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California braces for ‘Devastating’ Expected Cuts to Federal Homeless Housing Funds

October 8, 2025

of the Article California homelessness agencies are bracing for significant federal funding cuts from the Trump administration that would drastically reduce money available for permanent housing solutions. The administration reportedly plans to redirect funding from permanent housing to temporary shelter, capping permanent housing funding at just 30% of total homelessness funds compared to the current 87%. Counties throughout California are panicking as they may lose hundreds of millions of dollars, potentially forcing thousands of vulnerable residents out of subsidized housing and back onto the streets.

Who is affected

  • Thousands of California's most vulnerable residents currently in subsidized permanent housing
  • People with chronic disabilities who were homeless for years before finding housing
  • Individuals living on disability benefits who cannot afford market-rate housing
  • People with criminal records, poor credit, and eviction histories
  • Approximately 8,000 housing units in Los Angeles County alone
  • About 290 people in permanent housing in Santa Cruz County
  • At least 1,000 households in Santa Clara County
  • Local homelessness agencies and service providers across California
  • County Continuums of Care that manage federal homelessness funds

What action is being taken

  • Counties throughout California are holding emergency meetings to assess the impact
  • Local agencies are scrambling to move money around or re-label programs
  • Some counties are already reducing services and helping fewer people
  • Santa Cruz County has started winding down some services
  • Local officials are attempting to identify alternative funding sources
  • Sacramento County is preparing for potential staff layoffs and service reductions
  • Agencies are planning how to shift limited state funds to cover some federal losses
  • Counties are measuring the precise impact on their permanent housing programs

Why it matters

  • Permanent housing is widely recognized by experts as the most effective solution to homelessness
  • The funding cuts could reverse recent progress in addressing California's homelessness crisis
  • Vulnerable residents may be evicted and return to living on the streets
  • The cuts represent a major shift in federal homelessness strategy
  • Local agencies are already struggling with upcoming state funding cuts
  • Santa Cruz County's monthly housing placements could drop by as much as 75%
  • The funding changes signal a departure from the long-standing belief that permanent housing solves homelessness
  • The sudden nature of the changes gives providers no time to wind down programs responsibly

What's next

  • No explicit next steps stated in the article beyond the expectation that the federal government will issue a "notice of funding opportunity" this fall for its continuum of care program, which will officially outline the funding cuts.

Read full article from source: The San Diego Voice & Viewpoint