For weeks, California's homeless service providers have worried about rumors that the federal government was going to cut funds for permanent housing.

Now those cuts are here.

Shortly after the federal go.. reopened, the U.S.

Department of Housing and Urban Development issued a policy change that will shift the majority of federal homelessness funds away from permanent housing and into temporary shelter.

Each jurisdiction applying for a piece of about $4 billion in federal homelessness funds during the 2025 fiscal year can now spend no more than 30% of their grant on permanent housing.

President Donald Trump's administration wants cities and counties to focus on temporary shelters that get people off the street quickly, and on programs that require people to participate in addiction treatment.

The National Homelessness Law Center says these changes will force about 170,000 people nationwide out of subsidized housing and back onto .. The new policy also attacks organizations diversity and inclusion efforts, support of transgender clients, and use of harm reduction strategies that seek to reduce overdose deaths by helping people in active addiction use drugs more safely.

Federal funds cannot be used for projects that further any of those efforts.

Los Angeles County, which has the largest homeless population in California, has $217 million at stake.

More than 80% of that currently goes toward keeping people in permanent housing, said Jessica Reed, associate director of Continuum of Care Planning for the Los Angeles Homeless Services Authority.

People living in subsidized permanent housing tend to be among California's most vulnerable, including those who have chronic disabilities and were homeless for years before moving indoors.

For CalMatters, I'm Marisa Kendall.