A proposed change to billions of dollars in housing funds that left local shelters and agencies reeling has been paused by the Trump administration, but what’s next for shelters after the sudden backpedaling is not entirely clear.

The U.S. Department of Housing and Urban Development announced last month it would direct most of its $3.9 billion in grants in its Continuum of Care fund away from “housing first” programs and into transitional housing programs, prompting a multistate lawsuit led by New York.

On Monday, HUD announced it was withdrawing those plans “to make appropriate revisions.” In an amended complaint, the states suing said this “further chaos” does not nullify their claims, and called for the previous year’s plan to be restored.

If HUD moves forward with the proposed funding, Albany County Department of Social Services Commissioner Erin Stachewicz estimates her department next year could see around 350 households transitioned off of permanent supportive housing, or long-term housing aid for families where at least one person has a disability. Schenectady County is also anticipating a reduction in funding, a spokesperson said. Joseph’s House, which operates in Albany and Rensselaer counties and runs Rensselaer County’s only code blue shelter — a low-barrier entry shelter to house people in cold weather — would see a shift from 90% to 30% of federal funding going to permanent supportive housing, director Amy LaFountain said.

“We will definitely see a ripple effect,” she said. “We will definitely see more people homeless in the coming year.”

The now-deferred announcement marks a shift away from a housing-first model in the federal government. In a news release, HUD called the concept of providing permanent, unconditional housing a “failed … ideology” that “encourages dependence on endless government handouts while neglecting to address the root causes of homelessness.”

But Stachewicz said studies have found programs like permanent supportive housing to be successful.

LaFountain agreed. “The solution to homelessness is housing, good, safe, affordable housing,” she said.

LaFountain said she’s kept an eye on the HUD website as the agency posted it had withdrawn its notice of funding, before taking that down and then putting it back up. She said the next steps are submitting grant applications and making sure the shelter retains as much of its funding as possible.

“What I see as the biggest barrier is not being given enough time to plan,” she said. “If there were going to be major changes like this, that we’re given time to plan.”

That’s because Joseph’s House phased out its transitional housing after it was no longer deemed a priority under previous administrations. Transitional housing is designed to last only 24 months, unlike the organization’s current model.

It’s hard to predict how many people will need to be housed this winter. Albany County is going off its count last year of 685. Joseph’s House, which will do a count in January of unsheltered individuals, saw its shelters reach capacity fairly quickly this year. LaFountain believes a number of factors, including increases in the cost of living, cuts to other federal resources and a snowy and chilly November and December, are to blame.

“I think it’s a combination of things,” she said. “One small thing can be the thing that puts somebody over the edge, to not have what they need to stay housed.”