The Trump administration is temporarily withdrawing a plan to overhaul federal grant funding for housing services.
The announcement comes in response to a wave of lawsuits filed by various state leaders, municipalities and nonprofits.
The withdrawal also comes hours after East Valley leaders warned they would have no way to backfill the federal funding for shelters.
The leaders warned that about 1,400 housing units in Maricopa County for the formerly homeless would be at risk if the Department of Housing and Urban Development moved forward with capping funds for “permanent supportive housing” from the Continuum of Care Program.
Permanent supportive housing means housing in tandem with other services like substance abuse treatment. A 2020 study found it to be more effective at preventing homelessness compared to other services.
Maricopa County faced a loss of $32 million in funding.
HUD said in a statement that “housing first” is a failed ideology which “encourages dependence on endless government handouts while neglecting to address the root causes of homelessness.”
“Housing first” means providing unhoused people with housing without requiring them to meet prerequisites regarding employment or other criteria, and offering other services after housing placement.
Democratic Arizona Congressman Greg Stanton disagreed with HUD’s characterization.
He argues there is plenty of evidence to show that supportive housing funded by Continuum of Care is effective in mitigating homelessness, while there is no evidence to show that cutting funding will help.
Stanton accused the Trump administration of prioritizing “ideology over evidence” and “disruption over sustainability” at the expense of low-income people.
“That's not just numbers on a spreadsheet,” Stanton said at a press conference on Monday. “That's almost 1,400 families, veterans, domestic violence survivors, and individuals with disabilities who will lose their homes, who will be back on the streets as a result of this policy change.”
Arizona Behavioral Health Corporation President and CEO Charles Sullivan said the funding cap would only increase homelessness.
“Imagine losing your housing of 30 years, not of any fault of your own, but on the whims of bureaucrats who, in their own words, just want to ‘try something different this year,’” Sullivan said.
“Many providers are being forced to redesign their programs that have functioned successfully for decades and all within 30 days. Due to a delay in the notice, housing programs may have to close as early as January," Sullivan added.
Tempe Vice Mayor Doreen Garlid said on Monday morning that the cuts would hit municipalities hard.
“When people lose housing, they don't just disappear. They end up in emergency rooms. They end up in jails, encampments, and are using our 911 system for help. There is more strain on our city services, and local communities foot the bill,” Garlid said.
Garlid said cities like Tempe, which are halfway through the current fiscal year, will struggle to adapt if grants expire at the end of the calendar year.
“In Tempe, some portions of our budget are planned five years in advance. Our annual budget planning starts almost as soon as the previous budget ends,” Tempe Mayor Corey Woods said.
Maricopa Association of Governments Community Initiatives Director Amy St. Peter noted that homeless shelters throughout the country are already at capacity.
Woods said raising taxes is typically how municipalities make up for funding gaps, but he and the Tempe City Council are not considering raising taxes on residents to make up for the loss of federal funding, if it goes.
“A lot of our residents are struggling to make it as it is and we do not want to increase that burden on those people,” Woods said.
Arizona Democratic Attorney General Kris Mayes is one of a coalition of state attorneys general and governors fighting the funding cuts in an ongoing lawsuit.
It’s one of multiple suits the HUD is facing.
HUD’s Continuum of Care website states it still intends to change the program.
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