A homeless man sits in his tent in Washington, D.C., this summer. New rules from the U.S. Department of Housing and Urban Development will sharply restrict how $3 billion in homelessness aid will be spent, allowing no more than 30% of federal grants to be used for permanent housing. (Photo by Anna Moneymaker/Getty Images)

As the housing shortage pushes more Americans into homelessness for the first time, the Trump administration wants to focus federal housing aid on mental health treatment and enforcement against street homelessness, rather than on finding people permanent homes as quickly as possible.

The administration’s new plan to tie federal housing aid to work requirements and drug treatment could be a boon to states such as Alabama, Florida and Wyoming that already are pursuing that strategy. But for many other states — and nonprofit providers across the country — the rules represent a sudden pivot from past expectations. In California, the new federal funding priorities face a direct conflict with state law.

Under new rules announced last month, the U.S. Department of Housing and Urban Development will place new restrictions on $3 billion in homelessness aid, allowing no more than 30% of federal grants to be used for permanent housing. That approach, known as Housing First, prioritizes getting people into safe, stable housing ahead of other treatment and enforcement, and had been a key focus for the federal government’s Continuum of Care Program for homelessness.

Now, HUD’s new rules — a shift to Treatment First policies — could result in a major reprioritization of who gets funding and for what purpose. Backlash from many nonprofits and homelessness service providers across the country has been swift, and 20 states and Washington, D.C., have filed suit to stop the rules, arguing they violate federal law. Several cities and counties across the country also have joined a lawsuit against the department.

While service providers point to success stories from permanent supportive housing, the Trump administration points to rising homelessness — and a perception of violent crime — as a reason to shift funding away from the long-standing approach.

But Martha Are, CEO of the Homeless Services Network of Central Florida, said the Trump administration is putting the onus on  nonprofits and service providers to fix a homelessness crisis that is propelled by a lack of housing that people can afford.

“If homelessness numbers go up, some assume the homeless-response system doesn’t work. But the real driver is the housing market, not the interventions,” Are said. “HUD is penalizing communities for following the rules they set in previous years. I’ve never seen them say, ‘You complied with our guidance, and now you lose points for it.’”

Easy transition for some states

An analysis of publicly available federal data by the National Alliance to End Homelessness found that 88% of federal Continuum of Care dollars flow to permanent supportive housing and rapid rehousing, the models with the strongest evidence of reducing chronic homelessness. The new HUD rules would force cuts large enough to cause roughly 170,000 people to lose that housing, according to the advocacy group’s projections.

But a handful of Continuum of Care programs already devote far less to permanent housing. According to the National Alliance to End Homelessness, that includes that includes certain county or state programs in Alabama, Arkansas, Florida, Georgia, Tennessee, West Virginia and Wyoming.

These programs operate closer to HUD’s new funding requirements and are unlikely to face major disruption. Some even may become more competitive for federal funding, especially in states where policymakers have already adopted enforcement-heavy approaches to homelessness.

Such states — including Florida, Georgia, Missouri, Tennessee and Texas — may be better positioned under HUD’s new grant-funding criteria, which prioritize jurisdictions that criminalize public camping, expand law enforcement involvement or restrict low-barrier shelters, which may have more flexible policies than traditional shelters.

Since the U.S. Supreme Court’s City of Grants Pass v. Johnson ruling in June 2024 allowing localities to ban outdoor camping even if there is no homeless shelter space available, roughly 150 cities in 32 states have passed or strengthened such ordinances.

The annual point-in-time count of people sleeping outside reported that homelessness reached an all-time high in 2024, the most recent data available from HUD. The count, taken during the last 10 days of January 2024, found that 771,480 people were experiencing homelessness, an 18% increase over the previous year and the largest one-year jump in the history of the count.

HUD told Stateline the administration is shifting its approach to emphasize “long-term self-sufficiency and recovery” rather than the number of housing units funded or filled.

The agency rejected advocates’ claims that the new rules will increase homelessness, arguing instead that “failed” Housing First policies have contributed to rising numbers. HUD said it hopes communities will convert many permanent supportive housing programs into transitional housing with stronger requirements around addiction and mental-health services.

Skepticism about Housing First

The impact of these cuts won’t be evenly distributed.

Some areas with the deepest investments in the Housing First approach — including Cleveland, Ohio; Los Angeles; and New York City — stand to lose thousands of units that currently serve older adults, those leaving domestic violence situations, people with disabilities, veterans and families.

Those in favor of HUD’s funding shift argue that long-standing as it may be, Housing First has failed to reduce homelessness.

HUD’s annual counts show national homelessness rising for most of the past decade, and the nonpartisan Congressional Research Service notes that while Housing First stabilizes individuals, it has not reduced the number of people experiencing homelessness.

A 2021 Harvard University study found that while most people in permanent supportive housing remained housed in the first year, retention dropped sharply over time — with only about 12% still housed after 10 years.

Conservative think tanks such as the Cicero Institute, American Enterprise Institute and the Manhattan Institute suggest that Housing First undervalues mental health and substance use treatment. They point to Oregon’s homelessness struggles after drug decriminalization as evidence that voluntary services alone cannot stabilize the most vulnerable residents.

They further argue that permanent housing grants crowd out shelter, detox and transitional programs, and that many nonprofits defending the model are financially invested in maintaining the status quo.

At a moment when tight housing markets are pushing record numbers of people into first-time homelessness, local providers, who stand to lose grants, warn that HUD’s policy reversal will function more like a mass eviction than a funding shift — sending tens of thousands of people back into shelters, onto waiting lists, or directly onto the streets.

Losing trust in the system

In Orlando, Florida, many residents are experiencing homelessness for the first time. Shelters are full and a recent law in Florida allows police to arrest people for sleeping outdoors.

Are, of the Homeless Services Network of Central Florida, said the proposed HUD changes would eliminate more than 500 permanent housing subsidies that her organization offers in the Orlando area alone.

For providers, these subsidies cover the rent for units where people already live. If HUD defunds them, tenants would lose support, landlords would stop receiving payments and people would be evicted unless local governments backfill the funds, she said. And most local governments can’t afford to, she added.

Central Florida has built a system that uses data to focus on high-need individuals and keep them housed — in long-term rental units paired with voluntary support services — at a lower cost than mandated hospitalizations or treatment, Are said. HUD’s abrupt policy reversal would unravel years of progress and leave communities with “no place to put people.”

“Our permanent supportive housing costs about one-twentieth of what inpatient institutional programs cost in this region, and the outcomes are far better,” she said.

Nashville, Tennessee, had expected stable homelessness funding until HUD overhauled the rules “out of [the] blue” and at a time when it would be hard for providers to plan for sudden changes, said Wally Dietz, legal director for the Metropolitan Government of Nashville and Davidson County.

When Congress approved a two-year cycle for fiscal years 2024 and 2025, localities were told they wouldn’t have to reapply for money, he said. That changed this fall.

“Nashville was given 60 days, spanning Thanksgiving and Christmas, to rewrite and resubmit its entire homelessness funding application, which is something the city typically prepares for a full year,” Dietz said.

If the changes to Nashville’s funding go through, not only will people lose their housing, he said, but a 20-year infrastructure will crumble and the164 landlords who partnered with the city will lose faith once rent aid stops flowing.

“Once evicted, people will not reengage with the system, and trust will be impossible to rebuild,” Dietz said.

Nashville is among a handful of localities, including Boston, San Francisco and Tucson, Arizona, that filed a joint lawsuit Monday to block the rule changes, accusing HUD of bypassing Congress. The suit, whose plaintiffs also include the National Alliance to End Homelessness and the National Low Income Housing Coalition, was filed in U.S. District Court in Rhode Island.

“If the administration wants to overhaul homelessness policy, it has to go through Congress,” Dietz said. “That gives cities time to prepare, to testify, to budget. But we didn’t get that chance.”

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org.

Students arrive for the first day of school at a Minnesota elementary school. Four-day school weeks are gaining in popularity, especially in rural districts. But researchers say the evidence on four-day weeks is unclear. (Photo by Stephen Maturen/Getty Images)

Northeast of the capital city of Des Moines in central Iowa, the 400-student Collins-Maxwell Community School District is one of many across the state shifting to a four-day school week.

Like many rural K-12 schools, the district has struggled to find teachers, and it sees the four-day week as a useful recruiting tool. It also wants to curb student absences, which tend to spike on Mondays and Fridays.

The district maintained its traditional five-day calendar in August and September. But from now on, with scattered exceptions, the middle school and high school in the Collins-Maxwell district will be closed on Mondays. To meet Iowa’s minimum number of instructional hours, the district will lengthen the other days during four-day weeks.

Superintendent Marc Snavely said he watched nearby schools transition to shorter weeks and was intrigued by the reports he got from his counterparts in other districts. Snavely hopes the shorter week will boost teacher morale, reduce burnout, and make the rural district more competitive with nearby districts that are larger and can offer teachers better pay.

“Ultimately, the ‘why’ behind the four-day school week came down to staff recruitment and retention,” Snavely said in an interview. “We felt being a small school district, the four-day week would allow us to better compete.”

He added that surrounding schools with four-day weeks said they experienced fewer discipline problems and improved attendance. And rural school districts across the country tout the four-day work week as a way to stretch tight school budgets amid K-12 funding uncertainties at the federal and state levels.

But despite the reports of higher attendance and calmer classrooms, education researchers say the evidence tells a more complicated story.

Emily Morton, lead researcher for the Northwest Evaluation Association, which creates standardized testing for K-12 schools, cautioned that the promised benefits have not shown up in the data. Moreover, longer school days can harm academic performance, Morton said.

But such concerns might not matter as four-day school weeks become more popular nationwide.

“One thing that does show up clearly is that there is an extremely high approval rating for these policies,” Morton said. “Parents and students overwhelmingly want to stay on a four-day week once they have it.”

A rural trend

There are more than 2,100 schools in 26 states using four-day weeks, according to researchers at Oregon State University. In Iowa, the number of districts on a four-day schedule has grown from six in 2023-24 to more than two dozen in 2025. In Colorado, two-thirds of districts are on the altered schedule.

But so far, it’s almost entirely a rural phenomenon.

“To my knowledge, there’s not a single urban district using a four-day week,” Morton said. “What a four-day week looks like in a rural community is very different from what people in suburban or urban areas imagine.”

Dr. Shanon Taylor, an education professor at the University of Nevada, Reno who studies school scheduling, said districts typically adopt the model for economic and staffing reasons, not academic ones. Rural districts often save money on transportation, utilities and building operations, she said, and the promise of permanent three-day weekends helps recruitment efforts.

However, the burden of accommodating this transition may fall heavily on parents who work five days a week, and especially on the parents of younger students who must find a child care alternative on the selected day off.

“The research is still mixed,” Taylor said. “We don’t yet have decisive evidence showing academic benefits or drawbacks.”

In June, researchers at the University of Oregon published a review of 11 studies on four-day school weeks, which included data on academic achievement, attendance, discipline and criminal activity. The impact of a four-day week varied based on grade level and on location, the Oregon researchers found, but overall “there was no evidence of large positive effects.”

They also noted that “maintaining activities that foster healthy youth development on the fifth day is important for minimizing other negative impacts.”

State vs. local clashes

In some states, the policy has sparked conflict between state and local officials.

“There’s a lot of tension between state leaders and rural districts over whether the four-day week is something the state should allow,” said Morton. “In Oklahoma, when the state tried to take it away, districts simply shifted to ‘virtual Fridays’ — and instruction mostly didn’t happen.”

The Oklahoma Council of Public Affairs, a conservative think tank, found through a public records request that more than 100 Oklahoma districts had at least one school where students had at least two full weeks’ worth of “virtual days” in the 2022-23 school year. More than 60 districts had at least one school that went online for three weeks or more. During many of those days, there was minimal live instruction.

In response, Oklahoma this year enacted a law that restricts public schools’ ability to shift to virtual learning. The measure limits districts to two days of virtual instruction each school year, and only allows them under certain circumstances, such as a state of emergency declared by the governor.

Missouri enacted a law in 2024 requiring that certain big city, charter and county districts obtain voter approval before adopting or continuing a four-day week. The Independence School District, a 14,000-student suburban system on the edge of Kansas City that switched to the shorter week in 2023-24, has since sued the state, alleging the law unconstitutionally targets certain districts based on arbitrary criteria such as county size.

Last year, a New Mexico mandate for districts to adopt calendars with more school days was halted in court. And Arkansas legislators considered a bill that would allow for range of instructional times from 160 to 190 days, which would be contingent on a school’s rating. A large number of rural districts there have moved to four-day schedules.

Meanwhile, uncertainty over the costs and benefits of the approach are likely to persist.

Morton, the education assessment researcher, said that small rural districts might not be equipped to determine whether a four-day week produces benefits until further studies are conducted across the country.

“Even if your test scores stay flat, nearby districts might be rising, so your ‘flat’ could actually be a negative effect,” she said. “States need to equip districts with what national research shows, because local data will never be able to answer these questions alone.”

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org.

A pedestrian lifts his bike over snow piles after a storm in Buffalo, New York. Buffalo is among the older industrial cities where residential properties have drawn interest from corporate investors. (Photo by John Normile/Getty Images)

As corporate ownership of residential property across the country rises nationwide, researchers from the Lincoln Institute of Land Policy and the Center for Geospatial Solutions, which is housed at the institute, warn this rising trend has complicated the housing market for first-time buyers.

According to a joint “Who Owns America” report, nearly 9% of residential parcels in 500 U.S. counties are owned by a corporation. The concentrations exceed 20% in some cities, including St. Louis, Missouri; Harrisonburg, Virginia; and Franklin, Ohio. 

Researchers told Stateline they define “corporate ownership” as any rental property held under a formal business entity, whether a single-property LLC or large institutional investors such as Blackstone. They also track three factors: whether the owner is a business entity, whether it is based in- or out-of-state, and the size of its housing portfolio.

Roughly 2% of residential lots are owned by out-of-state investors. Investors have shifted their capital to older industrial metros such as St. Louis, along with Buffalo, New York, and Akron and Toledo in Ohio, where rents are rising and vacancy rates are extremely tight.

Although corporate owners currently hold a modest share of all residential parcels nationwide, their footprint is expanding steadily, said Reina Chano Murray, associate director at the Center for Geospatial Solutions.

“Corporate ownership may look small on paper, around nearly 9% across the counties we studied, but that share is steadily increasing,” said Chano Murray. “Even if corporate owners don’t make up a huge percentage right now, the trend line is clear. They’re growing.”

This past year, states took a major step in attempting to use legislation to rein in corporate ownership of rental homes. According to an August report by the conservative think tank American Enterprise Institute, lawmakers in 22 states have introduced such legislation in 2025, including in California, New York and Texas. Cities in Indiana have capped the percentage of single family homes that can be rented in a neighborhood. 

AEI, however, believes the issue of corporate land ownership is a “narrative [that] is not supported by empirical evidence,” highlighting that less than 1% of institutional investorship is in residential property, according to its report. 

Earlier this year, New York Gov. Kathy Hochul, a Democrat, proposed a 75-day moratorium on institutional or corporate investors buying single- and two-family homes to disincentivize those groups from buying up housing stock at the cost of individual buyers.

Washington state lawmakers have floated caps on how many units a single investor may own. In 2024, Colorado enacted a law that gave cities a right of first refusal on some multifamily property sales. Locally, some redevelopment authorities in Cincinnati and Minneapolis are using their own capital to compete, by directly acquiring and preserving single-family homes for low- and moderate-income buyers.

The impact of corporate residential ownership, researchers at the Lincoln Institute say, is most severe for first-time buyers, who are increasingly outbid by cash offers from well-endowed investors. 

“For first-time homebuyers, it’s a double whammy. Units are being removed from the marketplace, and investor competition is driving up prices,” said George McCarthy, president and CEO of the Lincoln Institute. “Cash-only transactions make up nearly a third of single-family sales this year, and those aren’t families with briefcases full of cash.”

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org.