Federal Government Shutdown and Mass Layoffs Risks Crippling HUD in the Long Term

After negotiations over a short-term funding bill did not result in an agreement for the new fiscal year, the federal government entered a shutdown at midnight on October 1, 2025.  

During the shutdown, US Department of Housing and Urban Development (HUD) - and US Department of Agriculture (USDA)-assisted households will continue to receive their rent payment on time, through November. These households retain their rights, which must be upheld and enforced regardless of the government's operating status. 

This shutdown brings additional uncertainty to an already precarious housing ecosystem. A recent Office of Management and Budget memo instructs federal agencies to furlough non-essential staff and consider permanent layoffs. Since January, an estimated 2,300 HUD employees, or 23% of the agency’s workforce, have left. These reductions are straining the remaining staff’s ability to perform core functions efficiently.

Threatening additional layoffs during the government shutdown reflects a concerning trend from this White House. Since taking office, the Trump administration has consistently sought to weaken federal programs, particularly anti-poverty initiatives such as rental assistance, public housing, and civil rights enforcement.

Earlier this year, President Trump’s budget request proposed significant reductions to rental and homelessness assistance. The administration has taken steps that weaken Fair Housing Act protections, limit housing access for immigrants and LGBTQ individuals, and disregard research supporting low-barrier housing with supportive services as the most effective solution to homelessness. Additionally, the White House has withheld funding for congressionally approved programs, disrupting the balance of power between the Executive and Legislative branches.

The uncertainty of whether the White House can be trusted to abide by the terms of a negotiated agreement to fund the government greatly complicates the prospect of a timely resolution to this devastating shutdown.

NLIHC will continue to monitor the shutdown and its potential effects on HUD’s affordable housing and homelessness assistance programs. For guidance on advocating for strong federal investments in affordable housing, please visit our Advocacy Hub. To stay updated on Congressional actions, read NLIHC’s Memo to Members & Partners.

Read NLIHC President and CEO Renee M. Willis’ statement on the shutdown here.