In 1983, a homeless woman with schizophrenia named Ruth Goebel died in a Denver alleyway. Shortly before her death, she had been discharged from a local mental health clinic.
Goebel was a plaintiff in an ongoing class action lawsuit filed in 1981 by the Legal Aid Society of Denver on behalf of chronically mentally ill people in the city who claimed local mental health facilities did not provide adequate care. The case was finally settled in 1994.
During that time, a new homeless service organization was created to address the gaps in care for Denver’s chronically mentally ill. The Colorado Coalition for the Homeless (CCH) was established in 1984 to provide housing, health care, and supportive services to people experiencing homelessness. In 1988, CCH opened a 12-room transitional housing building. CCH named the property the Ruth Goebel House to commemorate Goebel’s legacy. (The building has since been renamed “Beacon Place.”)
For the last several years, the Department of Housing and Urban Development (HUD) has granted CCH about $100,000 annually to operate Beacon Place. In turn, the house has provided care for women and gender minority people who have few other options in the city.
Beacon Place represents a small fraction of the $3.6 billion HUD allocated in Fiscal Year 2024 through the Continuum of Care Grant program. The funding for its specialized services—and those of other Continuum of Care Grant recipients—could be at risk if President Donald Trump’s proposed Fiscal Year 2026 budget is passed, though CCH staff told Shelterforce that they’re still not sure what the effects would be.
The president’s budget seeks to combine homeless services funding streams—the Continuum of Care and Housing Opportunities for Persons With AIDS (HOPWA) grant programs—with the Emergency Solutions Grant (ESG) program. The purpose of this move is to “[deliver] on the President’s pledge to eliminate street homelessness by quickly connecting homeless individuals to shelter,” according to the budget request. The White House did not respond to a request for comment from Shelterforce before publication.
However, experts like Jason Johnson, executive director of the Metro Denver Homeless Initiative (MDHI), say the move would effectively eliminate specialized care for people who are homeless. People with HIV/AIDS, chronic illnesses, and other ailments could be housed together in congregate shelters under Trump’s proposal. On top of that, Johnson said, the administration’s emphasis on getting homeless people back to work would leave the most vulnerable homeless populations behind.
“It would force a return to expensive, fragmented, emergency-only responses that would no longer have a level of coordination, service access, and housing access inside of the system,” Johnson told Shelterforce.
Ann Oliva, CEO of the National Alliance to End Homelessness, estimates that more than 275,000 people would lose their homes if the president’s overall budget proposal is passed unamended, including the changes to homelessness services. That includes 167,000 permanent supportive housing beds and 46,000 beds for people with HIV/AIDS. At the same time, 150 communities would lose technical assistance and funding for data collection and coordinated entry services would be zeroed out.
What do the grant programs do?
Most people outside of the homeless services sector have probably never heard of Continuum of Care, HOPWA, or the Emergency Solutions Grants program. But their effects on local communities are considerable.
The programs funded by Continuum of Care (CoC) grants are coordinated by local entities that effectively work as a support system for governments, nonprofits, and philanthropies. The programs help connect people with housing and supportive services, and collect data about homelessness in general.
CoC grants support the construction of permanent supportive housing units. They also fund homelessness prevention programs like temporary rental assistance, supportive services, transitional housing, coordinated entry services, and housing relocation and stabilization services. They fund improvements to the Homelessness Management Information System (HMIS), used to manage caseloads, evaluate programs, and collect demographic data about the people who avail themselves of local homeless services.
CoC funding is the single largest federal funding stream for local homeless service providers, and is allocated through a competitive grant process. Contrary to popular belief, CoC funding does not only help Democrat-controlled states like California. Some republican states, such as Florida ($110 million in FY 2024), Texas ($198 million), and Ohio ($178 million), also receive a substantial amount of CoC funding for homeless services.
HOPWA helps low-income individuals with HIV/AIDS and their families access housing and services. The grants support projects that use Housing First principles, recognize that housing is a key strategy to addressing the HIV/AIDS epidemic, and improve data collection concerning stable housing, health, and equity. In 2024, HUD allocated $455 million in HOPWA grants to 130 grantees.
Emergency Solutions Grants (ESG) are a broad funding mechanism for state and local governments and nonprofits to address unsheltered homelessness. ESG funds can be used for the following: street outreach, emergency shelter, homelessness prevention services, rapid rehousing, HMIS upgrades, and administrative costs.
Every year, the ESG program funds more than 350,000 people to access shelter beds.
Trump’s proposal would combine these programs into a single block grant, allocated to the states through a formula set by the HUD Secretary.
The move could shed more than $532 million in funding for these programs, or roughly 12 percent of the money allocated by Congress last year. This is happening at a bad time: Unsheltered homelessness increased by 21 percent between 2020 and 2024, with a record-high number of people sleeping outside as of 2024.
It would also place a two-year cap on assistance for people housed by the block grant, which would be “horrifying,” according to experts like Katie Cahill-Holloway, interim director of supportive housing for the city of Boston.
“It would put a crater in our homeless response system that is hard to imagine,” Cahill-Holloway tells Shelterforce.
Even though Trump’s proposed combination of the grant programs is being billed as a way to address unsheltered homelessness, experts say the move could make it more difficult to identify people who are homeless and connect them with services, and to prevent future cases of homelessness.
“This proposal does not help people exit homelessness,” said Renee Willis, CEO of the National Low Income Housing Coalition, at a press conference on June 4. “It supports the extension of their homelessness.”
“A dangerous system”
Each of the grant programs targeted by Trump’s 2026 budget helps people connect with homeless services and get into housing. But they do it in very different ways, and the potential combining of the grants could create “a dangerous system,” according to Johnson.
At a broad level, Johnson says, combining the three grants would effectively invalidate the local Continuum of Care system itself because ESG grants are awarded to governments while CoC and HOPWA funding can go to governments or nonprofits. And no coordinating bodies would exist to carry out federal strategies to address homelessness, since the Trump administration issued an executive order to eliminate the U.S. Interagency Council on Homelessness in March.
The proposed funding cuts would also impact the progress made to improve the Homeless Management Information System (HMIS) and coordinated entry services. HMIS not only tracks which services an individual engages with but also records data about the outcomes and challenges they face while navigating the homeless services system. Eliminating funding for this program would make it much more difficult for service providers to fix issues within the service pipeline.
Johnson says the Metro Denver Homeless Initiative has improved its HMIS to include data from both the Point in Time Count and the McKinney-Vento survey. This gives MDHI a more holistic view of the number of people experiencing homelessness, the services they access, and the hurdles they encounter as they progress through the system. This data helps MDHI improve its coordinated entry system so that people are more efficiently connected with the appropriate services, Johnson says.
[RELATED ARTICLE: HUD Funding Uncertainty Is Already Changing These People’s Lives]
As for the goal of reducing unsheltered homelessness, Johnson says Trump’s proposal is unlikely to achieve that end. The Trump administration is also pursuing deep cuts to Medicaid, which many people experiencing homelessness rely on to get health care, and adding work requirements to other social safety net programs. Johnson says the combination of these efforts will likely cause increases in homelessness because there will be less help available for those who need it.
“I do not think these proposals are going to benefit anyone, whether they are experiencing homelessness now or living on the fringe,” Johnson says. “Due to various cuts and reductions at the federal level, we will likely see a pretty dramatic uptick in homelessness if they are approved.”
Effect on local communities
Combining the CoC, HOPWA, and ESG programs would not only create worse outcomes for the unhoused, it would also disrupt the efforts of communities to address homelessness.
Ann Oliva, at the National Alliance to End Homelessness, says it would take years to recover from the ill effects of losing these programs.
In Colorado, four Continuums of Care used improved HMIS data collection to release the state’s first statewide assessment of homelessness. The report, issued in April 2025, not only measured the scale of homelessness, but it also identified some root causes of homelessness, like the connection between housing and health care and the impact of Colorado’s increasingly unaffordable housing market. Johnson said reports like this one would not have been possible without CoC funding.
[RELATED ARTICLE: A Place to Recover from Illness: How Medical Respite Programs Help Unhoused People Heal]
Atlanta’s Continuum of Care, made up of 170 nonprofit, government, and other partners, has used CoC funds to launch two initiatives to address unsheltered homelessness. One initiative, called LIFT 2.0, housed 1,553 people over two years, with about 60 percent of those people moving from the streets to permanent housing, according to the National Alliance to End Homelessness. The Bridge Initiative housed 250 people from 36 encampments across the city in 2024. The president’s budget could force these programs to scale down or end if it passes.
Boston received over $47 million in CoC funding in 2024, which it used to support 40 nonprofit partners, Cahill-Holloway said. One of those partners is the Boston Health Care for the Homeless Program, an organization that provides health care services to 10,000 people every year. This program could also have to scale down if Trump’s plan to combine CoC and ESG funding is enacted.
“We really don’t have those alternatives available to us with the scenario that’s been laid out,” Cahill-Holloway said.
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Sometimes you need to leave things as they are. If you cut HUD and HMIS funding. You are not only hurting homeless people but all the people who are trying to help so in the end those people could become homeless so what have you accomplished.