A coalition of 20 states and Washington, D.C., filed a federal lawsuit on Tuesday seeking to stop the Trump administration from implementing sweeping changes to a long-standing federal homelessness program, arguing the overhaul would unlawfully disrupt support for tens of thousands of vulnerable people.
The suit, brought in federal court in Rhode Island, challenges the Department of Housing and Urban Development’s revamp of the Continuum of Care (CoC) grant program, a multibillion-dollar funding stream that has backed permanent supportive housing and related services for decades.
Why It Matters
City officials and nonprofit housing providers have been sounding similar warnings in recent weeks, saying confusion over the new rules is already slowing contract negotiations and could force them to cut back or close essential programs. Leaders in several large cities say tighter limits on permanent housing funds could lead to more evictions and put extra pressure on emergency shelters as winter approaches.
What To Know
According to the complaint, HUD’s revised rules significantly restrict the share of grant money that can be used for permanent housing and shift more funding to transitional shelters and short-term initiatives. The states argue the agency acted “in violation of congressional intent” by imposing a cap on permanent housing dollars and layering on “unlawful conditions” that determine which local governments and service providers can qualify.
One of those disputed conditions is a requirement that local jurisdictions recognize only two genders, which the states say would punish communities that extend legal protections to transgender and nonbinary residents.
Newsweek has reached out to HUD via email on Tuesday afternoon for comment.
The lawsuit claims that the new funding criteria could endanger housing for more than 170,000 people across the country and destabilize programs that cities and states depend on to keep families, veterans and people with disabilities housed. Since its creation in 1987, the CoC program has largely followed a “housing first” philosophy, emphasizing rapid placement into permanent housing without requiring individuals to meet benchmarks like sobriety, employment or treatment participation beforehand.
State officials say the administration’s changes mark a sharp break from that model. Rhode Island Attorney General Peter Neronha criticized the shift, accusing the federal government of “punching down by targeting the most vulnerable Americans,” and warning that the cuts could deepen his state’s already severe homelessness crisis. New York Attorney General Letitia James, a co-leader of the coalition, argued that the administration lacks the authority to attach ideological conditions to grants that Congress intended to award based on demonstrated need.
The complaint contends that HUD’s actions violate the Administrative Procedure Act and the Constitution’s spending clause by tying federal funds to policy changes unrelated to housing need. The states further allege that the administration has not provided research or data showing that cutting back on permanent housing investments would produce better outcomes in addressing homelessness.
What Happens Next
The coalition is asking the court to halt the new rules while the case is litigated, arguing that allowing them to take effect would undermine a core component of the nation’s homelessness-response system.
