Montana faces a potential 70% reduction in federal funding for housing programs benefiting low-income residents due to recent federal policy changes. The new guidelines, issued by the U.S. Department of Housing and Urban Development (HUD), significantly cut funding for permanent housing initiatives. Housing advocates worry that many individuals might lose their homes, as funding shifts towards transitional housing and supportive services.
The Trump administration asserts that these changes in HUD’s Continuum of Care funding will “restore accountability” and “promote self-sufficiency” by reassigning most of the $3.9 billion to transitional housing. Despite discontent, Montana did not join the 20 states suing over this policy shift. David O’Leary, executive director of the Montana Continuum of Care Coalition, expressed concern that with guaranteed funding reduced from 90% to 30%, only about $2.2 million of Montana’s $7.2 million request is assured.
The coalition manages statewide housing services and the HUD grant application, supporting permanent supportive housing, rapid rehousing, and other programs. Currently, Montana allocates 76% of its Continuum of Care funding to 23 permanent housing programs, including 10 supportive housing projects assisting low-income households with disabilities. As funding caps emerge, these programs face transitioning into transitional housing models.
The board of the Montana Continuum of Care Coalition decided to maintain limited permanent housing funding for Missoula, Helena, Butte, and a new Crow Tribe project. These projects involve 146 permanent supportive housing units. Yet, to include the Crow project, funding cuts of about 3.5% were approved for each agency. This Crow Tribe project marks the first tribal initiative funded through the coalition, signaling growth despite funding challenges.
Several permanent supportive housing projects in Cascade, Gallatin, and Flathead counties must now transition to transitional housing or lose HUD funding. Heather Grenier, CEO of HRDC in Bozeman, noted that while adapting to HUD changes is feasible, the funding outcome remains uncertain. Thirteen rapid rehousing programs also face a shift to transitional housing or risk losing funding, with applications due by Dec. 15.
Montana has historically prioritized permanent housing under the “housing first” approach, but this sudden shift back to transitional housing poses risks. Housing providers fear that some may not qualify for transitional housing, potentially increasing homelessness. Gwenyth Rafuse, director of HUD programs at the Missoula Housing Authority, emphasized the difficulty faced by the chronically homeless if permanent housing options diminish.
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