Judge blocks HUD changes that would have left thousands without housing

A federal judge today ordered the U.S. Department of Housing and Urban Development (HUD) to preliminarily halt changes to its Continuum of Care grant program—the largest resource for federal homelessness assistance funding—after a coalition of states argued in court that the changes were illegal and would leave tens of thousands of people around the country without a place to live.

In her order orally granting a preliminary injunction, U.S. District Court Judge Mary McElroy barred HUD from implementing its proposed changes to the Continuum of Care program and directed HUD to process applications under the terms that existed prior to its unlawful program changes.

A coalition co-led by the attorneys general of Washington, New York, and Rhode Island sued HUD in November for illegally upending support for people experiencing housing insecurity or homelessness by abruptly rescinding a necessary program notice, replacing it with another that limited access to long-term housing and other services. The lawsuit says HUD drastically changed its Continuum of Care grant program in violation of congressional intent by sharply reducing funding for permanent housing and putting unlawful conditions on access to the funding.

The illegal conditions include penalizing housing providers that recognize gender identity and diversity, and mandating residents agree to additional conditions to obtain housing. HUD also added illegal conditions to punish providers in localities that do not enforce strict anti-homeless laws and disadvantage programs that address mental disabilities and substance use disorder. Those conditions go against HUD’s previous guidance and were not authorized by Congress. The program notice was also issued well after HUD’s congressionally mandated deadline for making program changes, virtually guaranteeing gaps in funding.

Washington receives about $120 million in these grants annually, with most of it going to the five counties with the greatest need for housing services—King, Pierce, Snohomish, Spokane, and Clark counties. The remaining $25 million is distributed by the state to Washington’s other 34 counties, which are largely rural.

“We’re in the middle of a housing crisis and HUD is trying to make it even worse,” Washington Attorney General Nick Brown said. “Permanent housing is lifesaving for people trying to gain stability after homelessness. I’m gratified the judge sided with us to protect this vital program.”

In their complaint, 20 attorneys general and two governors argued that HUD’s actions were arbitrary and capricious, as HUD made no effort to explain the abandonment of its own longstanding policies, failed to reckon with the obvious consequences of abruptly terminating funding for housing occupied by formerly homeless families and individuals, and violated the law by not following the timeline Congress set for this program and not receiving congressional authorization for these new conditions. The plaintiffs also argued HUD violated its own regulations by not engaging in rulemaking before issuing the changes.

Brown, New York Attorney General Letitia James, and Rhode Island Attorney General Peter Neronha are leading the lawsuit, which is joined by the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Vermont, Wisconsin, and the governors of Kentucky and Pennsylvania.

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