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LOS ANGELES (CN) — The Los Angeles Homeless Services Authority sued the Trump administration Monday after the U.S. Department of Housing and Urban Development earlier this month suspended funding for the lead agency that administers funding for homeless services in the LA region.
The Homeless Services Authority said in its complaint filed in U.S. District Court for the Central District of California that HUD’s stated reasons for suspending funding, purportedly because of “waste, fraud and abuse,” are a pretext and that the Trump administration seeks to dismantle the regional Continuum of Care Program created by Congress that gives local authorities discretion over projects submitted for federal funding.
“Across five presidential administrations, including as recently as January 2025, bipartisan legislation has funded and reaffirmed the CoC Program’s regional approach,” the agency argues. “But the Trump administration has made clear it wants to scrap the program entirely in favor of a homelessness policy favoring criminal enforcement, drug treatment, institutionalization and civil commitment of the mentally ill.”
The Los Angeles Continuum of Care, led by LAHSA, has received nearly $1 billion in taxpayer dollars over the last five years, HUD said in its June 11 announcement that it was suspending funding. But despite receiving more federal homelessness funding than any other jurisdiction in the nation, the department said, LA remains the epicenter of the nation’s “drug-fueled homelessness crisis.”
“Under President Trump’s leadership, HUD will fund results, not corrupt failure or the homeless industrial complex,” HUD Secretary Scott Turner said. “Year after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability. Meanwhile, homelessness skyrocketed. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”
But while Turner claimed HUD investigated the Southern California agency and found “flagrant mismanagement,” Homeless Services Authority claims these findings rely on “a mash-up of old news articles, comments from public officials taken out of context and findings from routine public audits that included recommendations that were all appropriately actioned.”
LAHSA is the hub for federal, city and county funding for the unhoused in LA County. The federal funds it handles, according to the agency, directly support more than 11,000 people, generally in permanent housing. It also runs a massive IT system that registers and tracks all applicants for services and provides the annual reports that Congress and the state require to evaluate the effectiveness of relief.
LAHSA is also the single applicant for all federal funding for the region, working with local partners and stakeholders to coordinate the distribution of more than $200 million in federal funding.
The Homeless Services Authority claims HUD’s suspension of its funding violates the Administrative Procedure Act, the law that regulates how federal agencies can make and implement changes in regulations, and it seeks an injunction to stop the cutoff of federal funds.
Separately on Monday, a federal judge in Rhode Island sided with a coalition of states and a group of local governments and nonprofits in their challenges to HUD’s overhaul last year of its Notice of Funding Opportunity for the Continuum of Care programs that moved away from the previous focus on providing permanent housing for the homeless.
U.S. District Judge Mary McElroy, a Donald Trump appointee, agreed with the plaintiffs that HUD’s abrupt shift of the criteria for receiving funding was arbitrary and capricious, in violation of the Administrative Procedure Act.
“HUD failed to consider the impact that its decision to eliminate the Housing First approach would have on the existing system created by Congress and HUD itself,” she wrote. “Although HUD acknowledges the yearslong emphasis that it had placed on strengthening its commitment to public housing, it failed to substantively consider the impact that a rapid, untimely overhaul would have on the organizations that administer these programs and the individuals that rely upon them.”
McElroy, however, rejected the plaintiffs’ request for a permanent injunction against HUD changing its criteria for funding.
“This administration’s haphazard and cruel approach to housing policy left thousands of Washingtonians at risk of having nowhere to live," Washington Attorney General Nick Brown, one of co-leaders of the states that sued, said in a statement. “Now, thanks to the hard work of our team, they have stability and hope. This victory protects critical services that address our state’s housing crisis.”
Representatives of the U.S. Justice Department didn’t immediately respond to a request for comment on the two cases.
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