Denver Mayor Mike Johnston’s campaign to relocate 2,000 homeless individuals from city shelters into permanent housing could fall short of his goal this year — and the city is blaming the loss of federal funds and state budget cuts.
In a quarterly update, Office of Housing Stability (HOST) Senior Advisor Cole Chandler told members of the city’s Community Planning and Housing Committee that, although the mayor’s initiative has placed more than 1,485 people in shelters so far this year, as of June 30, only 743 out of 2,000 have exited into permanent housing.
Chandler attributed the lagging numbers to cuts to state and federal housing resources.
“We had about 100 vouchers through the Denver Housing Authority that have been pulled back,” Chandler said. “So far, it’s been communicated to us that 80 state housing vouchers have been pulled back, as we know the state is in ongoing conversations about their budget.”
Chandler insisted there is a liver lining: Exits to permanent and stable housing continue to outpace people going back to the streets.
“The first quarter of 2025 was our best quarter on record in terms of housing throughput — our operation is really working,” he said. “The system that we’ve built is being really effective at getting people from the (shelter) sites into housing, but we lost the housing resources, and we see that slowing (of exits) in Q2.”
The newest point-in-time (PIT) count, released in July by the Metro Denver Homeless Initiative, shows a 45% decrease in the number of individuals sleeping on the streets. However, the overall number of homeless individuals in the city increased from 2024 to 2025.
This year, a total of 7,327 people were counted as homeless — a number that grew by 788 year-over-year, according to the count.
The count is a nationwide, yearly, unduplicated tally of the homeless population conducted on a single night in January.
Despite the total increase, city officials maintained there are indicators that homelessness could be plateauing based on the decline in the number of “newly homeless” individuals.
In early June, Chandler told reporters that the city is “not planning” to add additional beds in 2025 but instead will focus resources on “throughput” and exiting those in shelters toward more permanent housing.
“Now, we’re at the point in our strategy where we’re really focused on how do we get those folks that we brought indoors into shelter, out of shelter, into permanent housing,” Chandler said.
But that could be challenging with a shift in the federal government’s focus away from “housing first,” the approach that is popular among advocacy groups, local officials said.
President Donald Trump signed an executive order on July 24 that calls for actions to increase accountability in the award of federal dollars for homelessness assistance and transitional living programs.
Advocates said the idea behind “housing first” is to address an individual’s most pressing need first — housing — and then provide other services, such as mental health, substance abuse treatment and looking for jobs later. Under this approach, there are no requirements to obtaining or maintaining shelter.
In contrast, some cities have adopted a “treatment” or “work” first approach, in which the level of service a person becomes eligible for is contingent on meeting specific requirements, notably going into drug treatment programs. Aurora called it “tough love.”
Some have argued that Trump’s proposal to abolish two programs that provide long-term housing financing and increase dollars for the Emergency Solutions Grant Program would open the door to a more “treatment first” approach.
Supporters of “housing first,” including advocacy groups in Denver, insist that it has a proven method to help homeless people. Critics said it has failed to tackle the root causes of homelessness, which they maintain are addiction and mental health issues.
Denver has fully embraced the “housing first” approach, while Colorado Springs and Aurora have adopted a “treatment first” or “work first” model.
In just over two weeks, Johnston will submit his 2026 budget proposal to the City Council for review, and among the most closely watched line items will be the city’s projected spending on initiatives aimed at addressing and preventing homelessness.
For 2025, Johnston allocated approximately $57.5 million for his homelessness initiatives.
“That ($57.5 million) is intended to serve 2,000 people a year, which comes out to about $27,000 to $28,000 — something in that range per person served,” Chandler said. “Over time, we’ll keep refining that budget, but our operating costs are targeting $57.5 million and under $30,000 per person served.”
