Many Kentuckians at risk of returning to homelessness because of federal funding switch

An abrupt shift in the way the federal government allocates funds to help the homeless has shocked groups that provide housing aid throughout Kentucky, a change advocates say could put many low-income, mostly disabled Kentuckians back on the streets.

“We are looking at a severe cut to our existing programming,” said Adrienne Bush, executive director of the Homeless and Housing Coalition of Kentucky, which helps provide homes for about 60 households. “There are folks who without this program would be homeless. They most likely will be homeless again without rent support and case management.”

Overall, the changes announced Nov. 13 by the U.S. Department for Housing and Urban Development (HUD) could put more than 2,000 Kentucky households at risk of becoming homeless again, according to an analysis by the Corporation for Supportive Housing, which is working with providers.

In Louisville, the changes could cause more than half the 1,900 people in what’s called “permanent supportive housing” to lose housing, according to the Louisville Coalition for the Homeless.

“This puts everything at risk,” said Katharine Dobbins, CEO of Wellspring, a Louisville nonprofit that specializes in finding homes for and supporting people with severe mental illness. “Many people we serve come from chronic homelessness. There’s a reason people are chronically homeless. They usually are pretty disabled.”

At stake is much of about $48 million that flows to Kentucky each year in HUD money, with the largest portion, $23 million, going to Louisville. Most of it is used  for permanent, supportive housing to help people find and stay in homes with services including counseling, mental health and addiction treatment, financial education and other help.

For more than a decade, HUD has prioritized such spending as the best way to combat homelessness, with about 90% going to permanent housing. But the new federal rules announced Nov. 13 cut to about 30% what states can spend on permanent housing.

‘Biden-era slush fund’

This month, the federal government announced a major shift in how it allocates funds, stressing that the majority of money now must go to short-term, “transitional” housing aimed at getting people into jobs and in charge of their own housing.

Generally, transitional housing is covered for about 24 months.

In a news release, HUD announced the new funding priorities as “monumental reforms” aimed at ending the “Biden-era slush fund.”

“We are stopping the Biden-era slush fund that fueled the homelessness crisis, shut out faith-based providers simply because of their values and incentivized never-ending government dependency,” HUD Secretary Scott Turner said in the news release. The new plan, Turner said, will carry out President Donald Trump’s mandate to “make our cities and towns beautiful and safe.”