A significant portion of the Chicago Housing Authority’s budget is at stake in a new lawsuit the agency filed against the U.S. Department of Housing and Urban Development.
The CHA claims HUD is wrongfully attempting to withhold grant funding to local agencies like the CHA if they do not align with some of the federal government’s priorities on social issues.
“HUD is, for the first time, requiring Public Housing Authorities to certify that federal funds will not be used to fund or promote ‘diversity, equity and inclusion mandates, policies or programs,’ gender ideology; elective abortions; and immigration-related policies,” a Friday CHA press release states.
The lawsuit centers around a grant program known as Operating Subsidy Grants that the agency is expected to receive in December.
The deadline to apply is Oct. 21 and the CHA claims that HUD has not given clear instruction on the new guidelines. At stake is $185 million in funding, which would make up about 13 percent of the Chicago agency’s 2025-26 budget.
“The HUD certifications cite several recent Executive Orders but provide no additional information or clarification on these requirements beyond the language in the application,” according to the press release.
The CHA is also anticipating similar restrictions to future HUD allocations which could affect up to $1 billion in funding for the agency, which serves 135,000 Chicago residents. Local housing authorities typically get the majority of their funding from HUD.
The local agency is seeking a temporary restraining order.
“We are asking the court to step in and provide guidance on the lawfulness of the conditions HUD is seeking to impose,” said CHA Operating Chairman Matthew Brewer in the news release. “This intervention is a necessary last resort since our discussions with HUD have been limited due to the government shutdown.”
The press release also noted that a similar case is ongoing in Rhode Island and requests that a judge consider the outcome of that litigation, as well.
The lawsuit landed amid leadership flux and political crosswinds for the CHA. Brewer, a commercial litigation attorney and longtime CHA board commissioner, was appointed as the agency’s operating chairman in September after months of turbulence.
Mayor Brandon Johnson’s pick to lead the CHA, former 27th Ward Alderman Walter Burnett Jr., has been sidelined from assuming its CEO position, at least temporarily, since Brewer asked HUD to review Burnett’s potential conflicts of interest tied to his three decades as a Chicago City Council member and ownership of three properties rented by CHA voucher holders.
The leadership churn comes during heightened scrutiny of the CHA board due to revelations that one of its members, Debra Parker, has family members and a boyfriend with businesses that have scored nearly $22 million in contracts with the agency in recent years.