Trump’s cuts are poised to make San Francisco’s homeless problem even worse

Affordable apartments for retired seniors and veterans. Safe shelter for victims of abuse. Sober living for recovering addicts. 

These often unheralded programs aren’t ending homelessness on their own, but they are important to stemming the flow of people who may end up on the streets. 

And a major lifeline for these initiatives is beginning to sputter and could soon go dark.   

By slashing the workforce of the U.S. Department of Housing and Urban Development, the Trump administration has put billions in funding at risk, which means one of the few financial weapons San Francisco has to attack its housing crisis has been crippled.   

According to federal spending data, HUD has more than 100 active housing grants in San Francisco, totalling about $326 million. 

Of that, the city is set to receive $56 million this year for 35 homelessness assistance projects under HUD’s Continuum of Care program, an annual grant since 1994. The funds are meant to help organizations that assist vulnerable populations in achieving long-term housing stability. 

Affordable housing operators and nonprofit service providers create their budgets based on this bucket of aid, which can be used to acquire or rehabilitate real estate, cover operating costs, and provide rental assistance directly to residents. Among other recipients, the funds were earmarked for the construction of a 70-unit affordable housing project at 180 Jones St. and the conversion of a building at 42 Otis St. to supportive housing for young adults.  

But despite approval for the grant in January, San Francisco’s Department of Homelessness and Supportive Housing — which distributes the money — said it has yet to receive notification from the feds about when the funds might come, if they’ll be reduced, or if they’ll be nixed altogether. 

Whistleblowers at HUD previously told The Standard that even if the money does arrive, the staffing cuts at the agency mean the local office would be ill-equipped to manage the transfer of the funds to the city. Said one: “There will be no one left to run the programs.” 

In an email sent this week, an HSH manager told 20 grantees it could only pay 75% of their allotted amounts because of uncertainty surrounding federal funding. The funds are used to reimburse service providers for their work. 

HUD did not respond to a request for comment about the status of its housing grants. 

The subsidies earmarked for San Francisco are part of the budget proposal recently passed by the House of Representatives, which called for keeping government spending largely flat from the year prior. The Senate passed the stopgap measure Friday.

“These programs provide existing residents with stable housing,” said Rebecca Foster, CEO of Housing Accelerator Fund, a nonprofit that provides loans and consulting services for developers of affordable housing. “If that stability comes into question for millions of individuals, then the housing crisis exponentially balloons.”

A spokesperson for the San Francisco Housing Authority, which provides vouchers for about 13,000 units and owns public housing in Potrero Hill and Visitacion Valley, said the agency relies on HUD for 96% of its funding. 

As local agencies and nonprofits anxiously wait to learn if their grants will come through, they are tracking the cancellation of HUD contracts for affordable housing in other states as part of the Trump administration’s purge of diversity, equity, and inclusion initiatives. 

Since assuming his position last month, HUD Secretary Scott Turner has boasted about rooting out DEI from the agency and has aligned himself with Elon Musk’s Department of Government Efficiency. 

“Once again, let me be clear, DEI is dead at HUD,” Turner said Tuesday in a statement on a disaster relief plan submitted by Asheville, North Carolina, after Hurricane Helene. “We will not provide funding to any program or grantee that does not comply with President Trump’s executive orders.”

Some fear that criteria will be used as a bludgeon against San Francisco. “There’s not a single nonprofit in the city that doesn’t have something that would trigger these [DEI-motivated] cuts,” said Laura Foote, executive director at YIMBY Action. 

It’s not a misplaced fear. According to public records, HSH has operated several programs that could be categorized under the DEI umbrella, including the Trauma Informed Systems Initiative and Supporting Partnerships for Anti-Racist Communities Research.

Foote added that finding financing for new affordable housing development will only get tougher as lenders watch existing projects struggle to operate without federal aid. 

Foster notes that reducing uncertainty is key to motivating investors for affordable housing development. “The underlying programs that supported large portions of our [affordable housing] ecosystem were never in question before,” she said. “Now it seems like all bets are off.” 

If the federal government is bowing out, it is incumbent on the state government to step up and fill the void, Foster contends. In the last 10 or more years, lawmakers in Sacramento have embraced rezoning and permitting reform but have faced a steeper challenge convincing voters of the need to borrow money or raise taxes for programs.

San Franciscans, for their part, approved three housing bonds during the last decade and last year passed a $300 million spending package with a supermajority. 

However, a $20 billion affordable bond shared among the Bay Area’s nine counties fell apart before reaching voters, and a subsequent measure meant to make it easier to pass future bonds was defeated in November. 

Assemblymember Alex Lee, who represents portions of San Jose and Fremont, says the state’s fluctuating budget — going from a $100 billion surplus to a $50 billion deficit in two years — is a reason enthusiasm for housing bonds has dipped.

Now, with yet another projected surplus and a slate of new lawmakers joining both chambers, Lee hopes for renewed vigor in Sacramento on affordable housing. “I think people understand that we need to do a lot today, even if it’s a high-cost, high-stress environment,” he said. “It’s not going to get any easier if we wait.” 

This year, Lee will make his fifth attempt at creating a statewide public housing development agency, pairing it with a $950 million bond measure to finance its activities. Other bills include a $10 billion statewide affordable housing bond introduced by Assemblymember Buffy Wicks of Oakland and a welfare tax exemption by Sen. Scott Wiener for homes built for moderate-income households, up to 120% of area median income. 

“With the gutting of the federal government, it’s refocused a lot of people on making sure that California is a beacon for the world,” Wiener said. “It’s incumbent on us to show that the government can work.”