As the Trump administration moves to reduce the massive federal deficit through budget cuts and layoffs of federal employees, it is reportedly considering slashing housing rental subsidies, raising concerns about severe financial impacts on California residents.
According to the Los Angeles Times on the 11th, the Trump administration is reviewing plans to cut funding for low-income housing assistance, commonly known as ‘Section 8,’ by 43% from this year’s budget of $32.8 billion as part of the 2026 budget process. The proposal includes phasing out the existing voucher system and transferring funds to state governments in the form of block grants, allowing states to design their own rental assistance programs. Additionally, the federal government is pushing to limit rental subsidies for “physically healthy adults” to two years, focusing aid on the elderly and disabled.
Under the current ‘Section 8’ program, tenants pay approximately 30% of their income toward rent, with the federal government directly covering the remainder for landlords. For example, if the rent is $1,500 and a tenant can afford $500, the federal government provides a $1,000 voucher.
This program allows tenants to choose private market housing rather than government-owned public housing, offering access to better school districts, education, healthcare, and job opportunities. Due to these attractive conditions, many people hoping to use Section 8 face years-long waiting lists.
Housing and Urban Development Secretary Scott Turner, addressing this policy shift, stated, “(The federal government) is too large and bureaucratic to function efficiently,” adding that “(the President’s budget) is a positive step to streamline existing programs and serve the American people to the highest standard.”
However, concerns are mounting that the Trump administration’s policy direction could exacerbate California’s already severe housing crisis. Experts criticize the federal budget cuts, arguing they will increase tenants’ rent burdens, worsen homelessness, and unfairly penalize workers who do not earn sufficient wages from employers.
Sonia Acosta, a senior policy analyst at the Center on Budget and Policy Priorities, said, “(This measure) will leave millions with less support,” adding, “President Trump promised to lower housing costs during his campaign, but this is producing the opposite result.” According to the Center, over 5 million U.S. households currently receive some form of federal rental assistance, with 560,000 of those in California. The average rent in California exceeds $2,000 per month, with one-bedroom apartments in some Silicon Valley areas reaching $3,360.
Due to skyrocketing housing costs and rents, California has the nation’s most severe homelessness problem. According to federal data, the number of homeless individuals in California last year was approximately 187,000, a 3% increase from the previous year. Lourdes Castro Ramírez, CEO of the Los Angeles Housing Authority, noted that federal housing assistance programs have significantly helped reduce homelessness in LA and expressed concerns about the repercussions of budget cuts. She stated, “Federal cuts could reverse our progress and make local efforts to address affordable housing, housing supply, and the homelessness crisis even more challenging,” adding, “The city looks forward to working with the administration and Congress to develop effective housing solutions.”