Commentary: Housing First helps people find permanent homes in Detroit − but HUD plans to divert funds to short‑term solutions

March 6, 2026

The U.S. Department of Housing and Urban Development revised its Continuum of Care funding approach in November 2025, shifting resources away from permanent supportive housing toward transitional short-term housing in what officials call a "treatment first" model. This policy change threatens Detroit's homeless response system, which could see its permanent housing funding drop from approximately $34 million to $11 million annually, potentially displacing hundreds of vulnerable residents. Twenty states including Michigan have filed legal challenges arguing the shift contradicts decades of research showing permanent supportive housing produces better long-term outcomes than temporary programs.

Who is affected

Approximately 1,725 people experiencing homelessness in Detroit, Hamtramck, and Highland Park on a single night
2,579 children in the Detroit Public Schools Community District who are doubled up, in shelters, hotels/motels, or unsheltered
Hundreds of families experiencing homelessness in the Detroit area
People with disabilities, chronic health conditions, and mental health conditions who rely on permanent supportive housing
Detroit area homelessness service providers
The Homeless Action Network of Detroit (local Continuum of Care coordinator)
20 states including Michigan (legal challengers)
City and county governments challenging the policy
Advocacy organizations challenging the policy

What action is being taken

Twenty states including Michigan, along with city and county governments and advocacy organizations, are challenging the policy revision in court
Detroit area homelessness service providers are seeking support from state and philanthropic partners
Local organizations are developing housing locally to offset possible federal funding reductions
A federal judge has issued a preliminary injunction that temporarily pauses HUD's funding shift

Why it matters

This policy shift matters because permanent supportive housing is one of the most rigorously studied and effective homelessness interventions, consistently reducing homelessness and improving health outcomes for people with disabilities. Research shows that transitional housing is less likely to produce long-term housing stability, particularly for families and people with disabilities, despite costing more per household. The change threatens to destabilize Detroit's homelessness response system at a time when the city's homeless population is growing significantly (16% increase from 2023-2024), potentially forcing vulnerable individuals back onto the streets. Housing instability increases reliance on emergency services like shelters, hospitals, and public safety systems, driving up taxpayer costs and straining already overextended local services.

What's next

HUD officials have stated that the agency intends to apply the changes in future funding rounds once the preliminary injunction is no longer in effect. The Homeless Action Network of Detroit projects that 235 new permanent supportive housing units are expected in 2026.

Read full article from source: bridgedetroit.com