Permanent Supportive Housing Works--And Federal Funding Must Protect It

December saw the Continuum of Care (CoC) program pop up in the news, prompted by substantial changes the U.S. Department of Housing and Urban Development (HUD) announced—and has since rescinded due to a multistate lawsuit—that could cripple the country’s homelessness response system and send tens of thousands of Americans back to the streets.

The CoC program is administered regionally and is multifaceted, but at its essence it does two things: it provides federal funding to nonprofits and state and local governments to operate programs that reduce homelessness, and it tracks the progress of that funding.

The latter is performed every winter during the annual HUD-mandated Point-in-Time (PIT) Count (Project HOME performs three additional quarterly counts in Philadelphia beyond the winter PIT Count), and no changes are expected. However, HUD proposed major changes to the funding formula that could result in a drastic reduction in funding for permanent supportive housing. Such changes could force organizations to scramble for alternative resources simply to keep current residents housed—diverting valuable time and funding that could otherwise be used to expand services to more people.

The Philadelphia CoC alone could lose up to $47 million in federal funding—an amount that, in human terms, represents homes for thousands of people who have successfully exited chronic street homelessness. The CoC program is designed to operate at the community level. A CoC can encompass a large city, a suburban county, or a rural region, with federal allocations filtered through a designated organization in each area. In Philadelphia, that organization is the Office of Homeless Services (OHS), and local nonprofits apply to OHS for a portion of those funds.

There are more than 5,000 permanent supportive housing beds in Philadelphia (using OHS terminology, which counts beds rather than units that may house multiple people), all funded through the CoC. Project HOME alone operates nearly 300 units of permanent supportive housing, and a significant portion of the federal funding that sustains those homes could be redirected toward transitional housing under the proposed changes.

The transitional housing model—also funded by HUD through the CoC—limits residents to a maximum two-year stay before they are expected to move on to unsupported, market-rate housing. While transitional housing can be effective for people who need temporary stability, it is not an appropriate solution for individuals with a history of chronic street homelessness, particularly those who are older or living with disabilities, mental health conditions, or substance use disorders.

Thankfully, we know what works: permanent supportive housing. As Christina Fidanza, Senior Vice President of Supportive Housing Operations at Project HOME, explains, “We see every day how permanent supportive housing changes lives. When people have stable housing and consistent support, they are able to focus on their health, rebuild trust, and maintain housing long term to move forward with their lives.”

That stability is not only transformative for residents—it is essential for communities. “This funding allows our residents to stay housed, protects affordable housing, and gives communities a compassionate and effective way to address homelessness,” Fidanza adds.

Yet the changes HUD initially proposed would have imposed harmful preconditions on access to permanent supportive housing. Currently, individuals must be experiencing homelessness and have a disability, defined broadly, to qualify under CoC guidelines. HUD sought to narrow that definition to include only physical disabilities, excluding mental health conditions and substance use disorders.

Had those changes taken effect, people experiencing street homelessness while living with mental illness or substance use disorders, but without a qualifying physical disability this could have been denied access to supportive housing altogether. Instead, they would likely be placed in temporary or unsupported housing, only to return to the streets once that assistance ended.

If implemented, these changes would undermine a system specifically designed to break the cycle of homelessness. Rather than promoting long-term stability, they risk perpetuating homelessness by stripping access to the very housing model proven to work.