States Defeat Trump in HUD Homelessness Funds Case

The states prevailed over Donald Trump’s administration in the tug-of-war over access to homelessness funds.

On Monday, U.S. District Judge Mary McElroy ruled that the Department of Housing and Urban Development violated federal law when it made changes to the Continuum of Care program, Bloomberg reported. The summary judgment, issued without a trial, allows HUD to pick the fight back up, as a permanent injunction was not granted.

McElroy said the rule changes around the program had the “hallmark of unreasoned decision making” and failed to “meaningfully forecast the harm caused by the disruption” of funding for the program, which provides states and municipalities with billions to rapidly place homeless individuals in housing.

HUD did not immediately respond to the publication’s request for comment.

A coalition of 20 states, led by New York Attorney General Letitia James, sued the Trump administration in November over policy changes to the program. The policy changes would have shifted more than half of the program’s funding from permanent housing assistance to temporary housing with work and service requirements. It also included conditions that could deny funding to organizations that acknowledge transgender and nonbinary individuals.

HUD had also imposed a cap on the amount of program funds that can support permanent housing. There used to not be a specific limit, prompting around 90 percent of funds to support permanent housing; no more than 30 percent of these funds can aid permanent housing under the cap. The funding cuts endangered the housing of 170,000 people, according to internal agency documents.

A quick court ruling blocked the attempt to overhaul the $4 billion program, leading HUD to appeal in December.

The agency has looked to pivot away from the long-standing “Housing First” model, which prioritizes placing people into permanent housing without preconditions such as employment or sobriety.

HUD officials under President Donald Trump argued the approach has failed to curb homelessness and say new rules would focus more heavily on “self-sufficiency.”

— Holden Walter-Warner