Nashville housing orgs in limbo after federal government abruptly reverses funding decision

Some Nashville organizations working to end homelessness are at risk of losing critical funding.

Last month, the U.S. Department of Housing and Urban Development, or HUD, made a policy change to significantly cut permanent supportive housing for people experiencing homelessness. Permanent supportive housing is an intervention that combines affordable housing assistance with voluntary support services (such as medical care, substance abuse treatment and employment assistance, among others) to tackle chronic homelessness.

The decision would affect various organizations providing support to nearly 1,000 Nashville residents. That includes organizations like the Mary Parrish Center, which supports victims of interpersonal violence, and the shelter-to-housing program Safe Haven Family Shelter. Safe Haven could see funding losses as early as next month.

“Without renewed HUD funding, Safe Haven cannot continue serving the more than 201 families per year who depend on these programs for continued housing, supportive services and pathways to stability and growth,” Safe Haven’s Chief Program Officer Grant Winter told reporters. “The stakes are incredibly high.”

With impacts looming, a group of nonprofits and cities, including Metro Nashville, sued the federal government.

“This new unexpected action from the federal government is contrary to law, chaotic, and cruel,” said Metro Law Director Wally Dietz.

HUD’s policy change was made after its deadline to do so had passed — in June.

“One of our legal grounds is: it’s too late,” Dietz said. “They cannot do this. The statute said they had a deadline. They missed it by five months.”

The lawsuit also takes issue with the nature of the policy shift, which veered away from HUD’s standing priorities.

“The law said that permanent supportive housing is the best policy and should be a priority for HUD,” Dietz said. “That’s the law. HUD has said ‘No, we’re going to allocate only 30% of prior funding for permanent supportive housing, and we’re going to emphasize these other programs.’ ”

A court hearing was set for this week in the U.S. District Court of Rhode Island. But less than a hour before it was set to begin, HUD rescinded their change — without making any promises to re-up the funding.

Judge Mary McElroy said it felt like “intentional chaos.”

“These cases can’t keep creating chaos because of the way government is failing to follow the sort of normal process,” McElroy said. “I understand changing policies — that’s not the issue. You can change the policy all you want, but there’s a mechanism for doing so. And it’s not doing things an hour before court.”

In a statement, Nashville Mayor Freddie O’Connell said he still had questions about what’s next.

“I’ve asked our Department of Law to continue working to defend our programs,” the mayor said. “We’ll persist until we’re confident the federal government is upholding its funding obligations under the law.”

Dietz said that HUD’s rescission “admitted defeat.”

“In the face of our lawsuit, HUD recognized today it could not defend the indefensible,” Dietz said in a statement. “The open question is whether HUD is just retreating to fight another day or, is planning to reinstate funding that was promised. We appreciate the Court’s concerns about possible gamesmanship and will continue to fight for a court order that HUD must honor prior year commitments for this fiscal year.”

The case is ongoing, and it remains unclear if the funding will be reinstated. HUD is required to respond to the plaintiffs’ request for a preliminary injunction by Dec. 15, with another hearing set for Dec. 19.