As federal homelessness policy shifts, Austin’s supportive housing model faces political scrutiny

By Isabel Neumann

Reporting Texas

Austin has invested millions of dollars into permanent supportive housing, a strategy of providing long-term housing and rental assistance that is widely seen as one of the most effective ways to reduce chronic homelessness. But as federal funding grows uncertain and costs continue to rise, city leaders are facing questions about how long they can afford to sustain this costly approach.

Supporters of the model argue those costs must be weighed against the consequences of inaction.

“Providing services costs money, but the evidence does not suggest that it is more expensive or less efficient than paying for people to live in jails and prisons,” Thurman said.

Since 2020, Austin has spent about $50 million buying and converting motels and other properties into supportive housing, making it one of the city’s most expensive responses to homelessness. More than 3,000 people moved into housing in Austin-Travis County in 2024, according to Ending Community Homelessness Coalition (ECHO), a nonprofit that serves as the lead agency for Austin’s homelessness initiatives. Yet thousands remain without shelter, highlighting the gap between available housing and community needs.

The strategy has drawn increasing scrutiny as costs climb.Voters signaled hesitation about expanding that investment in November 2025, rejecting a property tax increase that would have generated about $110 million annually for city services, including roughly $35 million for homelessness programs. The outcome underscored growing tension over how much the city should invest in long-term housing versus lower-cost options such as prevention programs and temporary shelter beds.

“Housing is a really important and necessary condition for helping people regain health,” said Whitney Thurman, an assistant professor at the University of Texas School of Nursing.

Austin’s model provides subsidized apartments paired with on-site medical care, mental health treatment and case management for people who have been homeless for a year or more, often while living with disabilities or chronic illnesses.

“It’s not the only way that people can end their homelessness, but it is the level of care that some folks need who have been living outside for a long time and have more complicating factors in their lives,” said Chris Davis, spokesperson for ECHO.

Residents in the program may receive services such as primary health care, addiction treatment, therapy, job assistance and help with managing money. Resources providers say such services are difficult to get access to without stable housing.

One of those properties is Pecan Gardens, a permanent supportive housing community in Northwest Austin. The city purchased the former Candlewood Suites for about $9.55 million and redeveloped it into permanent supportive housing for adults 55 and older who are transitioning out of homelessness. It has an on-site nursing clinic run by the University of Texas.

Doctors, nurses and social work students provide primary care, manage chronic illnesses, conduct health screenings and connect residents with ongoing treatment, services that providers say are nearly impossible to coordinate for people living on the street. Bringing care directly to residents also removed barriers such as transportation challenges and the difficulty of scheduling appointments.

“When people are experiencing homelessness, there is typically not a lot of capacity for managing health conditions because people don’t have access to regular medical care,” Thurman said. “Once people have a stable place to live, they can focus on their health, recover from the stress of homelessness and begin managing ongoing medical conditions.”

Those programs, however, may depend heavily on federal policy. And policies are changing. On Nov. 13, the Trump administration proposed changes to the U.S. Department of Housing and Urban Development’s Continuum of Care program that would limit the share of federal grant funding communities can direct toward permanent supportive housing, according to ECHO. Previous guidelines gave local providers more discretion in how funds were distributed.

“There’s been a lot of back and forth and a lot of uncertainty,” Davis said.

Although recently renewed federal grants appear secure for now, future funding competitions are expected to center around transitional housing, a shift that could put hundreds of Austin residents at risk if local providers lose resources needed to sustain permanent supportive housing programs, Davis said. Without those grants, local providers could struggle to pay for the housing and services that help residents remain housed.

Roughly 500 people currently living in permanent supportive housing locally rely on programs that receive federal funding, Davis said. If those funds are reduced, providers could struggle to keep people housed and maintain the availability of these apartments.

Permanent supportive housing also carries a substantial ongoing cost. A 2025 HomelessStrategy Office memo projected roughly $7.9 million per year in supportive service funding for nearly 400 units in development, a figure expected to climb into the tens of million annually as the city works to expand housing capacity.

Supporters say those costs should be weighed against the public expense of leaving people unhoused.

“The biggest pressure that our homelessness response system faces right now is really uncertainty,” Davis said.

“We know that we need to grow our system to be able to get more folks into housing more quickly than we currently are,” Davis said.

Despite strong research support, permanent supportive housing continues to face political resistance, something Thurman believes is often driven by public perception.

“People experiencing homelessness are people, and everybody deserves a safe space to live,” she said.