More than twenty American states have launched a federal lawsuit against Donald Trump's administration, aiming to reverse billions in grant cuts to programmes combating homelessness that threaten to leave tens of thousands without shelter.
Legal Challenge Against "Illegal" Funding Conditions
The lawsuit, led by New York Attorney General Letitia James and Democratic officials from nineteen other states, requests a judge to block the administration's proposed reductions and new conditions on funding distributed through a long-standing anti-homelessness programme within the Department of Housing and Urban Development (HUD). The legal challenge argues the Continuum of Care programme, established over forty years ago, was thrown "into chaos" this month after the administration imposed what they label as "illegal" new funding requirements.
According to the complaint, these new conditions are "holding these funds and the people they help hostage." The suit alleges that Trump's HUD is now denying funds to organisations that support transgender and nonbinary Americans and is reversing long-standing support for the "housing first" philosophy, which prioritises providing stable housing as a primary solution.
Drastic Caps and Widespread Consequences
A central point of contention is a drastic new cap on how funds can be used. Under the new rules, only 30 percent of Continuum of Care funds can support permanent housing, a sharp decrease from the nearly 90 percent allowed under terms set to expire next year. The lawsuit warns that if this cap is implemented, approximately 170,000 Americans risk losing their housing.
Furthermore, the new stipulations for serving LGBT+ individuals are described as dangerously vague. The legal filing suggests that organisations which shelter trans and nonbinary people, or even those that simply ask for a person's gender identity, could be disqualified from receiving crucial federal funds.
The complaint also accuses HUD of discriminating against states and local governments that do not align with the Trump administration's agenda by "deducting points" from their funding applications.
Imminent Risk to Vulnerable Populations
The collective impact of these policies, the lawsuit states, "threaten to cancel thousands of existing projects, require providers to fundamentally reshape their programs on an impossible timeline, and essentially guarantee that tens of thousands of formerly homeless individuals and families will be evicted back into homelessness."
In a statement, New York Attorney General Letitia James emphasised the critical nature of the funding, stating, "Communities across the country depend on Continuum of Care funds to provide housing and other resources to our most vulnerable neighbours. These funds help keep tens of thousands of people from sleeping on the streets every night." She added, "I will not allow this administration to cut off these funds and put vital housing and support services at risk."
The legal action comes at a time when homelessness in the United States has reached a two-decade peak, according to 2024 federal data. This lawsuit highlights the profound national conflict over how to address the crisis, pitting the established "housing first" model against the administration's newer approach.
