Connecticut Homelessness Rising as Federal Funding Faces Uncertainty

Connecticut’s homeless population has grown steadily over the past four years while critical federal funding remains at risk, according to a new analysis that highlights the mounting challenges facing the state’s most vulnerable residents.

A recent report from DataHaven, a statewide data organization, examined the potential impact of federal policy changes on Connecticut’s homelessness response system, according to Connecticut point-in-time homelessness count data. The analysis comes as the Trump administration signals continued efforts to reshape how federal housing dollars are distributed.

In November, the U.S. Department of Housing and Urban Development attempted to shift funding away from the Continuum of Care budget, which would have jeopardized permanent supportive housing programs nationwide, according to the DataHaven report. While a court order halted the funding shift, the proposed change would have impacted more than 6,000 Connecticut residents and cost the state up to $98 million annually in homelessness response funding.

Continuums of care coordinate regional systems that serve the unhoused population, with funding flowing from HUD to service providers either through these continuums or state government. Gov. Ned Lamont responded to the federal uncertainty in December by allocating $5.2 million from his emergency fund, approved by the legislature, to help the continuums of care after federal cuts.

Thousands of Connecticut residents across the state rely on permanent housing programs, according to the report. The programs typically serve people who were formerly homeless by offering them housing, with much of the support going to people with disabilities who need ongoing services beyond shelter. Organizations like the Housing Collective, which recently marked 20 years serving Connecticut and launched a major donor campaign, exemplify the long-term commitment needed to address these systemic challenges.

The Trump administration has indicated plans to continue changing how federal housing dollars are spent, prompting the DataHaven analysis of potential consequences. For years, HUD has favored a “Housing First” approach to homelessness, operating on the principle that other problems can be more easily addressed once someone has housing.

The Trump administration has taken a different approach, stating in November that the Housing First model fails to address “the root causes of homelessness, including illicit drugs and mental illness,” according to the DataHaven report.

However, national research has tied increased rates of homelessness more to increased housing costs and a lack of available housing than substance abuse or mental illness, according to the report. The DataHaven analysis supports those findings.

During a Housing Committee public hearing on Tuesday, homelessness service providers referenced the DataHaven report while testifying on legislation that would ban landlords from requiring more than one month’s rent as a security deposit.

Sarah Fox, chief executive officer of the Connecticut Coalition to End Homelessness, addressed housing barriers in her written testimony to the committee.

“That is prevention in plain language: when the front door to housing is too expensive, instability grows, and our homelessness response system becomes the backstop,” Fox said.

The testimony underscores concerns that high housing costs create barriers that push people toward homelessness, placing additional strain on response systems already facing federal funding uncertainty.

The combination of rising homelessness numbers and potential federal funding cuts creates a challenging environment for Connecticut’s efforts to address the crisis. With the Trump administration signaling continued policy changes and thousands of residents depending on current programs, state officials and service providers face difficult decisions about maintaining support systems.

The DataHaven report highlights how federal policy shifts could significantly impact Connecticut’s ability to serve its homeless population, particularly those with disabilities who require ongoing support services beyond basic shelter.