After California lawsuits, Trump administration pauses plan to divert billions of dollars from homeless housing

"The Trump administration has temporarily paused plans to divert billions of dollars in homelessness spending away from permanent housing, a funding shift state officials warned could push tens of thousands of formerly homeless Californians back to the street. The administration had sought to redirect the money toward transitional housing and outreach efforts, prioritizing programs that impose work requirements, mandate addiction or mental health treatment and help police close encampments."

"The move came the same day as a court hearing on two lawsuits challenging the funding change: one from a coalition of 21 states, including California, and another from 11 local governments and nonprofits, including Santa Clara County. The U.S. Department of Housing and Urban Development offered few details about why it chose to rescind the notice of $3.9 billion in Continuum of Care funding, the primary source of federal homelessness dollars."

Federal housing officials withdrew a notice to apply for $3.9 billion in Continuum of Care funding, pausing a proposal to limit permanent housing spending to 30 percent and redirect funds to transitional housing, outreach, and programs with work or treatment mandates. The withdrawal coincided with court hearings on lawsuits from a coalition of states and local governments alleging the funding change lacked congressional authorization and evidentiary support. California currently uses about 87 percent of those funds for long-term housing and rental assistance, and officials warned the shift could displace many formerly homeless residents. HUD said it will assess issues raised and consider a revised funding notice.

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