A federal judge has intervened to prevent modifications to homeless funding criteria established by the U.S. Department of Housing and Urban Development. This action followed legal objections from multiple states, which contended that the alterations would lead to significant administrative disruption and potentially displace numerous individuals from housing.
On December 19, U.S. District Judge Mary McElroy in Providence, Rhode Island, granted an injunction and indicated that a written opinion would be provided the following week.
Judge McElroy directed HUD to handle applications according to the terms that were in effect before the November revisions, stating that the agency's adjustments to funding stipulations and timelines had "exacerbated" harm.
"Ensuring lawful agency action and continuity of housing and stability for vulnerable populations is clearly in the public interest," McElroy remarked during the December 19 hearing.
In November, Washington, along with states such as New York and Rhode Island, initiated a lawsuit challenging HUD's modifications. They argued that the new funding conditions were unlawful, would penalize housing providers acknowledging gender identity and diversity, imposed additional requirements on residents, and included illegal penalties for providers in areas without strict anti-homeless laws, disadvantaging programs for mental disabilities and substance use disorders.
"Those conditions go against HUD's previous guidance and were not authorized by Congress," stated Brown's office regarding the decision. "The program notice was also issued well after HUD's congressionally mandated deadline for making program changes, virtually guaranteeing gaps in funding."
In response to the ruling, a HUD spokesperson stated that the agency "remains committed to program reforms intended to assist our nation's most vulnerable citizens and will continue to do so in accordance with the law," as reported by Reuters.
Service providers and advocates expressed concerns about the future of homeless and housing programs following HUD's last-minute changes to funding requirements.
In November, HUD introduced funding requirements that marked a significant departure from long-standing priorities and principles. After opposition from states, local governments, and nonprofits, HUD completely withdrew its application, leaving uncertainty about the availability of federal funding.
"The cruelty of the sudden change in policy can't be overstated," said Rob Huff, spokesperson for the Tacoma-Pierce County Coalition to End Homelessness.
HUD's Continuum of Care Program is the primary federal funding source for homeless services, offering grants for housing and support to communities, with a focus on rapid rehousing, permanent supportive housing, and services for domestic-violence victims.
HUD allocates funds to coalitions that coordinate housing and services for homeless families and individuals, known as Continuums of Care. Over 400 such organizations nationwide compete for billions in grant funding.
From 2021 to 2023, Pierce County's CoC received over $13 million from HUD to support permanent supportive housing, rapid rehousing, rental assistance, and other programs aimed at addressing homelessness.
According to Pierce County Human Service spokesperson Kari Moore, 77% of CoC funding in the last five years has been used for permanent supportive housing. Since 2020, Pierce County has received about $22.7 million in CoC awards, with $17.4 million spent on Permanent Supportive Housing.
Revised HUD Guidelines
In November, shortly before the CoC funding application deadline, HUD announced new requirements and priorities that differed significantly from previous years.
According to Pierce County's CoC, these requirements included:
- A 30% cap on funding for permanent supportive housing
- Removal of priority for specific racial demographics in housing
- A mandate for service providers to collaborate with law enforcement, with law enforcement representation on CoC boards
- Increased focus on transitional housing and supportive services
- Elimination of provisions for serving individuals with substance use disorder, HIV/AIDS, chronic health conditions, or mental health diagnoses
Michael Yoder, executive director of Associated Ministries and a member of Pierce County's CoC board, commented on the changes.
"They tried to upend the system with late notice," Yoder stated.
He noted that HUD funding through the CoC is a key source for permanent supportive housing, and the 30% cap endangered existing housing.
Huff highlighted the importance of permanent supportive housing for individuals with disabilities who cannot live independently, noting that supportive housing has been a HUD priority for CoC funding for decades.
Legal Action by Coalition
On December 1, a coalition of nonprofits and county governments, including King County, filed a lawsuit seeking injunctive relief against HUD in response to the funding requirements.
"After more than a decade of prioritizing evidence-based approaches that reduce homelessness, as the complaint explains, the new Notice of Funding Opportunity for FY 2025 upends the stability of the program required by law, will have devastating impacts for plaintiffs, and cause hundreds of thousands of children, youth, adults, and families to become homeless," read a coalition statement.
The plaintiffs argued that HUD's changes were drastic, altering project eligibility, awardee criteria, and grantee conditions.
U.S. Department of Justice attorneys defended HUD's changes, stating they reflect the administration's new priorities and that CoC funding application requirements are within HUD's discretion to modify.
In July, President Trump signed an executive order indicating a shift in addressing the homelessness crisis, which homeless advocates criticized as "abhorrent" and undermining best practices like community-based behavioral healthcare and the housing-first approach.
Following the December legal complaint, HUD rescinded its funding application, according to county officials.
"HUD has not said when they would reissue a NOFO; nor have they indicated whether it would be the same as the last one or something new," said Cynthia Stewart, chair of Pierce County's CoC board, on December 16. "My guess is that they will wait until after Friday's court hearing and make some judgment then — or they will just wait longer."
Stewart explained that the situation has placed CoCs in a dilemma, unsure whether to prepare applications for the January deadline or wait for new HUD information.
"We have no idea," she said. "The last NOFO, the one that caused all the chaos and was then rescinded, was entirely different in priorities as well as terms and conditions from prior ones."
Huff noted that CoC funding application terms are typically set in August, allowing months for preparation. He expressed concern that service contracts might lapse before resolution, risking homelessness for individuals and families.
Stewart predicted two possible outcomes: previously funded programs might lose support, potentially leaving people homeless, or HUD's desired programs might not align with community needs, resulting in lost funding opportunities.
Advocates like Stewart worry that state and local funding may be insufficient if federal support is unavailable.
"We are very concerned about losing programs if HUD persists in changing their priorities all of a sudden," Stewart stated before the court decision. "Or if they don't reissue a NOFO."
