(The Center Square) — The New Orleans Office of Homeless Services and Strategies is bracing for deep reductions next year that could trigger layoffs, stall rehousing, and send encampments back into commercial corridors, according to department leaders.
Director Nate Fields said the department’s 2025 budget of about $11.1 million would fall to $6.41 million in 2026, a $4.68 million decrease.
Personnel funding would shrink from about $1.25 million to $461,000, while the fund that pays for rapid rehousing and case management would drop from $9.84 million to $5.95 million, according to the department.
“We’re going to have to use a lot of imagination if we can’t get the additional funding,” Fields told the City Council. “One of my fears is us going backwards with encampments… we’ve already seen the uptick because we can’t keep up with the inflow.”
Fields said $3.89 million proposed to be cut would have funded the city’s rapid rehousing program and the program’s partners — chiefly United Way — to move people from shelters into apartments.
“What you’ll see is… by January, February, you’ll actually start seeing large chunks of that money come out as they’re doing rental rolls,” Fields said, warning that without it “the bottleneck will always be the issue, and then we go back towards encampments.”
Councilman J.P. Morell said the department has not spent current-year allocations, noting roughly $4.8 million had been paid out of $9.8 million, leaving some breathing room.
Council members said that underspending is part of why the administration trimmed the 2026 request, adding that non–general fund sources could be tapped if the department meets targets and needs emerge later in the year.
The department cautioned that the proposed reduction would leave “no more shelter space because we will no longer be able to move people from the shelter into housing,” predicting encampments would re-form in high-traffic areas and strain public safety resources.
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The department listed current contracts with Clutch, a consultant that has analyzed the city’s homelessness response system; Low Barrier Shelter, a space in the former Veterans Affairs building that houses the chronically homeless; and United Way.
The department suggested pursuing a grant writer, tourism-related revenue, and assistance from the state, noting that more than 25% of shelter residents are from outside Orleans Parish.