Trump’s ‘Skinny Budget’ Could Devastate Homeless Services and Affordable Housing
Credit Image: © Daniel Torok/White House/Planet Pix via ZUMA Press Wire
Trump’s proposed 2026 budget slashes more than $33 billion from HUD programs, threatening affordable housing, rental assistance, and homelessness services just as the nation faces record levels of housing insecurity.
The Administration’s Proposed 2026 Budget Would Gut Funding for Affordable Housing, Rental Assistance, and Homelessness Programs
The Trump administration released its fiscal year 2026 budget plan on May 2, which outlines roughly $186 billion in total spending cuts compared to the previous year.
Included in those cuts are roughly $33 billion that the Department of Housing and Urban Development uses to fund homelessness assistance programs, fair housing projects, and affordable housing developments. Advocates say the cuts, if enacted, would significantly hinder their ability to provide services at a time when homelessness is growing rapidly across the U.S.
“The proposals outlined in this preliminary request are not only untenable, they are unconscionable,” Renee Willis, interim CEO at the National Low Income Housing Coalition, said in a statement.
“At a time of rapidly rising rents, increasing economic hardship, and a record number of people experiencing homelessness, the Administration should be asking Congress to expand – not slash – federal investments in affordable housing and homelessness assistance, and working with Congress and communities to ensure these vital resources are available to every household in need,” Willis continued.
More than 80% of the total proposed cuts would be taken from HUD’s state rental assistance programs, accounting for roughly $26.7 billion in all, according to the skinny budget.
Rental Aid Cuts and Time Limits Could Spark a Wave of Evictions
The budget request lists multiple reasons for cutting the federal rental assistance funding. For starters, the Trump administration wants to transform the program from a federally-managed program to a state-based one. The administration also seeks to institute a two-year cap on rental assistance for able-bodied adults and prioritize funding for elderly and disabled people.
This change could significantly disrupt the ability of several states to prevent evictions, which are one of the primary causes of homelessness. According to data from Princeton’s Eviction Lab, there were more than 70,000 evictions over the last month in the 10 states and 36 cities the lab tracks. Altogether, more than 1 million eviction cases were filed in the last 12 months.
“This plan will drive more people into homelessness, especially in places like New York where two-year limits on housing subsidies would push thousands of people into crisis,” Rachel Fee, executive director of the New York City Housing Conference, said in a statement.
Cities Sue Federal Government Over Rescinded Housing Grants
New York City and seven other cities filed a lawsuit on May 2 against the federal government over its attempts to rescind rental assistance money that was previously committed. Other cities that signed on to the lawsuit include Boston, San Francisco, and Columbus, Ohio. The cities argue that the federal government is seeking to coerce them into adopting federal policy stances against Diversity, Equity, and Inclusion measures by rescinding the funds.
“The new conditions the U.S. Department of Housing and Urban Development has placed on congressionally approved and previously awarded housing grants to New York City are illegal under longstanding constitutional and statutory principles,” New York City Corporation Counsel Muriel Goode-Trufant said in a statement. “Our legal effort seeks to protect tens of millions of dollars in funding that support vital social services in our communities.”
Billions in Community Programs Could Be Eliminated Entirely
Other programs that are on the chopping block include the Community Development Block Grant, HOME Investment Partnerships Program, the Homeless Assistance Program Consolidations, and Pathways to Removing Obstacles for Housing. Combined, these programs could have more than $5 billion of funding stripped away if Trump’s 2026 budget passes without amendments.
The CDBG program would be eliminated under Trump’s budget, which would pose significant challenges for states to build more affordable housing. CDBG funds a wide range of economic development activities, including affordable housing and infrastructure projects.
The Trump administration argued in its Discretionary Budget Request that the CDBG program is “poorly targeted” and could be better administered at the state and local levels. The administration called out projects like a theatre arts program for students and public swimming pool renovations in Connecticut’s “Gold Coast” as examples of wasteful spending, even though these projects occurred after Hurricane Sandy devastated the area in 2012.
Ending the HOME Investment Partnerships Program could also pose serious challenges for public housing agencies to expand the supply of affordable housing. The Trump administration argued the program increases the regulatory burden for homebuilders and that states are better positioned to oversee the program going forward.
“Eliminating these programs would make it more difficult for communities to provide needed services and increase the supply of affordable housing,” the National Association of Housing and Redevelopment Officials said in a statement. “The proposals in the President’s budget would have devasting impacts on communities across the country.”
Experts Warn Cuts Will Ripple Across Urban, Rural, and Tribal Areas
Ending these programs without identifying sustainable alternatives could also make it more difficult to address the growing rates of homelessness in the U.S., said Enterprise Community Partners CEO Shaun Donovan. As of 2024, there were more than 771,000 Americans experiencing homelessness, representing an 18% climb from 2023. Nearly one-third of that total were people experiencing unsheltered homelessness, meaning they sleep in areas not fit for human habitation, like tents, temporary structures, or vehicles.
“These cuts won’t just affect large cities; their impacts will ripple across small towns, rural areas, and Tribal communities,” Donovan said in a press release. “Without viable alternatives, cutting housing programs will drive up the cost of living and place heavier burdens on seniors, low-income families, veterans, and millions of others who rely on stable, affordable housing to thrive.”
Now Is the Time to Demand Compassionate, Effective Policy
Now is not the time to be silent about homelessness. Unhoused people deserve safe and sanitary housing just as much as those who can afford rent or mortgage.
Poverty and homelessness are both policy choices, not personal failures. That’s why we need you to contact your officials and tell them you support legislation that:
- Streamlines the development of affordable housing
- Reduces barriers for people experiencing homelessness to enter permanent housing
- Bolsters government response to homelessness
Together, we can end homelessness.
Robert Davis
Robert is a freelance journalist based in Colorado who covers housing, police, and local government.
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