Federal homelessness funding cuts loom for Tennessee, could put more on streets

Federal funding cuts proposed by the U.S. Department of Housing and Urban Development could cause about 2,300 Tennessee households to lose housing support. (Photo: John Partipilo/Tennessee Lookout)

Kipp is a former chef who found himself in a Nashville shelter for homeless men after health issues made it impossible for him to continue to work and pay his rent. He was eventually hospitalized and nearly died before slowly climbing his way out of homelessness with the help of service providers who linked him with a housing choice voucher.

I met Kipp while I was following several peoples’ journeys from homelessness to housing for a monthly radio show/podcast I co-produce for Nashville Public Radio called In My Place, which shows that most people we see on our streets are unable to access housing on their own.  

He’s one of thousands of Tennesseans who could be affected by planned federal funding changes to the Continuum of Care (CoC) program —  which allocates homelessness dollars to designated geographic areas in which stakeholders collaborate to build a homeless crisis response system — that were leaked to Politico, a national news outlet.

Tennessee, which has a shortage of more than 127,000 rental units for extremely low-income households, currently receives $43.8 million in federal funding that goes to local service providers who work on ending homelessness. Under the proposed federal changes, local housing programs are at stake, and people like Kipp could lose their housing supports.

The CoC Program is managed by the U.S. Department of Housing and Urban Development (HUD), which dictates how these funds are used.

The CoC Program awarded roughly $3.6 billion to CoCs nationwide for the current year. Of those funds, about 87% are dedicated to permanent housing programs and support services. According to Politico, HUD plans to cap this funding allocation for permanent housing programs to 30%.

There is also a possibility that HUD will cut the overall CoC Program funding by about half and shift the remaining program dollars toward temporary housing, which includes emergency shelters and temporary housing.

While we need more dollars for shelters and other temporary units, without also offering more permanent housing, we will create a bottleneck, and eventually more people will spill out onto our streets and into encampments.

Last winter, I met Denny, a 70-year-old man who was sleeping in a Nashville park, but was displaced due to renovations to the outdoor shelter he used. He was legally blind and could not find his way around in another location or in a mass shelter.

Several of us were able to make connections, and his case manager helped him move into a temporary apartment he now shares with others. Thanks to being in that temporary program, he was able to access health services to get the needed eye surgery that enabled him to see again. 

Cutting the CoC Program will limit options for people like Denny, who are not even receiving rental assistance yet. Hundreds of Tennessee seniors rely on the continuation of federal rental assistance programs, or they will be forced to choose between paying for medication, food or rent.

Housing inventory data collected annually by HUD for each of Tennessee’s CoCs shows that 7,469 beds were considered as permanent housing in 2024, or about 5,203 households.

About 3,300 households are placed in permanent supportive housing programs, which offer ongoing rental assistance for people like Kipp and Denny who have disabling conditions.

If those permanent supportive housing programs are capped at 30%, more than 2,300 Tennessee households could be tossed out of their homes by this looming funding change. 

The worst part is that with a renewed focus on forcing people who are homeless and have a disabling condition, such as a mental illness, into treatment facilities or jails, we’ll waste a ton of money.

The federal CoC-funded permanent housing programs are significantly more cost-effective compared to incarceration or a hospital stay. A permanent supportive housing program for people with severe and persistent mental illness costs about $80 per day. In comparison, a jail stay in Davidson County costs $115 per night, and an inpatient psychiatric bed at East Tennessee Behavioral Health has a per day cost ranging from $675 to $2,500.

Tennessee congressional representatives should be prepared to answer questions about HUD and these funding changes. We need to maintain the current funding levels and continue to invest in permanent housing programs that support Tennesseans who are poor, disabled and deserve safe places to live — like Kipp and Denny.