Individuals experiencing homelessness in Sacramento County sit in encampments at the intersection of North B Street and Ahern Street in 2025. Photo by Seth Henderson

SACRAMENTO REGION, CA (MPG) - Sacramento officials and homelessness response leaders are warning that proposed federal funding changes and ongoing government shutdown disruptions could severely impact local housing stability and services for people experiencing homelessness.

On Oct. 28, elected officials from across Sacramento gathered to discuss strategies to strengthen partnerships and accountability in addressing homelessness. The meeting emphasized the urgency of coordination and a shared commitment to lasting solutions, according to Sacramento Steps Forward (SSF), the nonprofit organization that leads the region’s homelessness response system.

“Federal funding is the backbone of many of our community’s most successful housing programs,” said Lisa Bates, CEO of Sacramento Steps Forward. “With shifting policies and funding caps being proposed, we must work together locally to preserve progress and protect our most vulnerable neighbors.”

The U.S. Department of Housing and Urban Development (HUD) is expected to propose a major shift in federal homelessness funding by capping the share of Continuum of Care (CoC) dollars that can support permanent housing at 30 percent. Sacramento currently dedicates nearly 87 percent of its $40.5 million in federal CoC funding to permanent housing, supporting 2,197 people in 1,592 subsidized housing units.

Those in permanent housing represent some of Sacramento’s most vulnerable residents: about 70 percent live with a disability, 21 percent are seniors, and 30 percent are youth. Nearly 54 percent have maintained housing for more than five years, and nearly one in three for more than a decade, according to SSF data.

If the proposed HUD funding cap is approved, Sacramento could lose support for nearly 65 percent of its current housing capacity, potentially displacing 1,431 individuals and families. Delays in the release of CoC funds due to the federal government shutdown are also disrupting payments to housing providers and threatening the continuity of critical services.

Sacramento Steps Forward and its partners are developing contingency plans to sustain housing and services amid the uncertainty. The organization is working to advocate for stable federal and state funding, strengthen landlord partnerships, and identify at-risk individuals to prevent a return to homelessness.

“This moment is an imperative to further invest in a strong, coordinated homelessness response system,” Bates said. “We are committed to data-driven decisions, strong partnerships, measurable progress, and compassion in every approach.”

For more information about Sacramento Steps Forward and its homelessness response efforts, visit www.sacstepsforward.org.