If Metro does not step in, more than 100 Nashvillians are at risk of losing their permanent supportive housing by May 2026. Under the announced federal funding changes to the local Continuum of Care (CoC) program competition, hundreds more will miss out on permanent housing opportunities moving forward.
The CoC program offers a major homelessness funding formula to specific local geographic areas, including Davidson County, where stakeholders work together to build a homeless crisis response system. The U.S. Department of Housing and Urban Development (HUD) oversees those funds.
Under HUD’s new funding priorities, Nashville will be forced to reduce the CoC dollars spent on permanent housing from about $10.3 million to about $3.14 million.
The Trump Administration’s focus has been to move away from the evidence-based Housing First approach and shift funding from permanent housing, which ends homelessness, to transitional housing with mandated support services. Under HUD’s own homelessness definitions, people living in transitional housing are still considered homeless.
The consequence could mean that nationwide potentially 170,000 people could lose their housing through this extreme funding shift.
Let’s take a closer look at our local funding. Currently, Nashville receives $11.38 million in federal funds through the U.S. Department of Housing and Urban Development’s (HUD’s) CoC Program (plus $465,700 in planning funds). The $11.38 million are allocated across 10 organizations and fund a total of 20 different programs. About 90 percent ($10.3 million) of all programs in Nashville are dedicated to some form of permanent housing where a client holds a one-year lease.
According to the Office of Homeless Services, which serves as the lead agency for the Nashville-Davidson County Continuum of Care, the CoC grants currently provide permanent housing for 826 people, including 302 children, 436 disabled persons, 220 survivors of domestic violence, 80 who are 65 years or older, and 23 veterans.
These 826 people are served by 90 percent of the CoC funds, which will be required to be reduced to no more than 30 percent, from $10.3 million to $3.4 million.
When we talk about permanent housing, we are looking at three program types:
- Permanent Supportive Housing, totaling $5 million here in Nashville;
- Rapid Rehousing, totaling $3.5 million; and
- Joint Transitional to Rapid Rehousing, totaling $1.8 million.
While Rapid Rehousing and Joint Transitional to Rapid Rehousing programs help people access one-year leases and offer temporary and partial rent assistance and support services, any cuts to Permanent Supportive Housing programs will ensure people are going to lose their housing — unless there are local dollars to pick up the slack.
The people in those permanent supportive housing programs are what need to be the major priority for our city leaders as Metro currently has the funds to help keep them in housing permanently.
Nashville CoC leaders have already determined that they intend to focus on saving as many permanent supportive housing grant dollars as possible, meaning that $3.4 million of the currently $5 million in permanent supportive housing projects may be secure. The remaining $1.6 million need to be made up locally to keep people housed.
The Metropolitan Development and Housing Agency (MDHA) holds the largest portion ($3.3 million) of permanent supportive housing dollars under the CoC funding, followed by Urban Housing Solutions with $1.2 million.
Danielle Allen, MDHA’s assistant director of communications, said that MDHA will apply for the entire $3.3 million in CoC funding, but is “also working on a contingency plan for the anticipated reduction in funding.”
Currently, close to 350 people are served by MDHA’s Shelter Plus Care program, which offers rental subsidies and requires ongoing support services.
Brent Elrod, managing director at Urban Housing Solutions (UHS), said in an email that UHS provides permanent supportive housing to 96 people through their CoC grant, fielding referrals for another eight apartments.
“We are still evaluating our options for a FY25 application, but HUD’s strict cap in permanent housing dollars means that UHS likely will lose much if not all of our funding,” Elrod said. “If that happens, many if not all of the residents currently supported by our PSH program will lose their housing subsidy starting in May 2026 and, worst case, they may potentially become homeless again.”
Elrod continued that the UHS team, “will do everything we can to avoid that outcome, of course, but I think the only real safety net — and our current contingency plan — is for Metro government (and hopefully also local foundations) to secure/pool funds like the Metro Rapid Rehousing Fund to provide rental assistance until each of our residents can secure their own Section 8 Housing Choice Voucher.”
The Office of Homeless Services (OHS) held its first contingency planning call on Nov. 20 and will continue to facilitate conversations with local nonprofits regarding this year’s HUD funding competition, but it is unclear whether OHS intends to utilize some of its own budget to ensure Nashvillians won’t lose their homes due to the HUD changes. On the same day, 20 states filed a federal lawsuit to block the Trump administration from implementing the sweeping changes to the CoC program.
“Should the Nashville CoC be limited to a 30 percent renewal for Permanent Housing funds, it is inevitable that a large number of clients currently in Permanent Housing will lose potentially years-long safe, stable housing,” said Demetris Chaney Perkins, OHS’ public information coordinator, in a written statement. “Given that these clients experience a disability of some kind — as required for program participation — they would be at a high risk of returning to unsheltered homelessness. Indeed, clients who are currently in subsidized Permanent Housing would not qualify for transitional housing programs unless they first return to homelessness.”
Metro Council provided OHS with an additional $5 million budget increase in the current fiscal year, including at least $2 million that seemed to be dedicated to permanent supportive housing, which may not have been allocated to a specific program yet. OHS has an overall budget of more than $11 million.
Metro cannot easily make up the $6.9 million in permanent housing funds we’ll see cut by the CoC program.
However, if — as announced — the local CoC leaders prioritize permanent supportive housing and potentially save MDHA’s Shelter Plus Care program, then Metro certainly can step in and ensure that the more than 100 people who are currently in other CoC-funded permanent supportive housing programs remain in their homes.