Minneapolis invests millions in homeless housing projects as federal funding cuts loom

As cold sets in and and major federal cuts loom for housing the homeless, Minneapolis city leaders and service providers are fearful of what some are calling a “code red” situation that could force thousands to move back onto the streets.

On Nov. 14, the Department of Housing and Urban Development (HUD) announced it would be making massive changes that include slashing how much it offers for long-term “permanent supportive housing” to about a third of the $3.9 billion in aid, rather than 90%, instead prioritizing programs that require services like substance abuse treatment or work rules in exchange for housing.

Minneapolis Mayor Jacob Frey on Thursday addressed efforts the city has made in recent months to help the homeless, including the addition of nearly 130 new shelter beds and more than $14 million awarded by the City Council to jumpstart 11 affordable rental housing projects.

But it’s unclear if it will be enough to offset the overhaul to federal funding from HUD. Frey said the cuts are “deeply concerning” but was optimistic about the ongoing city efforts and partnerships to address the funding falloff anticipated for January.

“We need that money to provide the kind of basic city service that gives people dignity, and when those dollars are lost, we lose dignity along with it,” Frey said.

Minnesota received around $48 million last year from HUD for homeless services, 82% of which went to supportive housing. That amount would be massively reduced if HUD’s plans go through in January.

An estimated 170,000 people nationwide would be in danger of losing their homes due to the cuts, and at least 3,600 households in Minnesota are at risk, according to Chris LaTondresse, CEO of the Minnesota housing nonprofit Beacon.

“This is specifically designed to take a sledgehammer to supportive housing as a category of housing period,” he said.

LaTondresse described how he’s fearful of the federal changes leading to a backslide after significant progress made by Hennepin County over the years to get people out of homelessness.

In order to help residents stay housed and connected with services, Frey said the city is committed to building affordable housing “at a scale that puts us on the national map.”

“These investments mean hundreds more people housed, more families stable and a city that’s leading by example,” Frey said.

The 11 rental affordable housing projects awarded funding by the City Council would mean nearly 600 homes for Minneapolis families, seniors and individuals who are homeless.

John Tribbett, a service area director for the nonprofit Avivo, said that the new beds have assisted with the odds of finding shelter space each night. However, he said there’s still a great need for additional shelter space, as Avivo’s street outreach team encounters between 350 and 400 people each month who live on the streets.

If the federal changes go through, Avivo stands to lose the funding that helps keep 178 people housed, all of whom previously were homeless.