Homelessness jumps again in Kentucky as Trump administration moves to cut housing funds
As homelessness rises in Kentucky, especially outside the two largest cities, the Trump administration wants to cut hundreds of millions of dollars in federal support for state housing programs.
Recently released data showing an increase in Kentuckians experiencing homelessness comes from the annual 'Point-In-Time' count conducted each January to capture a snapshot of homelessness across the country. The Kentucky Housing Corporation, a quasi-governmental agency that manages federal funding for housing, publishes the numbers.
In January 2025, volunteers and agency outreach workers counted 5,789 individuals who lacked 'a fixed, regular, and adequate nighttime residence,' the federal definition of homeless used for the survey. That was a 10.7% increase from January 2024.
The most significant percentage increases in homelessness were outside the state's two largest cities. Louisville and Jefferson County saw an increase of 6%, Lexington and Fayette County saw an increase of 12%. The increase in the other 118 counties was 13.3%.
Shaye Rabold, a technical administrator for the Kentucky Housing Corporation who helped coordinate the January count, told the Lantern the rise in homelessness was unfortunately 'not surprising.'
She said calls from people needing assistance statewide continue to increase, driven by people who became homeless less than a year ago. It's the fourth year in a row the count has risen in Kentucky.
A main reason for the rise, Rabold said, is the state's ongoing housing shortage, especially the lack of low-income rentals.
'It's a problem nationally, but we know it's a problem in Kentucky. And so when you have people that literally have nowhere else to go — they're pushed out of the market, or they don't have family support that they can lean on, whatever the case might be — it's going to lead to increases in homelessness,' Rabold said.
The survey also counts people who meet the federal definition of unsheltered homeless because they are sleeping in cars, the wilderness, abandoned buildings and similar settings.
The largest percentage increase in unsheltered homelessness from 2024 to 2025 — 25% — also was outside Lexington and Louisville.
Adrienne Bush, the executive director of the advocacy group Homeless and Housing Coalition of Kentucky, said the picture some people have of homelessness is 'someone on a pretty busy street in a city in a tent.'
'The picture is more nuanced and fuller than just that mental image,' Bush said, referencing the significant rise in rural homelessness reflected in the data. 'The federal assistance that we do have in place is working to house people as quickly as possible, but the larger housing market conditions are creating these additional pressures.'
Critics say the annual nationwide 'Point-In-Time' effort is an undercount, pointing to how the count is conducted on only a single day in January when people experiencing homelessness are more likely to find temporary shelter indoors. Both Rabold and Bush said while the count is not perfect, it serves as a solid estimate that shows the general trend of homelessness in Kentucky.
The vast majority of counties and rural communities in the state do not have emergency shelters, which often means there is 'nowhere else for people to go but to sleep outside,' Rabold said.
Rabold also said the increased numbers outside Louisville and Lexington could be partially attributed to having additional resources for 'street outreach' in rural areas — something the housing corporation has been able to provide thanks to earlier increases in federal funding — a trend that could sharply reverse under the Trump administration.
Kentucky could lose about $286 million in federal housing funding — out of about $651 million in current funding — under a proposed 44% cut to the U.S. Department of Housing and Urban Development (HUD) budget proposed by the Trump administration. That's according to data from the Urban Institute provided to the Lantern by the Kentucky Housing Corp.
While most proposed funding cuts would come from federal rental assistance programs, the cuts also would impact HUD funding for homelessness assistance and affordable housing construction. The remaining federal funding for rental assistance would be allocated to states 'to design their own rental assistance initiatives based on their unique needs and preferences,' according to a proposed 2026 fiscal year budget outline by the Trump administration.
The budget proposals are recommendations from the executive branch and could be changed as Congress crafts and approves a federal budget. In a visit to Arkansas earlier this year, Housing and Urban Development Secretary Scott Turner said the agency's ultimate goal was to 'get people off subsidies and live a life of self-sustainability.'
Kentucky Housing Corp. officials have spoken out against the significant budget cuts.
Wendy Smith, the deputy executive director of housing programs, told a Kentucky Public Radio reporter that while the state housing corporation would like to 'streamline' the 'Section 8' voucher program, the budget proposal was a 'radical cut' that would be 'disruptive at so many levels across Kentucky.'
Smith told state lawmakers in late June there was a need to boost housing supply across all income brackets. She said the impacts of a constrained housing supply were multifold, including a rise in homelessness.
'We have higher average housing costs right now. Kentuckians are spending too much of their monthly income on housing costs. We have lower home ownership rates, too little workforce housing, increased household instability as evidenced by evictions and then more homeless Kentuckians,' Smith said. 'The federal budget uncertainty makes a big question mark on a lot of this.'
Rabold disputed assertions that the continued rise of homelessness in Kentucky is evidence that federal housing funding has been ineffective. Federally funded programs designed to help homeless people find housing and other supportive services are very effective, she said. What the funding is not designed to do, she said, is prevent people from becoming homeless in the first place.
'That is more of a housing supply issue than anything,' Rabold said. 'I use the metaphor of like a bathtub with a faucet on, and you're bailing water out — but the faucet keeps running.'
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