Experts tell Sacramento leaders federal, state funding shifts could shrink housing subsidies in 2026
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Summary
A national homelessness policy expert warned elected leaders that proposed federal and state changes risk reducing Emergency Housing Voucher availability and could impose caps on how much continuum‑of‑care awards may be spent on permanent housing — a change that would threaten existing subsidies and cost local housing stability.
The National Alliance to End Homelessness told Sacramento elected leaders that the national funding landscape for homelessness and housing assistance is fragile and could worsen in 2026 if proposed federal and administrative changes proceed.
Alex Vasotsky described the structural problem: housing assistance is not an entitlement in the United States and demand far outstrips available subsidy slots. He highlighted that only a small fraction of households that are eligible for federal rental assistance actually receive it; in some subgroups the gap is severe. Vasotsky said three federal and administrative developments bear watching:
• Emergency Housing Vouchers (EHV): the EHV program supplied additional vouchers for people exiting homelessness after COVID, but the program’s funding can be exhausted quickly as rents rise and the early allocations were not designed for indefinite duration. Vasotsky warned that EHVs in California could run out in 2026 unless Congress provides further support.
• Continuum of Care (COC) funding notice: media reports suggested a proposed HUD notice might limit what fraction of an award a COC can spend on permanent housing to as little as 30 percent, which would effectively strip subsidies from occupied permanent supportive housing units in some communities if enacted as reported.
• White House policy direction and budget proposals: the administration’s policy emphasis on treatment and operational changes, paired with a proposed budget that recommended deep cuts to some housing programs, could materially alter eligibility and access; Congress had not finalized the appropriations at the time of the briefing.
Why it matters: local electeds and staff heard that governance and joint advocacy could matter: a coordinated regional voice can press state and federal decision‑makers to preserve locally critical subsidy streams and to avoid administrative changes that would destabilize existing housing. Vasotsky urged local leaders to plan for scenarios where some federal sources shrink and to protect the most vulnerable residents.