The US Department of Housing and Urban Development has quietly announced one of the most drastic federal rollbacks in homelessness policy in decades: a massive cut to permanent housing under the Continuum of Care (CoC) program, with more than half of its 2026 funding diverted to transitional housing and compliance-based services. HUD’s own internal estimates warn that up to 170,000 people could lose housing as a result of the shift. For millions of Americans, especially those on the margins, this is not a policy adjustment; it is the beginning of a humanitarian disaster.
To understand how we arrived here, it is not enough to point at the Trump administration, the ideological crusade against “Housing First,” or the White House Faith Office now shaping federal grantmaking. One must also examine the educated neoliberals who built and normalized the system that made this possible.
HUD’s policy change overturns decades of federal commitment to permanent supportive housing, an evidence-backed model that dramatically reduces chronic homelessness. The new Notice of Funding Opportunity caps permanent housing at just 30 percent of CoC dollars, down from 87 percent in prior years, while the remainder is funneled toward transitional housing, work or service requirements, mandatory treatment, and faith-based compliance programs. The total funding for 2026 is roughly $3.9 billion across 7,000 grants. That amount, spread across hundreds of thousands of people experiencing homelessness, is barely sufficient to provide minimal assistance, let alone stable housing or the comprehensive services this population needs. One-third of existing programs will run out of funds before the new awards are issued in May, leaving vulnerable individuals exposed to eviction during the harshest months of winter. Ann Oliva, CEO of the National Alliance to End Homelessness and a former HUD official, described the rollout as deeply irresponsible, warning that the administration is setting communities up for failure.
For decades, U.S. policy has been shaped not just by conservatives but also by a sprawling class of highly educated managers: MBAs, MPPs, JDs, think-tank fellows, foundation executives, nonprofit administrators, and “innovation” consultants. They came from America’s elite universities, fluent in market logic, managerialism, and austerity politics. They preached efficiency, accountability, metrics, and self-sufficiency. Many also personally accumulated wealth, often owning multiple homes, benefiting from investment income, and exploiting loopholes to minimize or avoid taxes. Meanwhile, the programs they manage shrink support for the poor and vulnerable.
Through their influence, housing became a program, not a public good. Public housing construction largely disappeared, replaced by a grant-driven, nonprofit marketplace controlled by elite professionals. Even the funding allocated for CoC programs, though nominally in the billions, is deliberately minimal. This scarcity forces competition, instability, and suffering among poor people. Nonprofit executives, most of whom depend on federal contracts and foundation dollars, rarely challenge the economic and political structures that produce homelessness. Accountability rhetoric replaced structural change, reframing homelessness as an issue of individual behavior rather than a systemic failure. The academy normalized the idea that poor people should suffer, teaching a generation of managers to prioritize markets, metrics, and “innovation” over human need. This bipartisan, university-trained professional class laid the foundation for the HUD cuts now threatening hundreds of thousands of lives.
HUD argues that the new model “restores accountability” and reduces the purported waste of Housing First, but decades of research contradict that claim. Permanent supportive housing reduces chronic homelessness, lowers emergency and policing costs, stabilizes people with disabilities, and is cheaper than institutionalization or shelters. Transitional housing with mandatory compliance, on the other hand, repeatedly pushes people back to the streets, disproportionately harms people with disabilities, increases mortality, inflates administrative costs, and creates churn rather than stability. The policy is not a mistake; it reflects the calculated priorities of an elite managerial class whose worldview demands austerity for the poor while allowing them to flourish materially.
The response in Washington has been striking. Forty-two Senate Democrats warned HUD that the shift violates the McKinney-Vento Act, undermines local decision-making, and rejects decades of federally funded research. Even twenty House Republicans urged careful implementation to avoid destabilizing services for seniors and disabled people. Yet decades of neoliberal policymaking—funded and legitimized by universities, foundations, and think tanks—have already created a system in which poverty and suffering are baked into federal policy. This latest HUD action simply codifies that worldview.
The crisis unfolding now is not just the product of Trump’s ideological war on Housing First. It is the logical endpoint of decades of privatization, the erosion of public housing, elite consensus around austerity, credentialed managerialism, the nonprofit-industrial complex, the foundation-university revolving door, and the belief—deeply embedded in higher education—that markets and metrics should govern everything. Many of these policymakers and nonprofit executives own multiple homes, refuse to pay taxes, and structure federal policy to ensure the poor remain dependent, unstable, and suffering. The people most directly harmed are those with the least political power: disabled people, elderly tenants, veterans, people with serious mental illness, women fleeing violence, and families trying to survive an economy that no longer works for them. Behind them stands a class of educated neoliberals who built the systems that made this outcome possible, often congratulating themselves for “innovation” while allowing misery to proliferate. This is not failure. This is design.
Sources:
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Politico, “HUD to Cut Permanent Housing Funding for Homeless Programs,” 2025.
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National Alliance to End Homelessness, internal HUD funding documents, 2025.
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Ann Oliva, National Alliance to End Homelessness, statements to POLITICO, 2025.
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McKinney-Vento Homeless Assistance Act, 1987.
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HUD Notice of Funding Opportunity, 2026 Continuum of Care Program.
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Executive Order: “Ending Crime and Disorder on America’s Streets,” White House, 2025.
