Attorney General James Sues Trump Administration to Protect Billions of Dollars to Fight Homelessness

NEW YORK – New York Attorney General Letitia James today led a coalition of 18 other attorneys general and the governors of Kentucky and Pennsylvania in suing the Trump administration to protect billions of dollars in grants from the Department of Housing and Urban Development (HUD) that provide housing and other critical services to help fight homelessness. The administration has recently introduced new restrictions that would slash funding for crucial initiatives that are part of HUD’s Continuum of Care (CoC) program. This program delivers funding to local and regional coalitions that provide housing and services for individuals and families experiencing homelessness, particularly those most vulnerable to homelessness such as veterans and those with disabilities. Attorney General James and the coalition argue that the administration’s actions threaten billions of dollars, illegally target those providing services to the LGBTQ community, and would unlawfully punish communities that do not share the administration’s policy priorities. Attorney General James and the coalition are seeking a court order blocking the administration’s cuts and illegal new conditions on CoC funds.

“Communities across the country depend on Continuum of Care funds to provide housing and other resources to our most vulnerable neighbors,” said Attorney General James. “These funds help keep tens of thousands of people from sleeping on the streets every night. I will not allow this administration to cut off these funds and put vital housing and support services at risk.” 

In 1987, Congress created CoC to provide states, local governments, nonprofits, and other groups with resources to deliver housing and support services for people experiencing homelessness, with a focus on veterans, families, and people with disabilities. For decades, CoC prioritized the “housing first” approach to fighting homelessness, providing immediate shelter to those in need without forcing them to meet burdensome requirements that can leave many without a safe place to sleep.

Permanent supportive housing has been highly effective at increasing housing stability and lowering costs associated with supporting people experiencing homelessness. Since its origin during the Reagan administration, the model has had bipartisan support across presidential administrations and Congress, and was HUD’s preferred method for addressing homelessness until the Trump administration’s change in policy. In addition to housing, CoC funds also provide support services such as childcare, job training, mental health and trauma counseling, and transportation services to assist people getting to and from work.

In November, the Trump administration imposed new and illegal conditions on CoC grants that threaten to upend the services the program supports. The administration imposed a cap on the amount of CoC funds that can support permanent housing for those in need, effectively ending the successful housing first model. Previously, up to 90 percent of CoC funds supported permanent housing, but under the new cap, no more than 30 percent can. If enacted, this cap could put an estimated 170,000 people at risk of losing their housing.

In addition, the administration barred CoC funds from organizations that acknowledge the existence of transgender or nonbinary individuals. As Attorney General James and the coalition argue in their lawsuit, the vagueness of this restriction could mean any organization that has provided shelter to transgender or nonbinary individuals, or even asked a participant’s gender identity, could be excluded from receiving CoC funds. The administration also imposed new conditions to withhold funds from regions that do not conform their local homelessness laws to the administration’s priorities – something nonprofits and other service providers cannot control.

In New York, 24 different regional CoC coalitions receive over $320 million to provide housing and other services throughout the state. 94 percent of these funds are dedicated to permanent housing, supporting 13,861 households statewide. The administration’s new cap on permanent housing spending would be devastating for New Yorkers, jeopardizing housing for over 9,000 households, including nearly 5,000 in New York City. Because many CoC program participants are tenants with leases, this loss of funding would eliminate rental assistance for thousands of vulnerable tenants, including many with mental health challenges. As a result, communities across the state could see thousands of evictions that would threaten to overwhelm shelters right as temperatures drop to dangerous levels.

The new CoC conditions also exclude programs that provide services for mental disabilities and prioritize those that only serve people with physical disabilities. As a result, services that help those struggling with mental health issues such as substance use disorder would lose critical funding. In New York, providers would face an impossible choice of needing to violate New York Human Rights Law, which prohibits discrimination on the basis of disability, by denying services to those with mental disabilities in order to receive CoC funds. 

Attorney General James and the coalition argue in their lawsuit that the administration’s new conditions on CoC funding are unlawful and unconstitutional. The administration cannot impose its own conditions on funds that Congress mandated should be distributed based solely on need. As a result, these new conditions violate the Administrative Procedure Act and Congress’ constitutional power to control spending. Attorney General James and the coalition are seeking a court order ruling the new funding conditions illegal and preventing them from being enforced.

“We know that taking a housing first approach is an effective way to address homelessness,” said New York City Mayor Eric Adams. “The Adams administration has delivered back-to-back supportive housing records for formerly homeless New Yorkers with over 2,700 supportive housing units being produced in 2024 alone. Much of this housing is managed by the very providers who have relied on federal Continuum of Care funding for decades and who do incredible work in our communities every day. We must all work together to ensure that we tackle the problem of homelessness head-on and invest in solutions that work and uplift working people. New York City is proud to be part of this coalition to fight for every last dollar New Yorkers deserve.”

“We are deeply grateful to Attorney General James for leading this important legal challenge to HUD’s newly imposed restrictions and funding cuts to Continuum of Care permanent housing,” said Pascale Leone, Executive Director of Supportive Housing Network of NY. “Her swift action offers a lifeline to thousands of New Yorkers whose homes were put at risk by the recent HUD FY2025 CoC Notice of Funding Opportunity. Nearly 14,000 affordable and supportive homes statewide rely on this funding; without it, the stability that so many have fought to build could unravel overnight. Supportive housing has enabled thousands of people to rebuild their lives with dignity, safety, and hope. A $326 million loss to CoC permanent housing programs would jeopardize that progress and threaten the very homes that make recovery possible. As families prepare for the holiday season, they should not have to question whether they will still have a place to live when winter arrives. This legal challenge is a crucial step toward safeguarding their homes and their futures.”

“The Trump administration’s proposed changes to HUD’s Continuum of Care funding threaten the health and stability of thousands of New Yorkers,” said Acting Commissioner of New York City's Department of Housing Preservation and Development Ahmed Tigani. “Permanent housing paired with supportive services has repeatedly proven to reduce homelessness, strengthen stability, and improve long-term outcomes. New York City is standing with New York State Attorney General Tish James and partners nationwide to oppose these harmful changes and to protect the tools we need to ensure every New Yorker has a safe, affordable place to call home.” 

“We commend Attorney General James for taking urgent action to challenge these unprecedented federal restrictions which threaten to gut funding for thousands of permanent homes that provide lifesaving supports for formerly homeless New Yorkers,” said New York City Department of Social Services Commissioner Molly Wasow Park. “DSS is proud to join this coalition to fight for housing solutions that have been effective in combating homelessness and center the dignity, humanity, and struggle of marginalized and low-income communities that have been consistently failed by society at large. To willfully ignore the devastating impact of the affordability crisis and historic inequities by abruptly pulling the rug out from under vulnerable Americans is unconscionable, and we will use every tool at our disposal to protect the foundations of our city’s safety net.” 

“Housing is a cornerstone of health and a critical component of the New York City Health Department's focus on mental health and overdose prevention. In a city where affordable housing options are scarce, permanent supportive housing keeps New Yorkers housed and improves their health and well-being. Simply put, it works,” said New York City Department of Health and Mental Hygiene Acting Commissioner Dr. Michelle Morse. “The actions taken by U.S. Department of Housing and Urban Development changing grant requirements for longstanding programs undermines our goal of getting people off the streets and into housing. Reducing access to permanent supportive housing will increase homelessness and create a devastating ripple effect, leaving people who benefit from permanent supportive housing without a viable housing option. We will continue to monitor the situation and work with our sister agency partners to explore next steps. Together, we must keep people connected to resources that foster health, independence, and support their paths to recovery.”

Joining Attorney General James in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia, as well as the governors of Kentucky and Pennsylvania.