Starting soon, formerly homeless Americans will face the prospect of going back on the streets because of a sudden change in federal policy. As many as 170,000 could lose their housing in 2026.
The U.S. Department of Housing and Urban Development (HUD) recently announced that it will drastically alter its $3.9 billion Continuum of Care homeless assistance program, which has helped millions of people move from homelessness to stability. The program that has long enjoyed strong bipartisan support provides housing that people with low incomes can afford and connects them to mental health care, substance-abuse treatment, and other vital support. The program has been a national model for saving lives and strengthening communities.
HUD’s sudden shift would redirect funds to temporary housing such as emergency shelters, impose work requirements for many people, even those with disabilities, increase involuntary psychiatric commitments, and require more policing by already overstretched departments.
The changes will wreak havoc on communities already struggling with homelessness. In my own state of Alabama, more than 2,200 Alabamians are at risk, including seniors, people with disabilities, veterans, and people fleeing domestic violence. HUD’s shift would eliminate more than half of Alabama’s supportive housing and rapid rehousing units. Approximately 839 households will likely lose their housing and face homelessness again.
HUD’s projections show that unsheltered homelessness in Alabama would rise by 31 percent. Shelters across Alabama are already full. When housing disappears, people quickly become unsheltered.
As a result, jails and hospitals will be overwhelmed. Community aid groups will shutter. Commercial and nonprofit housing developers will exit the market, reducing the supply of supportive housing even further.
Alabama stands to lose $14.6 million a year, forcing taxpayers to shoulder far greater downstream costs. Without permanent housing, people will cycle through emergency rooms and jails, costing Alabama an estimated $100.4 million annually in emergency room responses.
More than 1,000 charitable, business, and civic organizations have sent letters to lawmakers and the Trump administration raising the alarm. They know what’s at stake: a return to failed policies that punish people instead of addressing the root cause of homelessness – a severe shortage of affordable and supportive housing.
Monthly rents have spiked by $400 on average in the last four years. For every $100 in rent increases, homelessness rises nine percent, according to the U.S. Government Accountability Office. A record 8.4 million people live in “worst case” housing, living in inadequate housing or paying more than half of their income on rent. These people teeter on the verge of homelessness.
The housing-led policies that the government is about to abandon emerged after it tried and failed with other approaches, including those that HUD is now reviving. A federal court has paused the new policy, but the delay is only temporary.
Thirty years ago, when homelessness began surging, the dominant system involved creating hard-to-end shelters and recovery-focused transitional housing. To qualify, people had to be sober, take psychiatric medications, and have clean police records. Many returned to the streets. Only a third of those who entered these treatment-first programs exited successfully.
History shows that such punitive measures don’t work. Clearing tent communities, such as the recent evictions in Alabama, force people into other, harmful living situations. Arresting and fining the homeless or enforcing outdoor sleeping bans increase, not decrease, homelessness. Many who face arrest cannot pay their fines.
More than 100 deeply researched studies confirm that supportive housing is effective. It reduces emergency-room visits, psychiatric hospitalizations, and the need for drug detoxification services. It also leads to stable housing for people with severe mental health issues and reduces the revolving door of incarceration. Courts, hospitals, emergency services, foster care systems, and, yes, HUD itself, have reported lower costs because of these policies.
Alabama cannot afford to return to these ineffective and expensive approaches. Our housing shortages are already severe. On a single night in 2024, 4,601 Alabamians were experiencing homelessness, including 2,698 people living unsheltered. HUD’s proposal would accelerate this crisis dramatically.
Fortunately, a bipartisan groundswell against HUD’s policy is emerging on Capitol Hill. Forty-two Senate Democrats have asked HUD to stick with current law. Twenty House Republicans are urging HUD to renew grants under the current program.
Alabama has invested decades in building an effective, locally driven system. HUD’s proposal threatens to dismantle that progress. We must not allow that to happen.
Russell Bennett is Executive Director for Low Income Housing Coalition of Alabama.
