More than $40 million in federal funds to combat San Diego homelessness in limbo

Tens of millions of dollars in federal funding dedicated to combating homelessness in San Diego County may be in jeopardy as the U.S. Department of Housing and Urban Development looks to impose new rules on service providers slated to receive that money.

“We have many people — thousands of people here in the San Diego region — that are dependent on this funding,” said John Brady, of Lived Experience Advisers.

“If it doesn't come in in a timely manner, and we can't figure out how to fill the gaps, we're going to create thousands of more homeless people,” he continued, snapping his fingers, “like that.”

At issue are what’s known as continuum-of-care grants. Brady said dozens of service providers in the San Diego region rely on the HUD funding for housing, shelter and outreach operations. He noted the funding – more than $40 million – was already appropriated before President Donald Trump took office, entering the second year of a two-year funding cycle.

In March, HUD issued new guidance in its grant agreement, which is essentially the contract to receive the funding. That version of the grant agreement noted recipients “shall not use grant funds to promote ‘gender ideology,’ ” and cannot promote diversity, equity and inclusion or abortions.

The grant agreement also noted, “No state or unit of general local government that receives funding under this grant may use that funding in a manner that by design or effect facilitates the subsidization or promotion of illegal immigration or abets policies that seek to shield illegal aliens from deportation.”

HUD did not respond to a request for comment on Wednesday, but Sec. Scott Turner tweeted last month that the program “was used as a tool by the left to push a woke agenda at the expense of people in need.”

Multiple organizations said Tuesday that HUD had withdrawn that first version of the grant agreement and, within the past week, submitted new language with a similar intent, which providers were reviewing.

Townspeople is one of the nonprofits that relies on funding through the grants. Executive Director Melissa Peterman said the organization receive about $800,000 from the grants, which is used to provide rental assistance for more than 60 people each year, with a 95% success rate of participants maintaining their housing.

Peterman said Townspeople is 54% federally funded, with a third of that money coming from continuum-of-care grants.

“It's got some pretty strong language, but also very vague language about how to — what the funding can be used for, in relation to who you can serve, which is, you know, very different than how we've been able to operate in the past,” Peterman said.

“We're all housing providers, so none of us are in immigration work necessarily, or are using these funds for immigration purposes. So it's a little out of left field for it to be included in the agreement,” Peterman continued. “We don’t ask our participants to verify their citizenship before we provide services. We very much are looking to assist people who are in crisis as they present to us, and that's the No. 1 objective for us. So we don't really view that as promoting illegal immigration, but we're not sure if the federal government would interpret that as promoting.”

The funding is coordinated through the Regional Task Force on Homelessness, which serves as the lead agency for the San Diego area. The RTFH noted Tuesday that it is still awaiting further information and clarity on the potential impact. Several other providers said the same.

The Alpha Project said it’s slated to receive three continuum-of-care grants totaling $2.8 million beginning July 1, with the organization not expecting any changes yet.

Peterman of Townspeople said organizations anticipated adjustments to federal programs under Trump, but she “hoped that it wouldn’t be this drastic.”

“There have been times in the past where, given the changes in administration, funding levels for certain services and interventions change,” Peterman said. “This is different. It feels less like, you know, an ebb and flow and more like a sledgehammer just wiping out something entirely.”

Several members of Congress, including Reps. Scott Peters, Sara Jacobs and Mike Levin, signed a letter sent to Turner in early March, expressing concern about the grants.

“This is a tragedy — this is not how government is supposed to operate,” Brady of Lived Experience Advisers said, noting the average cost to move an individual from homelessness into housing ranges from $20,000 to $50,000.

“We need to pay our bills, and we need to be able to make sure that more people don't become homeless during this crisis,” Brady said.