Multnomah County is pausing new housing placements for hundreds of homeless residents after adjusting its budget to address the loss of state funding it had expected to receive.

The Multnomah County Board of Commissioners voted 3-2 October 30 to approve funding for 1,051 people to continue their housing process through rental voucher programs. But it also paused rapid rehousing programs—including those that move people directly from shelter into housing—after approving a budget modification to accommodate for a $4.5 million Homeless Services Department funding gap.

The city and county have long had disagreements about what to prioritize in homelessness spending, and the latest budget woes add to the tension between both parties over whether to invest in the city’s temporary shelters or use limited dollars for direct housing efforts.

For the 2025-26 fiscal year, the county’s Homeless Services Department is receiving $26 million from the state. That’s well short of what it expected from Governor Tina Kotek’s recommended budget when the county adopted its budget in July. The state legislature, a Democratic supermajority, reduced funding to the department by $28 million, or 55 percent less than Kotek’s recommendation.

That means the county will be unable to offer new housing vouchers to nearly 700 people this fiscal year, some of whom are already looking for housing.

The city, for its part, remains focused on Mayor Keith Wilson’s plan to move homeless residents off the streets and into overnight congregate shelters. The county also maintains shelter programs, but is also responsible for coordinating local, state, and federal funding for service providers, eviction prevention, and rehousing programs. According to the county, 82% of people enrolled in rapid rehousing programs remain housed after two years.

Wilson’s spokesperson, Cody Bowman, said Wilson is disappointed by the reduced funding for the Homeless Services Department and its broader impacts.

“These cuts jeopardize the progress Portlanders were counting on to move people from shelters into permanent housing,” Bowman said. “The City of Portland continues to coordinate with Multnomah County, the region’s lead on health and human services, to align case management, vouchers, and shelter exits so we don’t lose momentum. This development presents real challenges to delivering on our shared goals.”

Bowman added that the city’s shelter program is intended as an emergency short-term safety net, not a substitute for rehousing.

“At the end of the day, Portlanders are counting on us to get unhoused neighbors off the streets, into shelter, and moved through the continuum to permanent housing,” Bowman said. “We have to deliver.”

However, when Wilson presented his blueprint to the City Council in January, he said 90-day limits for how long a person will stay in shelters will help them want to move into housing.

“Stay limits encourage guests to engage with services and move from emergency shelters to permanent housing,” Wilson said. “Without this rule, there is often little incentive for an individual to address their root cause of homelessness.”

Asked if Wilson is considering waiving the stay limits in light of current circumstances, Bowman said if the person is engaged with an outreach worker helping them reach “the next step in their journey,” stay limits can be waived at the worker’s discretion.

The city and county entered into a joint homelessness agreement in July 2024 to determine which government is responsible for various aspects of the region’s homelessness response. One of the tenets of that agreement was that the county would add 1,000 new shelter beds by the end of 2025.

The county board voted October 30 to maintain the 815 beds it already added toward its goal, in order to ensure people already being served by the programs would not lose their housing, but the county is expected to miss the 1,000-bed goal. With new housing placement dollars going away, and temporary shelters taking a considerable amount of resources, critics say the pause in placements may leave people stuck in shelters rather than permanent housing.

“I share a very real concern that the emergency shelter to out-of-shelter placement is one in which we will bottleneck,” Commissioner Meghan Moyer said in the October 30 board meeting. “I am concerned about that. I am also concerned we have unused shelter beds. I have my own feelings of why they're unused. I think they probably would be used if they were more appropriate.”

That’s a criticism Wilson has faced as he remains focused on building out the city’s temporary overnight shelter capacity. Wilson is close to delivering on his promise to add 1,500 beds to the system by the end of the year, adding a total of 1090 since January. The county has sent $15 million in earmarked Metro Supportive Housing Services funds to the city to support Wilson’s plan, and $375,000 in one-time funds to add 200 winter shelter beds in late 2024.

Kristle Delihanty, the founder and director of the Lents-based nonprofit PDX Saints Love, said the pause will impact her work to house 15 people under her county contract. That’s already down from her initial proposal to house 60 people. While the loss of funding does not halt the housing process for people who have already applied or been accepted for housing, it means people she has been working with under her previous agreement will likely hit a dead end in their search.

“They qualified because they have some income and they look like they can be sustainable after the first year,” Delihanty said. “But we’re going to have to tell them, ‘I’m so sorry we have to put that on pause’—which doesn’t feel good.”

Delihanty said in the face of federal cuts to SNAP and other programs, the city of Portland is spending a significant portion of its state, county, and city resources on short-term shelters, when the money could be used for housing placement.

“Now, we have a mayor and all of his cronies that are mimicking what is happening on a national level in our city,” Delihanty said. “This city that we fought for—progressive values that saw people, that didn’t lose sight of humanity—he’s ripping it apart. And that angers me, and it’s devastating me.”

County data shows that since January 2024, the number of people with at least one disability who are at risk of or are already facing long-term homelessness—defined as “chronically homeless”—has outpaced the number of people gaining housing.

News of the housing voucher pause comes as Wilson resumes enforcement of the city’s homelessness rules, the same week he placed the Portland Housing Bureau’s director on leave.

“This is a flashpoint,” Delihanty said.

According to Homelessness Services Department director Anna Plumb, the outlook is grim in the face of federal cuts and local economic challenges.

“We do want to acknowledge that we have more discussions coming our way that are going to be even more difficult from the ones we've had with you over the last month,” Plumb said in the October 30 board meeting. “We anticipate further reductions in funding looking at next fiscal year.”

Multnomah County Chair Jessica Vega Pederson, and Commissioners Vince Jones-Dixon and Shannon Singleton voted yes on the budget modification. Moyer and Commissioner Julia Brim-Edwards voted no.