Policy shift to affect 588 beds for homeless in Chattanooga region

Staff file photo / People gather outside of the Chatt Foundation community kitchen. Federal officials are changing the focus of grant dollars from permanent supportive housing to temporary housing. Staff file photo / People gather outside of the Chatt Foundation community kitchen. Federal officials are changing the focus of grant dollars from permanent supportive housing to temporary housing.

By Jules Feeney November 14, 2025 4 min read

A shift in policy by the Department of Housing and Urban Development will significantly reduce funding for 588 permanent housing slots for people experiencing homelessness in the 11-county region around Chattanooga.

The change could force as many as 170,000 people across the country back onto the streets, according to reporting by Politico.

“That’s going to be extremely problematic because we know that it’s much more difficult to address a lot of your issues without a roof over your head,” said Mackenzie Kelly, the executive director of the Chattanooga Regional Homeless Coalition, which coordinates the federal grant’s local implementation.

A notice posted Thursday by the federal housing agency outlines grant application requirements for next year. The new policy upends two decades of housing-first federal homeless policy. It de-prioritizes permanent housing as a major part of homeless services and instead emphasizes mental health and substance abuse treatments and temporary, transitional housing.