Funding cliff looms for Bend’s homeless shelters as state support drops from $10 million to $5 million, potentially closing hundreds of beds.

Homeless shelter providers in Central Oregon are facing a significant challenge as they look towards the future. The prospect of hundreds of beds closing by next year looms large due to a steep decline in state and federal funding, which local officials previously relied upon to help manage the homelessness crisis.
This situation represents a funding “cliff” identified by local governments as they grapple with budget constraints. Without additional financial support, the local shelter network anticipates cuts totaling millions of dollars. This financial downturn stems from the end of pandemic relief funds and broader state budget issues. While Bend and other Central Oregon localities have employed stopgap measures to delay the impact, leaders now confront the possibility of simultaneous funding cuts and the closure of a major encampment.
The timing is particularly coincidental and concerning. Funding for hundreds of shelter beds is expected to cease entirely the same day officials plan to close the region’s largest sanctioned encampment, currently housing approximately 200 people. Amy Fraley, the City of Bend’s senior program manager for homelessness services, described the potential impact as “devastating,” highlighting the fragility of the current system.
As a response to the uncertain funding landscape, Bend may explore using city-owned land to facilitate low-cost supportive housing as an alternative solution. This approach could help address the immediate bed shortage, though its effectiveness and feasibility remain to be determined. The city acknowledges the need to find sustainable funding or support mechanisms beyond the current sources.
The reduction in state funding is stark. Sources indicate that state money allocated for homeless shelters in Central Oregon is projected to drop from $10 million in 2027 to $5 million, a significant decrease. This trend is already observable, with funding falling from nearly $11 million during the fiscal year ending July 1st to the projected lower levels.
This funding shift is connected to recent state legislative changes. In 2025, the Oregon State Legislative Assembly established a new shelter funding model designed to sustain new beds created by Governor Tina Kotek’s emergency executive orders starting in 2023. This initiative, combined with federal pandemic relief and other state funding, contributed to the expansion of shelter capacity in Bend, adding 260 new beds according to Fraley.
While state and local leaders like Governor Kotek have cited Central Oregon’s investments as examples of successfully combating homelessness, referencing a nearly 20% reduction in homelessness numbers from recent Point-in-Time Counts, the long-term sustainability of these gains is now in question. The recent shelter expansions have occurred alongside an increase in homeless camp sweeps on government-owned lands.
The potential funding cliff underscores the need for sustainable solutions to housing insecurity. As providers face the possibility of reduced resources, the community’s responsibility to care for vulnerable neighbors, as image-bearers, remains a critical consideration.

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