year 2026, all bets are off,” said Peattie.
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
