Minnesota’s Housing Stabilization Services (HHS), a program helping thousands of residents with disabilities and housing instability, is set to end Nov. 1 following a state fraud investigation. The decision has left advocates, service providers, and residents concerned about widespread housing insecurity and what comes next.
“This is going to cause more homelessness. We’re going backwards if the state follows through with canceling it,” said Matt Traynor, executive director of the Minnesota Coalition for the Homeless (MCH).
Launched in 2020 under Medicaid, HHS was designed to help eligible Minnesotans, primarily those with disabilities or experiencing housing insecurity, find and maintain stable housing. More than 20,000 Minnesotans received monthly support for rent, food, and supplemental services. By mid-2024, over 400 provider organizations statewide were billing for services.
DHS announced the program’s termination, citing unsustainable costs and the need to redesign it with tighter policies. The move follows an MPR News investigation reporting that some providers submitted fraudulent claims for clients who didn’t exist or were ineligible.
According to the investigation, the state’s Medicaid director said, “Investigators found cases of providers billing for thousands of hours of nonexistent work.” DHS Commissioner Jodi Harpstead told reporters that while “fraudulent actors must be held accountable, the agency faced an impossible situation balancing program integrity and continued access to services.”
“This is going to cause more homelessness. We’re going backwards if the state follows through with canceling it.”
Advocates warn that while trying to protect state funds, policymakers risk punishing the very people the program was designed to help. “Yes, we hate fraud and need to stop it, but the clients didn’t commit fraud. They’re the ones being punished,” Traynor said.
He also criticized the lack of transparency around the decision: “It’s hard to know who exactly made the decision to cancel this. There are confusing messages on whether it is a full-on cancellation.”
The termination threatens to destabilize housing support programs across the state. Moses, 41, who asked that we use only his first name, attended an HHS rally with his teenage son. He said, “If we don’t speak or vote, we give him what he wants, power without limits.” For Moses, civic engagement is part of the solution: “The only thing we can do is vote so someone can say no to him rather than yes. HHS isn’t just a program, it’s part of how people can maintain their stability.”
The HHS cancellation comes as the federal government shutdown enters its third week, further complicating assistance for vulnerable families. Kendra Krolik, chief strategy and advancement officer of the Community Action Partnership of Hennepin County (CAP-HC), described the combined challenges as a “storm of instability.”
“The longer the shutdown goes on, the longer families with low incomes will wait for assistance grants due to delays in federal funding,” Krolik said. The delay coincides with the start of the Cold Weather Rule and Energy Assistance season, when demand for help with rent, heat, and utilities spikes.
CAP-HC typically receives Low Income Home Energy Assistance Program (LIHEAP) funds in mid-November, but with the federal budget stalled, grants may not go out until Thanksgiving week.
CAP-HC is currently managing over 12,000 applications, 1,000 more than last year, but cannot issue assistance until funding arrives. “At best, families will stay afloat. At worst, they’ll fall irreparably behind,” Krolik said.
Traynor emphasized that the HHS termination will have ripple effects beyond individual recipients. “If you take away one billable service to a program already at risk, you’ll see not only fewer people housed, but also more people losing housing and overburdening shelters,” he said.
“Organizations serving similar populations may have to turn people away because they simply don’t have the capacity.”
Even if HHS is eventually restarted, advocates warn the gap could take months or years to recover from, leaving thousands at risk of losing housing. “That gap could mean everything,” Traynor said.
As Minnesota faces the end of Housing Stabilization Services, advocates and providers continue to push for clarity, transparency, and swift action to prevent further instability for the state’s most vulnerable residents.
Lizzy Nyoike is a Hubbard School of Journalism & Mass Communication student with interest in community stories, investigative and multimedia journalism.