Alliance Alert: The Alliance for Rights and Recovery is staunchly opposed to the Trump administration’s sweeping changes to federal homelessness funding, which threaten to strip New York of $109 million annually and destabilize thousands of supportive housing units across the state. As Crain’s reports, more than 8,400 supportive and rapid rehousing units in New York City alone, and roughly 14,000 statewide, could lose critical Continuum of Care support under these new rules. These are homes that people rely on to remain stable, connected, and safe. Removing this funding puts thousands at immediate risk of returning to the streets or shelters.
This policy is not a reallocation, it is a dismantling. By slashing funding for permanent supportive housing by two-thirds and shifting resources toward short-term, transitional programs with mandatory treatment and work requirements, the federal government is abandoning proven, voluntary, recovery-oriented models that have kept vulnerable New Yorkers stably housed for years. Supportive housing saves lives and prevents costly hospitalizations, incarcerations, and ongoing trauma. Abandoning long-term assistance in favor of rigid, time-limited support will leave people unable to afford rent in an already unaffordable housing market.
We are also deeply alarmed by HUD’s new authority to deny funding to organizations based on past work to advance racial equity, gender inclusivity, and harm reduction. This effectively allows the administration to penalize providers for complying with previous federal requirements and to weaponize homelessness funding for political purposes. Such a policy undermines local expertise, jeopardizes programs serving communities of color and LGBTQ+ New Yorkers, and places ideology above human need.
Supportive housing is one of the most effective interventions for people living with mental health challenges, substance use concerns, and histories of trauma. These sweeping federal changes would unravel decades of progress and cause direct harm to thousands who rely on long-term, stable supports.
The Alliance will continue working with partners, advocates, and elected officials to oppose these devastating cuts, defend Housing First principles, and protect the infrastructure New Yorkers depend on. We call on state leaders, members of Congress, and community partners to stand united against this harmful policy shift and ensure that every New Yorker has a safe, stable place to call home! Continue to monitor this email to learn about advocacy opportunities to protect these critical services.
New Fed Policy Will Cost New York $109M and Thousands of Supportive Housing Units
Ethan Geringer-Sameth | Crain’s Health Pulse | November 20, 2025
The city could lose up to $109 million a year for supportive housing under a new Trump administration policy that could put thousands of once-homeless New Yorkers back on the street.
That is more than half of what the city receives through a funding stream from the Department of Housing and Urban Development known as Continuum of Care, a program that pays for operations or services at 135 permanent supportive housing sites for people at risk of homelessness, according to city Department of Social Services data shared with Crain’s after an inquiry. The funding is in jeopardy – and with it the long-term viability of 8,400 supportive and rapid housing units in the city – after HUD issued new funding criteria last week that cuts the number of existing projects eligible to receive funding by roughly two-thirds.
“We are literally talking about pulling money out of existing supportive housing initiatives,” said Department of Social Services Commissioner Molly Wasow Park. “If we cannot solve for it, it’s very likely those individuals will end up back on the street or in the shelter.”
News of the national policy shift was widely covered but this is the first time the local impact has been reported.
The change represents a shift in the federal government’s predominant approach to homelessness, from a permanent housing model to transitional and short-term programs that come with new participation requirements and restrictions on racial and gender equity and harm reduction elements. The program distributes $3.9 billion nationally, which will now be subject to the new parameters, with New York City receiving the largest share.
Supportive housing providers were blindsided by the policy, which was published in a notice of funding opportunity issued Nov. 13, months later than grants are typically announced and during a year initially slated to allow providers to apply for non-competitive grant renewals.
Due to the funding cap, at least 70% of current supportive housing covered by the program could not see grants renewed, according to Kristen Mitchell, an associate commissioner at the Department of Social Services and the co-chair of the city’s Continuum of Care Program.
The program pays the rent on 4,700 supportive units in the city and covers voluntary health, mental health and occupational services for people at risk of homelessness at 2,300 more. In total, 130 existing supportive housing projects across the city rely on it. Another 35 projects with roughly 1,400 units use the money for rapid rehousing and transitional housing for individuals moving from the street or shelter into a more stable living situation.
Because of the late application date, scheduled for Jan. 14, just two weeks before existing contracts begin to run out, some providers will see their funding lapse beginning on Feb. 1, even if they do ultimately get approved for a renewal, said Pascale Leone, executive director of the Supportive Housing Network of New York.
“This [notice of funding opportunity] represents probably the most dramatic shift in homelessness policy in a generation,” she said.
The city currently receives a total of $176 million a year under the program, 92% of which goes to permanent supportive housing, Mitchell said. The guidance shifts most of the funding to time-limited transitional housing for unhoused individuals and people fleeing domestic violence, and adds requirements to participate in health and social services. For the limited number of new supportive housing units that are funded, the new policy restricts them to people with physical disabilities and seniors, displacing those with mental health and substance use issues alone in a shift from previous administrations, including President Donald Trump’s first term, Mitchell said.
Providers will be subject to a “merit review” where they will be graded on criteria including whether they have currently or previously had programs that support racial equity and gender nonconforming individuals and harm reduction activities, like safe-consumption sites. Some of those providers offered those services under previous grants, putting them in an impossible position to receive a renewal, Leone said.
The shift could threaten the city’s long-term goal of building or preserving 15,000 supportive housing units over 15 years, begun under Mayor Bill de Blasio and continued under Mayor Eric Adams. Last year, the city started 1,900 new units, according to the Mayor’s Management Report.
Mayor-elect Zohran Mamdani made affordable housing a centerpiece of his campaign and has set a goal to create 200,000 units of affordable housing. He has said he wants to take $108 million from the city jails budget to create more supportive housing for people cycling between homelessness and incarceration.
Statewide, close to 14,000 units are at risk, including roughly 5,000 in congregate sites located in 110 mixed-use multifamily buildings, according to the Supportive Housing Network. Those buildings, 75% of which are located in the city, receive more than $1.4 billion in state and local capital subsidy, low-income housing tax credit equity and private debt, according to the group.
“These are investments that can be destabilized overnight,” Leone said.
The Department of Social Service is working on a contingency plan to mitigate the damage but the scale of the changes have been swift and severe, said Park.
“There are a lot of moving pieces but whether we’ll be able to get to 100% is very uncertain,” she said.
Nov. 11, 2025: This article has been updated to reflect that new federal criteria cuts the number of existing permanent housing projects eligible to receive funding by roughly two-thirds, and restrictions on supportive housing for people with mental health or substance use issues alone apply to new projects, not ones being renewed.