Philadelphia may face a major shift in federal housing funding as a recent plan issued by the Trump administration could cut tens of millions of dollars in aid aimed at combating homelessness. Advocates warn that the proposed changes could significantly disrupt permanent housing programs and put formerly homeless residents at risk of losing stable housing.

According to the U.S. Department of Housing and Urban Development (HUD), the plan is designed to “restore accountability” and promote “self-sufficiency” by addressing root causes of homelessness, including mental health challenges and substance use disorders. However, nationwide, the strategy could displace approximately 170,000 people by reducing two-thirds of funding allocated for permanent housing.

In Philadelphia, the city currently has 2,330 permanent housing units, many supported by $47 million in HUD funding received last year. The proposed cuts could impact the city’s ability to maintain these units and support residents.

Mayor Cherelle L. Parker continues to push forward with an ambitious plan to expand the supply of affordable housing in Philadelphia, despite the potential funding challenges. City officials have highlighted the critical role federal funds play in providing stable housing and addressing homelessness.

What This Means for the Philadelphia Housing Market

• For buyers and renters: Reduced federal funding could affect the availability of affordable housing units in the city, potentially increasing demand and prices for market-rate rentals and homes.

• For investors and developers: Understanding policy changes in HUD funding can help anticipate shifts in housing demand and opportunities for development in Philadelphia.

• For the community: Maintaining stable housing is essential for neighborhood stability, economic growth, and social wellbeing. Cuts to federal aid could have far-reaching impacts.

The proposed HUD changes underscore the importance of monitoring federal housing policies, particularly for residents, buyers, and investors in Philadelphia’s competitive housing market.

Source: Philadelphia Inquirer, 11/24/2025