In Orange County, a simmering dispute involving the Trump administration and leaders of local housing programs threatens to push about 1,400 formerly homeless people out of rent-subsidized apartments and back to the streets, starting as soon as January.
Nationally, the standoff could have similar results. If the U.S. Department of Housing and Urban Development (HUD) succeeds in its bid to impose new spending limits for Continuum of Care, a program that sends federal money to regional governing boards around the country to combat homelessness, roughly 170,000 people could become homeless over the next year or so, according to an estimate from the National Alliance to End Homelessness.
Many local residents who live in rent-subsidized apartments – most of whom are disabled or elderly or both – are only now learning that they are at risk of losing much of that help, in part because nobody has anything concrete to tell them.
Orange County housing officials who help run the local Continuum of Care effort said they believe HUD’s requests, which have been made clear only in recent months and without much public notice, probably will be enforced, possibly as soon as Jan. 1. But they also note that the administration could shift gears, as it has on many issues of late, or it could be forced by the courts or Congress to push off any new rules for at least a year.
In recent weeks, local housing advocates met with Orange County House members to see how HUD’s proposals could be modified or delayed. Though that didn’t pay off with any local Republican support – which is considered essential in this debate – Politico reported on Oct. 27 that 22 GOP House members signed a letter urging HUD to delay its request, saying it could result in a spike in homelessness.
But HUD – which could not be reached for comment during the government shutdown – has not yet budged.
“We are, unfortunately, having to prepare for changes to the HUD program that are likely to come down the pipe that could be very difficult,” said Becks Heyhoe-Khalil, executive director of Orange County United Way’s homelessness initiative, United to End Homelessness.
Heyhoe-Khalil noted that the local programs at risk if HUD’s proposals are enacted are “very high performing, in terms of keeping people housed.”
She also predicted that most locals won’t like the results if HUD’s changes are enacted.
“Orange County really wants to help people remain housed,” she said. “Our community doesn’t want to see people who have experienced homelessness fall back on the streets.”
At least one beneficiary who has served as a board member on the county’s Continuum of Care programs – a disabled, working mother of two – expressed frustration that a shift in federal policy might push her family back to the streets and fast-track a wave of other evictions.
“I’m not saying they don’t have any right to change things. But there’s a way of doing this that would give people time to prepare and plan,” said Nichole Gideon, who added that her six-year stint in a rent-subsidized one-bedroom apartment in Anaheim is a key reason she’s on track to graduate next year from Cal State Fullerton with degrees in sociology and philosophy.
Gideon has been able to work part-time, go to school and raise two sons, in part, because of a program that lets her spend no more than 30% of her income, whatever it might be in any given month, on rent. Without it, she said, her uncluttered, $2,000-a-month apartment – which currently includes a sheet to divide sleeping areas – wouldn’t be within her reach. She believes she’ll be out of the program soon after graduating, and is “eager to join the workforce.”
“There’s a narrative that people in housing programs are ‘less than,’ or not contributing. But I’d say it’s the opposite,” Gideon said.
“Some of us are working harder than anyone could imagine … to learn to contribute to society. And we can’t do it without these community groups and programs that support us with housing.
“It’s said a sign of a civilized community is how it treats its weakest people,” she added.
“This change would not put us in a glowing light.”
Housing first or treatment first?
Though the dispute between HUD and local housing advocates touches on the byzantine world of housing services and federal funding, local officials and nonprofit leaders, and reports published in Politico, describe a fairly simple disagreement between the administration and housing experts over housing strategy.
In the second administration of President Donald Trump – who as a 2024 presidential candidate promised to use police or military to force homeless people into “tent cities” or face incarceration – HUD has begun to tell housing officials, locally and around the country, that the agency wants to reduce spending for any so-called housing-first programs run as part of the Continuum of Care.
Housing first describes a strategy of fighting homelessness by placing qualified people into subsidized dwellings, usually low-income apartments, without any preconditions, such as sobriety or mental health care.
Instead, HUD wants Continuum of Care efforts to focus more on transitional housing, meaning beneficiaries will be required to work or volunteer, seek sobriety treatment and submit to mental health care, as a condition of receiving financial assistance. Such programs also are offered in housing-first models, but they usually come later and are voluntary.
Numerous studies have found that housing first is the more effective strategy when it comes to combating homelessness. That’s why the model has been pushed by federal housing officials in every administration – including Trump’s first term – since George W. Bush’s first term in office. And while it’s true that homelessness has exploded into a crisis over the past 15 years or so, many experts – of all political stripes – argue that housing first has been a positive, and many have urged more spending on such programs.
A 2023 federal report looked at the results of multiple studies that compared housing-first initiatives with treatment-first plans. Experts found that housing-first programs kept people off the streets, significantly lowered costs for taxpayers and were particularly good for “veterans and people with a history of substance abuse, mental illness challenges, domestic violence, and chronic medical conditions such as HIV/AIDS.”
That report was compiled by HUD.
Now, the same agency is pushing a fundamentally different strategy.
HUD wants to regulate local control of Continuum of Care by limiting housing first-related spending to no more than 30% of the federal money received in any given year. In Orange County, that would be a huge change. Last year, the local Continuum of Care received about $33 million from HUD, and roughly 85% of that money was spent on two dozen programs that fall under the housing-first model.
Doug Becht, director of the Office of Care Coordination in Orange County, said the new rules would take away about $19 million of last year’s HUD money, meaning less or zero help for more than 1,100 families, or about 1,400 people in all.
“These are people who really rely on these programs, elderly people and disabled people. And they’re really successful with it; they stay housed,” Becht said. “Taking away this funding would greatly harm a lot of lives.”
Sticker shock
Others working to help people experiencing homelessness transition away from the streets also view the proposed HUD rules skeptically.
“I believe, strongly, that the No. 1 problem for homeless people is that they’re homeless. So let’s solve that biggest problem first, and then help them in other ways later,” said Dawn Price, chief executive of Friendship Shelter, a Laguna Beach-based nonprofit that provides housing for formerly homeless people in south Orange County.
Price noted that her agency posted a 100% retention rate last year, meaning none of the estimated 300 people living in subsidized dwellings via Friendship Shelter slipped back into homelessness. She said most of those clients also had some kind of wraparound services, meaning they were in programs involving everything from sobriety and mental health to job training.
“It doesn’t have to be either/or. That’s my point,” Price said.
“I don’t want this (HUD) change to happen at all,” she added.
“But if it does, I think we should all have time to talk it over and figure out how to keep helping the people who are succeeding. As it is, I don’t think anybody has had time to have those conversations.”
Price and others noted that the HUD’s new strategy, if implemented, might cause sticker shock for taxpayers. Though paying rent for a homeless person sounds like a huge expense, studies show housing-first programs are, among other things, cost-effective – at least when compared with the cost of letting people live unhoused.
A 2017 study conducted by economists at UC Irvine on behalf of the Orange County United Way found that the county was saving about $42 million a year because of housing-first programs. Though the overall cost of homelessness then was running local taxpayers about $299 million a year – in everything from police sweeps to construction of homeless shelters – a closer look revealed how some programs were more economically efficient than others. The cost of subsidizing rent for some people, according to the study, was more than offset by bigger savings in everything from tax-funded medical care and food to jail space.
Since then, inflation has driven up costs for shelter, which might reduce those savings. But it’s also driven up costs for other spending categories, all of which are likely to be tapped if HUD’s new rules boost homelessness.
Heyhoe-Khalil, among others, suggested a new evaluation is due but projected that the economics might be even more in favor of spending money to keep people off the streets and out of homeless shelters – something that might come if HUD’s proposals are implemented quickly.
That’s another reason advocates believe that if HUD won’t budget on its new strategy, it might consider following the rules established in the current Continuum of Care spending plan.
Until 2024, Continuum of Care plans were set annually. But late in 2024, HUD officials under then-President Joe Biden agreed to a two-year spending plan. If followed, it would expire late next year.
It’s one reason why Heyhoe-Khalil, among others, is pushing hard for HUD to reconsider its current proposal.
“We just want HUD to live up to the terms it agreed to,” she said.