20 States Sue The Trump Admin To Stop Homeless Funding Cuts
20 States Sue The Trump Administration To Stop Cut To Homeless Funding
A sweeping coalition of 20 states and the District of Columbia has joined together to file lawsuits against the Trump Administration’s Department of Housing and Urban Development (HUD), in an attempt to block drastic changes to federal homeless funding that state officials say would trigger a nationwide humanitarian crisis.
The legal action, led by New York Attorney General Letitia James and filed in multiple federal courts, argues that HUD’s abrupt overhaul of the Continuum of Care (CoC) program is unlawful, discriminatory, and will represent an unprecedented and politically motivated attack on permanent housing programs.
“Instead of investing in programs that help people stay safe and housed, the Trump Administration has embraced policies that risk trapping people in poverty and punishing them for being poor,” the states said in the lawsuit.
The changes slash the portion of CoC funds that can be used for long-term housing from roughly 90% down to just 30%, redirecting most resources to temporary transitional housing with work or service requirements to qualify.
“Communities across the country depend on Continuum of Care funds to provide housing and other resources to our most vulnerable neighbors,” Attorney James said in a press release. “These funds help keep tens of thousands of people from sleeping on the streets every night. I will not allow this administration to cut off these funds and put vital housing and support services at risk.”
HUD Secretary Scott Turner has argued that the policy change is a necessary shift from what the Trump administration considers to be a failed “housing first” model that prioritizes permanent housing without preconditions, such as getting a job or seeking treatment. The agency has said the current policy has fueled a “homeless industrial complex” and does not address the root causes of homelessness.
“What we’ve done is take this Biden-era slush fund, called the Continuum of Care, and turned it into not just housing, but also treatment and transitional housing,” Turner said last week during an appearance on Fox Business.
Created under the McKinney-Vento Homeless Assistance Act and expanded in 2009, the CoC program has long partnered with states, local governments, and nonprofits to rehouse people experiencing homelessness. For years, the program followed a “Housing First” approach for participants, prioritizing stable, permanent housing before requiring employment, treatment, or other conditions.
The Trump administration’s new rules reverse that foundation entirely, framing the shift as a needed correction to what Turner called a “failed Housing First model” that allegedly enables dependence on government assistance.
However, the lawsuit states the changes are “unlawful and unconstitutional,” accusing HUD of attempting to impose new ideological conditions on funds Congress explicitly mandated be distributed based on need. The plaintiffs argue that the cuts disproportionately undermine permanent housing efforts that have successfully sheltered vulnerable populations for decades.
“Individually, these conditions are unlawful and harmful,” the suit claims. “Together, they are a virtual death blow to the CoC Program as it has operated for decades and will lead to predictably disastrous results.”
The lawsuits also accuse HUD of discrimination, citing provisions that allow the agency to deny funding to organizations that acknowledge transgender or nonbinary individuals. That condition, plaintiffs argue, violates civil rights protections and punishes communities whose inclusion policies differ from the Trump Administration’s priorities.
“These funds help keep tens of thousands of people from sleeping on the streets every night,” James added. “I will not allow this administration to cut off these funds and put vital housing and support services at risk.”
Additionally, the states claim HUD violated the Administrative Procedure Act by implementing sweeping policy changes without proper notice-and-comment rule-making or providing reasoned justification.
HUD disputes the allegations, saying in a statement that it “stands by its FY2025 Continuum of Care reforms” and accused states of “misusing the courts” to delay nearly $4 billion in aid. The department promised a “vigorous defense” of its actions.
“HUD is dismayed that the plaintiffs have chosen to misuse the Courts and pursue this delaying tactic to serve their own personal political agenda at the expense of the homeless individuals, youth and families now living on our Nation’s streets. Their use of the courts for political means seeks to prevent nearly $4 billion of aid to flow nationwide to assist those in need. HUD intends to mount a vigorous defense to this meritless legal action.”
The stakes of the litigation are immense. Internal HUD documents previously obtained by Politico warn that the cuts could force an estimated 170,000 people out of permanent housing and back into homelessness. For states already grappling with soaring rental costs and limited shelter capacity, the financial strain could be catastrophic.
Major cities, including Boston, San Francisco, and Santa Clara, filed similar lawsuits earlier this year after their CoC funds were threatened. A federal judge blocked those restrictions, and oral arguments are expected early next year.
The new multi-state case has been assigned to Judge Mary S. McElroy in Rhode Island, a Trump appointee who has previously blocked other federal funding freezes. Plaintiffs are seeking an immediate injunction to prevent the cuts from taking effect before 2026 grant renewals, warning that even short delays could collapse shelter systems already stretched thin.
As noted by Reuters, HUD has also barred grant recipients from using the funding for activities that promote diversity, equity, and inclusion, elective abortions, or “gender ideology,” or interfere with the administration’s immigration enforcement agenda.
With homelessness surging nationwide, the outcome of this case will shape not only housing policy but the lives of hundreds of thousands of Americans relying on the program’s support to survive.
SEE ALSO:
Low-Income Families Face Homelessness Under Proposed HUD Changes
Trump’s HUD Is Undermining Housing Discrimination Cases
Is Scott Turner Ready To Lead HUD?
