Alliance Alert: A deeply concerning new report highlights the real-world impact of recent federal housing policy changes, particularly shifts in HUD’s approach to homelessness that threaten to destabilize systems and push people out of housing.
Across the country, providers are warning that these changes could have devastating consequences. By moving away from proven Housing First approaches and imposing new restrictions and requirements, federal policy is putting tens of thousands of people at risk of losing access to stable housing. In some cases, providers report layoffs, program closures, and the potential loss of permanent housing for individuals who rely on these supports to remain off the streets.
These are not abstract policy changes. They are decisions that will directly impact whether people have a safe place to live, especially during times of extreme weather and rising housing instability.
At the Alliance for Rights and Recovery, we believe the federal government must reverse course immediately on these proposed changes to HUD housing programs. We must ensure that people are not pushed out of the housing they depend on and that the federal government continues to provide the resources needed to support people experiencing homelessness.
This moment also highlights a critical and ongoing failure in policymaking. The people most affected by these decisions, those with lived experience of homelessness and those working directly within these systems, are too often excluded from the table. Policies developed without their input risks causing significant harm, as we are now seeing unfold.
We must do better.
It is essential that:
- People with lived experience are meaningfully included in policy development and implementation
- Proven, effective approaches like Housing First are protected and expanded
- Federal housing programs remain focused on stability, dignity, and long-term solutions
Advocates, members of Congress, and legal rights organizations must push back against these harmful proposals through every available avenue. This includes legislative advocacy, legal challenges, and public pressure to ensure that these changes do not move forward.
The stakes are too high to remain silent.
We must act to protect access to housing, prevent homelessness, and ensure that the federal government continues to serve those most in need. The Alliance will continue to monitor developments and work alongside partners to advocate for policies that prioritize housing, recovery, and human dignity for all.
“A Grim March Toward Death”: What HUD’s New Homeless Policy Looks Like on the Ground
By Garrett L Grainger | Shelter Force | April 20, 2026
Editor’s Note: The author spoke with homeless services administrators for his research under condition of anonymity to allow for free expression of opinions about changes to funding.
“People are going to die,” a frantic homeless services administrator warned in early December 2025. Temperatures were plunging. Snow was falling. And just two weeks earlier, the Department of Housing and Urban Development (HUD) had released a notice of funding opportunity (NOFO) that upended the United States government’s Housing First approach to homelessness.
Threatened with massive cuts to homeless services, the administrator lobbied elected officials for stopgap funding to keep people housed amid freezing temperatures. But the indifference they encountered from lawmakers led them to conclude, “It’s not the people that they think are worthy of living.”
The Continuum of Care (CoC) Program is a federal program that funds a substantial portion of permanent housing interventions for people experiencing homelessness in the U.S. In 2024, the federal government recognized nearly 400 CoC jurisdictions and awarded over $3.5 billion to support housing and related services.
I’ve spent the past nine years studying how frontline workers in the U.S. implement CoC Program requirements with inadequate resources. Since October 2025, I’ve spoken with 64 administrators from 55 CoCs under the condition of anonymity about the impact of HUD’s new policy direction on their local homelessness systems. Their accounts offer a window into how this policy shift is unfolding on the ground and the dire consequences it may have for homeless systems across the country.
HUD Upends Its Homeless Policy
On July 24, 2025, the White House issued Executive Order 14321, directing federal agencies to treat homelessness as a public safety issue that requires draconian interventions previously discouraged by the federal government: expanded civil commitment, local bans on homeless encampments, the rollback of harm reduction strategies, and new conditions on federal housing assistance. On Nov. 13, 2025, HUD codified the principles of this order in a NOFO that threatened to invalidate two-year funding contracts signed in 2024.
The sudden reversal sent CoCs across the country into chaos. The NOFO required grantees to pivot from Housing First approaches to transitional housing models within weeks during the holiday season, even though Housing First had taken more than a decade of federal guidance, technical assistance, and relationship-building to implement.
A lawsuit was filed soon after.
Plaintiffs argued that the NOFO required federal grant recipients to violate federal statutes and regulations. A preliminary injunction was issued against the NOFO by a Rhode Island federal court on Dec. 19, 2025. HUD then promptly issued a revised NOFO, which the same court temporarily halted on Dec. 23. Local administrators waited in limbo for the Rhode Island court to decide whether the funding competition could proceed. A final decision is still pending.
In the meantime, some CoC grantees laid off staff, delayed recruitment, shed leadership, discontinued CoC participation, and/or closed affordable housing developments for permanent housing tenants.
Another NOFO for Fiscal Year 2026 is slated to be posted by HUD in June. Administrators expect funding requirements to mirror those included in the November NOFO, especially since HUD officials all but promised as much during a recent roundtable.
If HUD continues to violate federal statutes in its next NOFO—as it appears determined to do—litigation might follow, leading to further project delays. This could indefinitely prolong the crisis we’ve lived through over the past five months, weakening system capacity, increasing rates of homelessness, and overwhelming emergency services with unnecessary demand.
Right-Wing Think Tanks Capture HUD
HUD’s sudden about-face did not occur in a vacuum.
The Cicero Institute is an influential right-wing think tank that lobbies governments to overhaul their homeless policies. Founded in 2016 by Silicon Valley billionaire venture capitalist Joe Lonsdale, Cicero promotes “entrepreneurial” solutions to social problems. But its policy agenda isn’t a novel one. It is based on failed ideas from the 19th century that objectified and excluded the poor from public life.
On its website, Cicero emphasizes mental illness and substance abuse as primary concerns for addressing homelessness, a stance that implies that homelessness reflects a moral failure of individuals who succumb to vice and pose a public safety threat to law-abiding citizens. Rather than housing, people on the street require compulsory services in specific areas or centralized facilities, where the ostensible root causes of homelessness—mental illness and addiction—can be addressed by so-called experts. While this argument redirects attention away from economic changes like deindustrialization, welfare retrenchment, and inflation that have harmed working-class households, Cicero offers no convincing evidence to support either its explanation of homelessness or its policy recommendations.
Cicero has advanced its arguments through litigation that contributed to City of Grants Pass v. Johnson, a recent Supreme Court decision that expanded the authority of local governments to criminalize homelessness. It circulates model legislation aimed at rolling back Housing First and reintroducing coercive, institutional responses to homelessness. Several conservative states are implementing these proposals. In Utah, for example, state officials are planning to build a centralized facility outside of Salt Lake City where unhoused people from across the state will be compelled to move under threat of arrest, regardless of where they currently live in the state.
While these ideas may have originated at the Cicero Institute, they likely entered HUD through Trump’s appointees from Discovery Institute. Discovery Institute is a right-wing think tank known for promoting “intelligent design” and socially conservative policy. When they aren’t promoting creationism, Discovery Institute writers rail against “progressive” social policies like Housing First, tenant protections, and rent control, while promoting “free enterprise.”
Two political appointees linked to Discovery Institute are the public face of HUD’s NOFO. At a recent roundtable that was hosted by HUD, they promoted the same policies advanced by the Cicero Institute and circulated misinformation about Housing First. As I previously explained in a separate piece, these appointees falsely represented historical trends to blame the recent spike in homelessness on Housing First, while presenting transitional housing as the solution without any evidence.
Adding insult to injury, the same appointees ended their roundtable by blaming advocates of people experiencing homelessness and CoC administrators for the controversy surrounding the NOFO. They suggested that grantees are more concerned with losing their jobs than with helping service users escape homelessness.
“Like a Grim March Toward Death”
While CoC administrators have lots to say about the way HUD has managed the current transition, most aren’t opposed to reform. Although they acknowledged the value of permanent housing, many welcome opportunities to grow their stock of transitional housing, by including more temporary housing options with mandatory supportive services.
“A lot of the people that we work with are people [who] can’t be housed by conventional means. They can’t be housed by calling up a landlord [and] filling out an application, even if they had the money. So transitional housing could be a great component for them, allow[ing] them to stabilize long enough that the same agency could then take rapid rehousing dollars and find them a place,” one provider told me.
Administrators noted other groups that could benefit from transitional housing: homeless youth who lack skills to manage an independent tenancy, those leaving prison who need support while readjusting to society, and former substance users who require aftercare upon exiting inpatient treatment.
What administrators opposed was HUD’s approach to shifting resources from Housing First to transitional housing. Everyone I spoke with was concerned about the NOFO’s imposition of a 30 percent cap on permanent housing. With most service users in permanent housing, the new limit threatened to push 170,000 people who rely on CoC assistance back into homelessness.
“We’re not against transitional housing. We’re not against substance use treatment programs. …We are concerned about taking money from permanent supportive housing and switching it to transitional housing without an opportunity to navigate that change more responsibly,” another provider said.
Administrators said the number of people at risk of becoming homeless because of the 30 percent cap varied from tens to several thousand across CoCs. And each administrator had varying levels of access to stopgap funding. For some administrators, state and/or local governments committed funds to keep permanent housing tenants housed. But many were on their own and worried that service users would return to homelessness in the dead of winter, get locked up by the police, or die.
These dire concerns made success in the NOFO competition essential. However, the NOFO’s ambiguities made it hard for administrators to know if they were meeting HUD’s expectations. The requirement for 40 hours per week of customized services for program participants was a common point of confusion.
“Everybody in my role around the country was like, ‘What on earth does that mean? Does that mean you’re taking 40 hours of classes or are you including things like a front desk worker being onsite or direct care staff being onsite?’ They had never really got to defining what those 40 hours of supportive services meant.”
Everyone I spoke with defined this requirement as “infeasible.” In large rural communities, where transitional housing had to be delivered outside of a congregate facility, case managers would be unable to access service users every day to provide support. Service providers would have to employ and train a huge number of case managers within an unrealistic timeframe while HUD was potentially capping their permanent supportive housing funding at 30 percent. Without a clear definition of what HUD included in that 40-hour requirement, administrators didn’t know how to comply.
There were several other points of confusion. The NOFO’s scoring rubric includes points for having camping bans. While this requirement would be unproblematic in places where such legislation existed, administrators in places where governments have not explicitly banned camping were uncertain how to address that item in the application. Did ordinances that prohibit trespassing or loitering count? If not, how could CoCs pass an ordinance by local government within a month when they have no power to do so? How could Balance of State CoCs, which span multiple rural counties, pass an ordinance across all local governments or lobby a statewide ban within a month?
The NOFO also encouraged CoCs to work with healthcare providers and collaborate with law enforcement to address unsheltered homelessness and public disorder. But the document does not specify how that coordination should happen.
That ambiguity created confusion about how administrators should comply with this requirement. Some administrators understood the emphasis on coordination and treatment as implying increased data sharing across agencies, which raised ethical and legal concerns about client confidentiality.
How can CoCs comply with NOFO requirements that contradict state laws or local ordinances? How can CoCs adopt practices that are not based in evidence while still meeting performance requirements established by federal statute? CoCs could be in legal jeopardy if they violated those statutes.
HUD has been unable or unwilling to provide any guidance on these issues over the past months. One day after the NOFO was released in November 2025, and before administrators had a chance to thoroughly read the entire document, HUD held an “informational” webinar about the NOFO. Most characterized the webinar as a “PR stunt” that failed to answer substantive questions.
“The webinar was actively unhelpful,” one administrator said in January 2026, “in that the people presenting the information did not seem to understand their own policies.”
Several administrators noted that attendees could not see submitted questions and know which ones HUD ignored, which they said was unusual. HUD officials kept promising that NOFO guidance would be released, but it was never published, as administrators tried to meet a two-month deadline during the holidays. Almost every administrator I spoke to submitted multiple queries to HUD’s email system that either went unanswered, received a delayed response, and/or were contradicted by subsequent notifications. The clock was ticking, so administrators looked elsewhere for guidance: neighboring CoCs, state attorneys, national advocacy groups, expensive consultants, and even Facebook.
Nothing about this was normal.
Several administrators had been in homeless services for years or even decades. At the roundtable, the aforementioned political appointees claimed that HUD was providing applicants more time to revamp their systems than the Obama administration did when it realigned NOFO scoring with Housing First principles.
But the administrators I spoke with disagreed. One administrator compared the current funding application process to the one they experienced while shifting to permanent housing during previous administrations:
“When they changed to Housing First from Treatment First in the noughts, that was a 10-year process. That was years and them saying, ‘We’re going to make a change. And we’re going to tell you again: We’re going to make the change. And then we’re going to make the change, but we’re going to make it a bonus point [on the NOFO application].’ You had 5 to 10 years to step from Treatment First to Housing First, and for them to come in and say, ‘You have 60 days,’—it didn’t make sense,” an administrator told me.
Even when the COVID-19 pandemic started, HUD issued clear, consistent guidance on the new rules it was implementing, say some involved with CoC grants when that crisis started. In contrast, administrators say the recent shift to undirected funding mandates is “like a grim march toward death” because they feel helpless to protect service users from being pushed back into homelessness.
Playing It by Ear
CoC administrators are being forced to play it by ear and navigate this uncertain future without guidance from HUD. But HUD hasn’t abandoned everyone. I’ve seen emails in which HUD officials invited faith-based groups to private webinars that provided one-on-one NOFO guidance, but that invitation was not extended to any of the administrators I spoke with. This move is consistent with HUD’s decision to host a roundtable in Washington, D.C., that catered to faith-based groups, while the National Alliance to End Homelessness held a leadership conference in San Diego. HUD’s actions, either intentionally or unintentionally, appear consistent with Discovery Institute’s aim to expand the influence of religion in public services.
Even though the Rhode Island court injunction disrupted the November 2025 NOFO competition and required HUD to revert to FY2024 rules, delays in the release of FY2025 CoC funding have created uncertainty for service providers, some of which used or are using reserve funds to maintain housing placements. In this context, administrators questioned whether HUD would fully comply with congressional demand for funding continuity.
But aside from that added stress, CoCs already experienced consequences as time and resources were redirected from substantive projects to the NOFO competition. Some administrators said they would have developed programs to address the opioid epidemic in their communities, while others would have spent their time updating policies to improve accountability of grant recipients, hosting workshops for staff to enhance service delivery, or strategizing ways to expand funding for permanent supportive housing.
HUD may want to “move fast and break things.” But what gets broken in the process are people’s lives and local systems that deliver vital support to people experiencing homelessness. Vulnerable people suffer material consequences when federal housing policy is recklessly reshaped by ideology. Homeless policy is not a startup experiment. Systems that took decades to build cannot be rebuilt overnight once trust is broken. And while many people may not feel the effects immediately, they will when encampments grow across their communities and local governments can no longer afford to deliver basic services.
What HUD’s New Homeless Policy Looks Like on the Ground Shelterforce