Trump loses again in attempt to overhaul homeless funding

from Marissa KendallCalMatters

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California scored another victory against the Trump administration in their battle over how to deal with the homelessness crisis here and across the country.

A federal judge this week taken down the federal Department of Housing and Urban Development’s attempt in 2025 to divert money from permanent housing and instead fund temporary shelters and programs that require sobriety. But the judge did not bar the Trump administration from making similar changes in the future.

“The federal court’s decision to reject the Trump-Vance administration’s attempt to disrupt essential housing services for people experiencing homelessness, including families, seniors, veterans and people with disabilities, is both timely and fair,” wrote Renee Willis, CEO of the National Low Income Housing Coalition, in a news release.

In November, the Department of Housing and Urban Development said that jurisdictions applying for about $4 billion in federal Continuum of Care funding could not spend more than 30 percent of it on permanent housing, a move that would significantly reduce the type of long-term housing that has for years been a cornerstone in the fight against homelessness.

Last year, California communities spent about 90 percent of their share of that money on permanent housing.

A group of states, including California, quickly filed suit. San Francisco, Santa Clara County and a group of national homeless nonprofits filed a separate lawsuit. In December, a federal judge in Rhode Island temporarily blocked the changes. In February, Congress ordered HUD to renew the 2025 grants under the old rules.

This week, U.S. District Judge Mary McElroy partially granted the plaintiffs’ motion for summary judgment in both cases. She ruled that the federal agency did not try to foresee the harm that its “headwind” shift from the country’s long-standing “housing first” model — which prioritizes getting people into housing without first forcing them to seek treatment — would do to the nation’s homeless.

“Overall, the actions taken by HUD in an attempt to hastily eliminate its housing approach serve as the hallmark of unwise decision-making,” McElroy wrote.

HUD did not immediately respond to a request for comment.

The decision ends both cases unless the Trump administration decides to appeal.

But the battle is not over. The Trump administration tried again last monthmoving to shift federal funding from 2026 away from permanent housing and the first housing framework. Housing attorneys tried to challenge this latest change in the previous lawsuit. The judge rejected that attempt, but welcomed the plaintiffs to file a new case.

Housing advocates said they are weighing their next steps.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.