James City County Staff Explains Impact of Million Dollar Cut in Federal Housing Funds
Other County and nonprofit services for elderly and disabled residents will likely be diminished as well
At the July 22 James City County Board of Supervisors meeting, the County’s Director of Social Services Barbara Watson delivered a detailed presentation on the projected impacts of pending federal budget cuts. During the discussion, Watson warned that reductions in funds for housing and public assistance programs like Medicaid could severely strain the county’s social safety net and affect thousands of residents, particularly the elderly and disabled.
According to Watson’s presentation, the most significant local losses would be to the Housing Choice Voucher (HCV) and Mainstream Voucher (MSV) programs, which she said serve some of the county’s most vulnerable residents. Watson reported that about 80% of HCV participants are either elderly or disabled, and 100% of MSV voucher households include at least one person with a disability.
Cuts could lead to the following funding reductions:
Housing Choice Voucher (HAP) - Direct rental subsidies for low-income families, elderly, and disabled residents
Reduction: $832,386
Housing Choice Voucher (Admin) - Administrative support for managing the HCV program
Reduction: $71,000
Mainstream Voucher (HAP) - Rental assistance for non-elderly persons with disabilities
Reduction: $96,124
Mainstream Voucher (Admin) - Administrative funding for MSV program management
Reduction: $11,180
Family Self-Sufficiency (FSS) - Case management for voucher holders seeking economic independence
Reduction: $27,560
HUD Housing Counseling - Assistance for renters and homeowners navigating housing instability
Reduction: $27,669
Total Local Funding Cuts: $1,065,919
Additional impacts on County social services
Loss of case management support
Watson emphasized that a reduction in funding would not only reduce the number of people who can be helped but also limit the county's capacity to manage the program’s regulatory and service requirements. She stated that many of the programs are complex and require significant administrative funding to support the staff required to process applications, ensure compliance, and work with landlords and tenants to keep people housed.
Watson also addressed the local consequences of the loss of a federal grant of approximately $800,000 previously awarded to House of Mercy, a regional nonprofit. The grant had supported housing stabilization efforts and was crucial in delivering coordinated homeless services. During the meeting, one Board member confirmed the loss and said it had been reported directly by House of Mercy.
“Our biggest challenge that House of Mercy really assisted with was the case management,” Watson said. “None of the agencies and none of the jurisdictions really have enough staff to be able to do that case management to really help those folks with long-term success.”
She noted that without this support, transitioning individuals from temporary to stable housing becomes much more difficult, as providers no longer have adequate staff to coordinate services or follow up with clients.
Increased Medicaid administrative burdens
Beyond housing, Watson’s presentation highlighted the rising pressure on Social Services due to federal regulatory changes, especially around Medicaid eligibility. Under the proposed rules, recertification would be required every six months, rather than annually, and adults aged 19–54 would need to engage in 80 hours of work, education, or community service per month to maintain eligibility. Watson pointed to the impact of the changes. “Staff will have to track compliance on a monthly basis, and currently, our workers are carrying about 600 cases each.”
The Virginia Department of Social Services is reportedly reviewing ways to help local agencies absorb the extra workload, including exploring options for external support contracts, according to Watson.
Other major proposed federal program reductions include:
Community Development Block Grants (CDBG): Proposed for full elimination nationally ($3.3 billion)
HOME Investment Partnerships Program: Also proposed for elimination ($1.25 billion)
Homeless Assistance Program Consolidations: Subject to a 12% national cut ($532 million)
The Low Income Home Energy Assistance Program (LIHEAP), which served 853 households in James City County in FY24, faces non-renewal risks. This program is especially important for seniors who rely on it for cooling, heating, and crisis energy assistance.
Notably, Veterans Affairs Supportive Housing (VASH) vouchers will not be affected, Watson confirmed.
County Administrator Scott Stevens acknowledged the severity of the pending changes and said the county would continue tracking federal developments. “Much of the guidance on funding changes and program administration comes late, which complicates planning,” Stevens said.
Watson stressed the importance of coordination and adaptability: “It’s going to take collaboration across county agencies, nonprofit partners, and the state to keep services available and accessible to residents who rely on them.”
Concerns shared by local non profits
The county’s concerns are echoed in surveys conducted earlier this year by the Williamsburg Community Foundation and United Way of the Virginia Peninsula. In a March 2025 snapshot survey of local nonprofits, 51% said they expected to reduce services, and 20% anticipated cutting programs entirely within the next year.
A follow-up study by the United Way in March and April 2025, which included conversations with nonprofit leaders, found that agencies are contending with rising insurance and staffing costs, greater need for services, and increased administrative hurdles. Some of the comments shared in the report include:
Victims may not have access to 24/7 crisis intervention, shelter, and support. Counseling for youth, transitional housing, transportation, and prevention will be eliminated. (They have already started) closing offices, transitional housing, and rental assistance.
They will go without critical support for healthy child development.
…the people we serve would likely be negatively impacted, particularly those who depend on us for delivering food pantry/food security.
Our biggest challenge will be filling the hole left from Medicaid reductions for our clients. We will do our best to serve the clients we are able to serve, but reduced funding means that we will have a substantially larger number of clients who will need services but will not have the means to pay for them, thus passing the burden on to our organization.
While we wouldn’t be directly impacted…partners would be, which would limit the diaper supply we receive monthly…if Medicaid is limited, families who have been receiving diapers from Medicaid would look to us to supplement this essential need.
A Williamsburg Independent contributor produced this post with AI tools and these primary sources:
Video - James City County Board of Supervisors Business Meeting - July 22, 2025
Agenda - James City County Board of Supervisors Business Meeting - July 22, 2025