Overview
- Filed in federal court in Rhode Island, the case is led by New York Attorney General Letitia James with 19 other state attorneys general, two governors and Washington, D.C. as plaintiffs.
- HUD’s November funding notice caps Continuum of Care spending on permanent supportive housing at 30% from roughly 90% previously and redirects money to transitional housing, competitive awards and programs with work or treatment conditions.
- The complaint says new conditions unlawfully target LGBTQ people and other groups by penalizing applicants over gender-identity policies, diversity initiatives and harm-reduction practices, and by favoring jurisdictions that enforce camping bans.
- Plaintiffs and housing groups warn the policy could jeopardize housing for about 170,000 people in CoC-funded permanent housing programs, with some grants expiring early next year under a compressed application timeline.
- HUD defends the changes as restoring accountability and promoting self-sufficiency by shifting focus from Housing First to transitional models and by increasing competition for awards, while Congress continues to negotiate FY2026 HUD funding levels.