Impact assessment shows 40% of Permanent Supportive Housing residents are older adults
Changes would drive major cost increases for hospitals, nursing homes, and state Medicaid programs
Washington, D.C., Dec. 11, 2025 – Community Solutions today released a new analysis showing that the U.S. Department of Housing and Urban Development’s (HUD) FY 2025 Continuum of Care (CoC) Notice of Funding Opportunity (NOFO) would have significant consequences for older adults living in Permanent Supportive Housing (PSH), who now represent at least 40 percent of all PSH residents nationwide.
Although earlier this week, HUD withdrew the NOFO 90 minutes before a federal court hearing involving two lawsuits challenging the changes, HUD has signaled its intention to reissue the NOFO and has given no indication that the proposed policy changes will be revised. The threat to housing for thousands remains.
Community Solutions’ analysis of HUD’s data shows that the new 30 percent cap on Permanent Housing renewals called for in the NOFO would force communities to defund occupied units, effectively evicting medically fragile older adults into homelessness or high-cost institutions.
“HUD’s proposed new rules ignore the reality that tens of thousands of older Americans are living in Permanent Supportive Housing because they cannot safely or affordably live anywhere else,” said Rosanne Haggerty, President and Founder of Community Solutions. “These structural changes would remove the lowest-cost, most effective housing option for medically fragile older adults and shift enormous avoidable costs onto hospitals, nursing homes, and state Medicaid programs. At a time the country needs pragmatic responses to housing shortages and affordability challenges, these changes undermine both.”
“The report tells a story that we see too often: America’s housing policies are too often leaving older adults with low incomes overlooked and underserved,” said Katie Smith Sloan, LeadingAge President and CEO. “HUD’s new policy for homelessness funding, which thankfully now has been at least temporarily pulled back, put tens of thousands of stably housed older adults at immediate risk of homelessness. Even though homelessness among older adults is rapidly rising in the U.S., the policy effort undermines the future of Permanent Supportive Housing — a proven solution for addressing homelessness — for communities across the country; it’s past time to fully commit to solutions like PSH and other kinds of permanent housing connected to services and supports.”
PSH resident population is aging and becoming increasingly medically complex. The assessment highlights that 40% of current Permanent Supportive Housing residents are older adults, and 85% are disabled. Permanent Supportive Housing is the least costly setting that keeps older and disabled adults with medical needs safely housed and out of emergency rooms, nursing facilities, and homelessness. The analysis reveals dramatic demographic shifts:
- Nearly 40 percent of all Permanent Supportive Housing residents are age 55 or older, according to HUD’s 2022 AHAR data.
- The number of Permanent Supportive Housing residents aged 65+ increased by 62 percent between 2019 and 2022.
- 85 percent of adult Permanent Supportive Housing residents are living with a disability.
The HUD NOFO would eliminate rental support for the majority of these tenants. Costs of their care and shelter will shift to local shelters, hospitals and nursing homes, and state Medicaid programs. According to the assessment, Permanent Supportive Housing costs roughly $16,000 per year, while a year in a Medicaid-funded skilled nursing facility exceeds $100,000. A single hospitalization for a fall or unmanaged condition can surpass the annual cost of a Permanent Supportive Housing unit.
By reducing the availability of long-term Permanent Supportive Housing units, HUD’s policy would:
- Trigger higher hospitalization rates among displaced older adults;
- Increase nursing facility placements funded by state Medicaid budgets;
- Drive up emergency room usage and ambulance response costs;
- Increase unsheltered homelessness among people with complex and chronic conditions.
“The data are unequivocal: removing older adults from Permanent Supportive Housing is fiscally irrational,” said Adam Ruege, Principal for Policy & Evaluation at Community Solutions and lead author of the report. “HUD’s 30 percent cap effectively mandates the eviction of older tenants who cannot move to market-rate housing or private-pay assisted living. This does not save taxpayer dollars; it shifts substantially higher costs to hospitals, nursing homes, and state budgets.”
This policy shift ignores the affordability crisis impacting older adults on fixed incomes. The report documents the impossibility of “moving on” for older Permanent Supportive Housing residents:
- The average SSI income is $914 per month, compared to $5,350 per month for assisted living.
- There is no affordable alternative between Permanent Supportive Housing and a costly skilled nursing facility supported by taxpayer dollars.
Community Solutions advises federal policymakers to act immediately to prevent displacement and avoid a surge in downstream public costs:
- Congress should direct HUD to renew all CoC grants expiring in 2026 for 12 months, preserving homes while the policy is reviewed.
- Federal policy should provide local flexibility and pragmatic tools that allow communities to maintain housing for older adults who cannot safely or affordably transition elsewhere.
“We need federal policy that reflects real conditions on the ground,” Haggerty added. “That means recognizing that for many older adults, success is measured by continued stable housing, not by forced churn. Communities need solutions that preserve homes and reduce avoidable costs.”
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About Community Solutions
Community Solutions is a nonprofit working to make homelessness rare and brief. It leads Built for Zero, a network of more than 160 US communities using a field-tested, outcomes-focused approach to reducing and preventing homelessness. Learn more at www.community.solutions or follow us at @CmtySolutions.
Media Contact:
Brian Jones
bjones@community.solutions
