Housing First helps people find permanent homes in Detroit − but HUD plans to divert funds to short-term solutions

A bureaucratic shift in Washington is threatening to undo years of progress in Detroit’s fight against homelessness, potentially forcing thousands of the city’s most fragile residents back onto the streets.

In November 2025, the U.S. Department of Housing and Urban Development revised how it would allocate funding through its flagship homelessness program, the Continuum of Care.

The change reduced the share of funding available for permanent subsidized housing and increased funding for transitional short-term housing.

HUD officials described the shift as a move away from a “housing first” model toward a “treatment first” approach that emphasizes participation in services, such as drug addiction disorder treatment, before or alongside housing placement.

The administration has argued that this promotes self-sufficiency. Critics contend that stable housing is the foundation that makes treatment and recovery possible.

The policy revision has been challenged in court by 20 states, including Michigan, as well as city and county governments and advocacy organizations. They argue it could destabilize individuals and families across the country, state and here in Detroit.

I am an urban and regional planning scholar who studies housing policy, and I serve on the research council of the National Alliance to End Homelessness.

In December 2025, I joined 77 other homelessness researchers who sent a letter to Congress analyzing the likely impacts of HUD’s revised funding approach. That analysis draws on decades of peer-reviewed research evaluating which housing interventions reduce homelessness and which do not.

That same month, a federal judge issued a preliminary injunction that temporarily pauses HUD’s efforts to shift funding away from permanent supportive housing.

HUD officials stated that the agency intends to apply the changes in future funding rounds, once the order is no longer in effect.

Homelessness in Detroit

Detroit’s homelessness crisis is both long-standing and worsening.

The number of people who experience homelessness in Detroit, Hamtramck and Highland Park increased by about 16% from 2023 to 2024, with roughly 1,725 people experiencing homelessness on a single January night, including hundreds of families. Children in particular have been hit hard by this crisis. One data snapshot shows 2,579 children reported being doubled up, staying in a shelter, staying in a hotel or motel or being unsheltered. This was a record number for the Detroit Public Schools Community District.

While permanent supportive housing has strong outcomes for those who receive it, overall homelessness has continued to increase due to rising rents, economic instability and the limited housing supply, which has historically outpaced the number of available supportive units.

Detroit’s homelessness response system is coordinated through the federally funded local Continuum of Care led by the Homeless Action Network of Detroit.

In recent years, Detroit has taken steps to strengthen coordination, expand shelter capacity and increase housing placements. But the system heavily depends on federal funding to provide permanent supportive housing.

What could change in federal homelessness funding

The Continuum of Care program began in 1994 and was later codified in 2009 by the Homeless Emergency Assistance and Rapid Transition to Housing Act. It is the largest federal funding stream dedicated to addressing homelessness in the United States.

Last year alone, Detroit received US$40 million from the HUD program.

Those funds pay for emergency shelters, transitional housing and rapid rehousing programs – which provide temporary rental assistance and the assistance of a social worker, without preconditions – and permanent supportive housing.

Like other cities nationwide, Detroit has built its homelessness response system around HUD’s funding priorities.

For more than a decade, HUD has emphasized permanent housing. A strong body of evidence shows that stable housing leads to better long-term outcomes than temporary programs.

Prior Continuum of Care funding cycles allocated roughly 85% to 90% of funds to permanent housing, according to the National Alliance to End Homelessness.

The revised funding priorities announced in late 2025 would substantially reduce that share and redirect funding toward transitional housing and short-term interventions.

According to the Homeless Action Network of Detroit, this means that Detroit area providers could go from about $34 million per year allocated for permanent supportive housing under the current allocation to no more than about $11 million under the new priorities.

Local advocates warn that capping permanent housing at roughly 30% of Continuum of Care dollars would drastically reduce the number of supportive units available and place hundreds of households at risk of returning to homelessness.

Why permanent supportive housing matters

Permanent supportive housing is one of the most rigorously studied homelessness interventions in the United States.

It is an evidence-based intervention that provides long-term rental assistance paired with voluntary supportive services for people who have experienced chronic, or repeated, homelessness, particularly those with disabilities or chronic health conditions.

Under the current Continuum of Care framework, households typically pay no more than 30% of their income toward rent, with the subsidy covering the remainder. Assistance can continue as long as eligibility criteria are met.

Programs also offer staff to help with coordination of health care and behavioral health services and assistance identifying and applying for relevant benefits to promote long-term housing stability. Tenants hold standard leases and have the same legal protections as other renters.

Research shows that permanent supportive housing using a housing-first approach consistently reduces homelessness and improves health outcomes for people with disabilities.

Greater investment in permanent supportive housing is also linked to reductions in chronic homelessness, meaning individuals or families who have been homeless for long periods or repeatedly over time.

A long-term study published in Social Service Review in 2014 found that communities that increased permanent supportive housing capacity experienced measurable declines in chronic homelessness over time.

Local data from the Detroit Continuum of Care indicate that at least 160 new permanent supportive housing units have been made available in the past year, and another 235 units are projected for 2026. These units help people exit homelessness and maintain stable homes amid rising rents and affordability challenges.

How transitional housing compares

Transitional housing typically requires residents to participate in supportive services or programming as a condition of stay. This can include regular meetings with a social worker, employment readiness classes, substance use treatment or financial literacy workshops, for example.

The model is often used for survivors of domestic violence or young adults aging out of foster care. While transitional housing can provide short-term stability and support during these transitions, it differs from permanent supportive housing in that it is time-limited and may require program compliance as a condition of continued residency. Transitional housing placements typically last from about six months up to two years.

However, research consistently finds that transitional housing is less likely than permanent housing to produce long-term housing stability. This is particularly the case for families and people with disabilities.

HUD’s Family Options Study in 2016 found that families offered permanent housing experienced significantly better long-term housing stability than those offered transitional housing, despite transitional housing costing more per household.

Follow-up research conducted by the Urban Institute, a nonprofit organization that studies economic policy, similarly found that many families who leave transitional housing once their time limit expires struggle to maintain stable housing. These findings are especially relevant for individuals with disabilities, chronic illnesses or mental health conditions, all groups that are typically prioritized for permanent supportive housing.

Why Detroit is especially vulnerable

Research shows that housing instability increases reliance on emergency services such as shelters, hospitals and public safety systems. This drives up taxpayer costs and additionally strains already overextended local services.

Detroit area homelessness service providers are pushing back against the potential federal changes, which they identify as “radical.”

In response, many organizations are turning to state and philanthropic partners for support while continuing to develop housing locally to help offset possible reductions in federal funding.