Housing advocates, providers see impending federal funding cuts as 'catastrophic'

Yahoo

04-03-2025

(Photo: Clayton Henkel)
Nonprofit housing and community development organizations face potential catastrophic funding disruptions due to the Trump administration's efforts to reshape the federal government, a coalition of North Carolina nonprofit leaders and supporters said over two recent Zoom meetings.
The first weeks of Donald Trump's second presidency have been fraught with uncertainty for the nonprofits. A flurry of executive orders, mass firings and funding freezes could have a devastating impact on housing and community development in North Carolina, coalition leaders said during the meetings, which took place Friday and Monday.
Samuel Gunter, executive director of the North Carolina Housing Coalition, the affordable housing advocacy group that organized the meetings, said that until recently, he's never had to call an emergency meeting of his board of directors. He's worked at the organization for 10 years.
'In the last week I've had three [meetings with the board of directors], and most of the folks that I've been talking to over the last couple of weeks, that is the case as well' Gunter said.
Housing and community nonprofit leaders are struggling to figure out what they have in the bank, what's supposed to be there that isn't, what federal dollars they were relying on that may not exist a couple of weeks from now, and what it all means for staff and programs, Gunter said.
'I wish I had solid answers for you,' Gunter told the more than 100 people who attended Friday's virtual meeting. 'I do not right now, but I need us to know that we are all in the same boat. The more we can communicate with one another, the more that we're going to be able to chart a course through this.'
Gunter said nonprofits housing and community development organizations must stick together and direct their energy at 'the folks that are shrinking the pie,' rather than engaging in destructive competition over the depleted resources that remain. 'We are not each other's enemies fighting over fewer and fewer resources,' he said.
Friday's Zoom meeting was attended by 79 organizations from more than 50 the counties. The attendees reported serving more than 96,000 families and receiving more than $165 million in public funding. They also reported being owed $7 million in funding as of Friday.
On Monday, 207 organizations from more than 80 counties were represented on the call, the organizers said. The organizations reported serving more than 80,000 families, receiving $461 million in public funding and being owed $14 million by the federal government.
The Trump administration has announced plans to cut the U.S. Housing and Urban Development (HUD) by 50% as part of Trump's effort to shrink the size of the federal government. Gunter is especially concerned about a proposed 84% cut to HUD's Office of Community Planning and Development (CPD), which oversees disaster recovery, homelessness services and Community Development Block Grants and other programs.
'My guess is that the bulk of folks on this call, if you get resources that flow through HUD, they come through that CPD office,' Gunter said. '[An 84% cut to CPD would be a] catastrophic impact to the flow of resources.'
NC Newsline previously reported that housing advocates across the nation are concerned about HUD Secretary Scott Turner's leadership because he supports policies that advocates believe will increase housing instability. Those policies include, for example, increasing the role of private equity in the rental market and opposing HUD's efforts to advance racial equity.
Turner recently announced that he would revoke $4 million worth of diversity, equity and inclusion (DEI) contracts at HUD. The move is keeping with a Trump directive to stamp out such efforts in the federal government.
Trump's executive order to end DEI initiatives could prove particularly troublesome for housing and community development advocates, Gunter said.
The DEI backlash is responsible for recent cancellations of HUD contracts for nonprofit capacity building grants and technical assistance programs that support community groups across the nation (Section 4 Programs), he said.
'These contracts were not canceled because of performance issues. They were not canceled because of a shift in strategy,' Gunter said. 'They were canceled because it was determined that their websites and or LinkedIn Profiles contain something related to DEI.'
Housing advocates say the decision to end the contracts will increase costs for families, stymie the creation of affordable housing and cost local jobs.
'Taken together, Section 4 and technical assistance programs provide a vital lifeline to communities across the country,' Shaun Donovan, president and CEO of Enterprise Community Partners, said in a statement late last month.
Donovan's organization is one of the nonprofits that received notification that HUD planned to cancel its capacity building grants and funding for its technical assistance programs that support community groups and housing providers across the country.
The former HUD secretary and director of the Office of Management and Budget added: 'Both [capacity building grants and technical assistance programs] provide support for building and preserving affordable homes, a particularly urgent need as we face an unprecedented housing crisis. These programs, though, aren't just about affordable homes. They allow urban, rural, and Tribal communities to assess their own needs and leverage private dollars to invest in senior housing, establish local health clinics, fund child care centers, and so much more. It's no surprise that both initiatives have long had deep, bipartisan support.'
Meanwhile, Gunter said that when nonprofits receive communication from their federal counterparts that does not feel right, it's easy to 'go inward and not talk about it' and keep one's head down.
'What has been clear thus far in this administration, that's not going to be a winning strategy,' Gunter said. 'There is no keeping our heads down hoping that we don't make waves and on the other end we're going to get the resources and continue to do the work.'
He warned that funding for affordable housing programs and initiatives could lose out to GOP-prized tax cuts. 'We are in an existential crisis in affordable housing and community development,' Gunter said.
Gunter urged housing advocates to call their U.S. Senators and House members to let them know about their concerns. It's important, he said, to explain that the proposed cuts will cost people their homes and that waste and fraud are not the problem when it comes to affordable housing; the problem is inadequate resources.
'We are in a moment where we got to work because we're looking at some scary numbers if the federal government pulls out more, or all of the affordable housing and community development investments that they make in North Carolina and across the country,' Gunter said.