Trump HUD Cuts Dampen New Affordable Apartment Openings in South Bay

South Bay housing officials are cheering the opening of a new affordable apartment complex adjacent to a once massive homeless encampment in San José, but the celebration has been dampened by looming cuts to federal housing funding by the Trump administration.

Elected leaders and advocates for the unhoused in the region say changes to a longstanding federal homelessness support program will make it harder to get and keep people housed, and threaten the stability of thousands of families in pricey Silicon Valley.

“We are not going to get more people off the street by pushing others onto it,” Rep. Sam Liccardo said Monday while standing in front of a new building for formerly homeless and lower-income families in the Little Saigon district. “This strategy by the Trump administration amounts to cutting one end of the fabric and stapling it onto the other and calling it one big, beautiful blanket. It is not going to cover us.”

Liccardo, a Democrat whose district runs from Los Gatos up through parts of the Peninsula, made the comments this week outside The Charles, a new building opening for occupancy this month, just minutes before 23-year-old Kaytana Alvarido and her family were shown their brand-new, two-bedroom apartment for the first time.

Alvarido teared up with joy as she and her husband, Alberto Barragan, 28, and their 1-year-old son Lucius walked through the door into the living room.

“Wow, it’s beautiful. This is your new home, baby,” Alvarido said to the toddler.

The family’s apartment is one of 99 at the complex, which is named in honor of the late Dr. Charles Preston, the former Director of Psychology Services for the Valley Homeless Healthcare Program in Santa Clara County.

“I think the most important thing I’m looking forward to is setting up our son’s room because we never thought that we would even have the space for that,” Alvarido said. “Just having his own space to play and be free is so important and so exciting.”

She and Barragan lived in a shelter for the past year with Lucius, and before that, the couple spent time living on the streets, in their car, and in motels while Alvarido was pregnant.

“There were a lot of times where my husband would go even without eating to make sure that I would eat and that we could pay for a room to not have to sleep outside,” Alvarido said.

The building is located less than a block away from the site of a formerly sprawling homeless encampment infamously dubbed The Jungle, where hundreds of people lived in rough conditions, exemplifying the region’s harsh wealth gaps and intense unaffordability.

While The Charles was built using a substantial mix of funding from a local homelessness tax measure, state and city grants and credits, officials say the money to support rental subsidies for tenants and building operations is largely paid for by the federal funding that is being redirected.

The move hangs a cloud of uncertainty around the future of existing housing projects like The Charles, and could prevent other similar projects in the region from opening.

The U.S. Department of Housing and Urban Development, headed by Secretary Scott Turner, issued new guidelines earlier this month that will shift the majority of the $3.9 billion program

funding away from permanent housing and rapid rehousing efforts, toward more temporary or transitional housing and supportive services for substance abuse and mental health.

In Santa Clara and San Mateo counties, that could amount to as much as a cumulative $35 million loss annually, amid a potential $100 million hit across the entire Bay Area.

Turner, in a statement, called the program a “Biden-era slush fund that fueled the homelessness crisis,” and said the change “restores accountability to homelessness programs and promotes self-sufficiency among vulnerable Americans.”

Vivian Wan, the CEO of Abode Services, a Fremont-based nonprofit housing provider in the Bay Area, said the federal government’s move away from “housing first” approaches to helping people get off the street isn’t just a policy change, it’s a moral shift.

“Everyone in our community deserves a stable place to call home, regardless of how much money they make,” Wan said during a press conference on Monday. “We must continue to invest in permanent housing solutions or people will just get stuck in shelters, transitional housing, interim housing, and many people will stay outside and be pushed outside.”

Liccardo sent a letter to federal housing officials on Monday. More than 30 other members of Congress, including Zoe Lofgren and Speaker Emerita Nancy Pelosi, signed onto the letter, which challenges the administration’s decision and asks for more information.

“It does not move the ball forward a single inch to be pushing hundreds of thousands of people out of their existing homes and claiming that we’re going to come up with better solutions for homelessness,” Liccardo said. “We need to keep people housed while we are working on these more intractable challenges.”

He also said he plans to talk to his Republican counterparts whose districts are also affected by the changes to “see if we could put together legislation to reverse the administration’s decision.”

Gov. Gavin Newsom on Tuesday announced that California, as part of a 20-state coalition, filed a lawsuit over the changes.

“The Trump administration’s callous and unlawful decision threatens to upend generational progress and strategies that are making a difference in turning the nationwide homelessness crisis around and jeopardize housing access for American families,” Newsom’s office said in a statement.

Alvarido said she hopes the funding for programs like the one supporting her family can continue.

“Because all families, especially families with children, they deserve to have a chance to have this security and the feeling of safety that we get to feel now,” she said.

The first day in their new home was one filled with excitement and possibilities. She and Barragan talked about how important it is to have a space they can properly baby-proof, how she is looking forward to making a big batch of brownies in their new kitchen, and taking a shower in a private bathroom.

“My husband was saying that we should host Christmas, so I guess that might be on the table,” Alvarido said. “And definitely having our friends and family over to enjoy the new space with us and start creating memories.”