Overview: A Budget Blueprint with Far-Reaching Implications

President Trump unveiled a budget proposal for the upcoming fiscal year that outlines important reductions in social, environmental, and educational programs. Housing programs aimed at assisting the poor,housing insecure,and unhoused face some of the most substantial cuts. These proposed changes could reshape federal housing policy and affect millions of lives, notably in states like california, where these funds support affordable housing, rental assistance, and homeless services.

The Governance’s Rationale

Russel Vought, the president’s budget director, detailed $163 billion in annual spending cuts in a letter to the U.S. Senate Appropriations Committee. These cuts are intended to be coupled with “unprecedented increases” in military and border security spending. According to Vought, the administration is targeting areas of spending deemed “contrary to the needs of ordinary working Americans and tilted toward funding niche non-governmental organizations and institutions of higher education committed to radical gender and climate ideologies antithetical to the American way of life.”

Key Cuts to Housing and Urban Progress

• HUD Cuts: A proposed $33.5 billion reduction to the Housing and Urban Development (HUD) department, representing a 44% decrease from current levels.
• Housing Choice Voucher Programme (Section 8): The White House proposes shifting the administration of the Section 8 program to states while concurrently cutting it’s funding in half.A two-year limit on assistance for single individuals is also suggested.
• Additional Voucher Cuts: Further cuts to four other housing voucher programs are projected to save $27 billion annually.
• Elimination of Economic Development Grants: Nearly $5 billion in savings would come from eliminating funds for local economic development grants, affordable housing developments, and initiatives to reduce regulatory barriers to new housing.

Potential Impact: Millions at Risk

The proposed cuts have raised concerns among affordable housing advocates,who fear widespread displacement and increased homelessness.

You’d be looking at millions of people out on the street virtually overnight.
Matt Schwartz, president, California Housing Partnership

Schwartz added, “There’s no way states could maintain the same level of assistance.”

Targeting “Woke” Programs

The administration’s budget wriet-up specifically denounces the Biden-era Pathways to Removing Obstacle Housing initiative as a “woke” program pursuing “radical racial,gender,and climate goals.” A $6.7 million grant to Los Angeles County for infrastructure planning and transit-oriented housing, aimed at reversing the region’s “legacy of past systemic racism,” was specifically highlighted.

Radical reshuffle of Homelessness Policy

Federal homelessness funding would be slashed by $532 million, accompanied by a significant shift in how funds are distributed. the Continuum of Care program,which funds long-term solutions like permanent supportive housing,would be replaced by the Emergency Solutions Grant program,which focuses on short-term solutions like shelters.

This would be a significant shift away from the solution to homelessness, which is housing, towards shelter.This budget is going to take away all the pathways to get out of shelter and into housing.
Alex Visotzky, senior California policy fellow at the National Alliance to End Homelessness

Though, the budget proposes a $1.1 billion increase “for the President’s commitment to ending veterans’ homelessness,” allocating funds to Veterans Affairs for rental assistance and support services. The U.S. Interagency Council on Homelessness, already weakened by the administration, would also be eliminated.

End of “fair housing” Enforcement?

The White House proposes eliminating a grant program that funds nonprofit legal aid organizations enforcing national fair housing laws, claiming these groups advocate “against single family neighborhoods and promote radical equity policies.”

Caroline Peattie, executive director of the Fair Housing Advocates of Northern California, strongly disputes this characterization.According to data from the National Fair Housing Alliance, federally recognized nonprofit fair housing groups processed 74% of all fair housing complaints nationwide in 2023.

Peattie’s association,such as,investigated a complaint in 2022 about a Nevada-based appraisal company systematically undervaluing homes owned by Black and Latino Californians,leading to a settlement with the California Civil Rights Department.

If the proposed cuts take affect, Fair Housing Advocates of Northern California would lose approximately 75% of its funding.

it’s just appalling. When the fair housing organizations go away, then what?
Caroline Peattie, executive director of the Fair Housing Advocates of Northern California

Legal battles and Future Uncertainty

These proposed cuts follow months of legal battles between fair housing organizations and the administration.In February, the Department of Government Efficiency terminated a key funding source for private fair housing organizations, prompting a lawsuit. While congress passed a bill to maintain current spending levels for fiscal year 2025, the future of fiscal year 2026 remains uncertain.