Minnesota’s housing system faces new threat as demand for shelter and meals grows

By late morning at Catholic Charities’ Dorothy Day Place campus, the line for lunch was already spilling into the lobby — older adults leaning on walkers, workers on their break and people who slept on thin mats the night before. Others came simply because groceries have become too expensive to stretch through the week.

Lunch has always been a lifeline. But staff say it has rarely looked like this.

Dorothy Day is serving about 100 more people per day compared to earlier this year — a surge that began even before the federal shutdown, the sudden pause in food assistance payments and the requirement for some Minnesotans to reapply for benefits.

“We’ve been at about 360 people per meal,” Catholic Charities Twin Cities CEO Jamie Verbrugge said. “The economy is stretching people in every direction.”

That pressure is mounting just as a new threat emerges: a federal shift in homelessness policy that could jeopardize Minnesota’s permanent supportive housing system, the backbone keeping thousands of people off the streets.

Inside the cafeteria, people carried trays of black beans, potatoes and chips to round tables. Some had slept in the emergency shelter; others live in the neighborhood and rely on the free meal to offset rent or medication costs. A growing number are older adults entering homelessness for the first time.

Verbrugge said pandemic-era demand never truly receded — and the recent disruptions have been especially destabilizing for people already living on the margins.

Shelter beds are full nearly every night, and day centers stay crowded, offering warmth, bathrooms and help navigating benefits.

“We’re seeing more people from the community come in,” Verbrugge said. “One free meal takes a little pressure off. Food costs are going up. Housing costs are going up. Everything is really stretching people right now.”

As need rises, Catholic Charities is bracing for a sweeping change from the U.S. Department of Housing and Urban Development. HUD’s new funding notice that Catholic Charities received signals a pivot away from permanent supportive housing — affordable apartments paired with on-site case management — and toward transitional programs with treatment or work requirements.

Minnesota received $48 million from HUD to treat homelessness last year. Eighty-two percent of that money funded permanent supportive housing.

Provider groups warn the new priorities could shrink or cap those dollars, forcing organizations to overhaul permanent supportive housing that took decades to build.

Catholic Charities operates about 1,000 units of permanent supportive housing in the Twin Cities. Staff say the model works: roughly 90 percent of residents remain housed or find other housing.

“We know what works because we see it every day,” said Elizabeth Lyden, executive vice president of external affairs. “If these changes go through, we risk undoing over a decade of progress.”

For people who rely on Dorothy Day, the policy shifts feel like another blow in a year full of them.

Holding her service dog Stormy, Dawn Owens said she’s navigated housing insecurity in Illinois, California and Minnesota. The mailing service at Dorothy Day keeps her casework moving. The meals keep her fed.

“With the government cutting everybody’s food stamps, how are we supposed to eat?” she said.

“There’s no big solution,” Ginger said. “But I’m grateful. They help us get back on our feet.”

As temperatures fall, staff expect demand to climb. Even with the county reservation system, several people each night still walk up hoping for a bed. A missed appointment or lost document can mean someone ends up outside again.

But the greater worry is what happens if federal dollars shrink just as the season of greatest need begins.