Attorney General Bonta Files Lawsuit Against Trump Administration Over Funding Restrictions Expected to Worsen Homelessness Crisis

Asks court to declare the restrictions unlawful and stop them from taking effect

OAKLAND — California Attorney General Rob Bonta today joined a coalition of 19 attorneys general and two governors in suing the Trump Administration over funding restrictions it recently placed on the Continuum of Care (CoC) grant program. CoC is the federal government’s flagship program for funding affordable housing and other services for individuals at risk of and experiencing homelessness. Seeking to implement President Trump’s “Ending Crime and Disorder on America’s Streets” Executive Order, the U.S. Department of Housing and Urban Development (HUD) announced on November 13 that it would impose new restrictions on CoC funding. In a lawsuit filed in the U.S. District Court for the District of Rhode Island, the attorneys general argue that these restrictions are unlawful and would force tens of thousands formerly homeless individuals and their families back onto the street. The attorneys general are also filing a motion for a preliminary injunction because, among other things, they would experience irreparable harm if the restrictions remain in effect.

“Under both Democratic and Republican presidents, HUD’s Continuum of Care Program has helped states, local governments, and nonprofit organizations combat homelessness and provide safe, stable housing to our most vulnerable residents. This program has proven to be effective at getting Americans off the streets, yet the Trump Administration is now attempting to illegally slash its funding,” said Attorney General Bonta. “As a result, for the 47th time in 44 weeks, I’m taking President Trump to court. Those caring for our unhoused neighbors need the federal government’s continued support. Absent judicial intervention, the Trump Administration’s actions would only worsen the homelessness crisis.”

HUD’s new policies reverse the agency’s longstanding support for Housing First policies and fundamentally undermine the goal of providing dependable housing. Specifically, HUD’s new funding restrictions:

• Mandate that only 30 percent of CoC funds be used for permanent housing projects starting in 2026 — down from nearly 90 percent. Permanent housing projects are community-based initiatives designed to provide long-term, affordable housing to individuals and families experiencing homelessness. Permanent housing projects often provide supportive services to individuals with disabilities (including mental health and substance use issues) to allow them to live independently.
• Significantly change the point system used to award grants, which will threaten permanent housing and disadvantage services for people with mental disabilities and substance use disorders.
• Change the CoC funding competition rules to reduce Tier 1 funding from 90 percent to 30 percent. Tier 1 funding is essentially guaranteed funding for housing projects that satisfy certain requirements. This ensures stability for individuals and families living in CoC-funded housing or receiving CoC-funded services.
• Eliminate funding to applicants that acknowledge the existence of transgender and gender-diverse people.
• Discriminate against localities whose approach to homelessness differs from this Administration’s by deducting points for applicants if they happen to be located in jurisdictions that do not enforce certain policies this Administration favors, like bans on public camping. 

In the lawsuit, Attorney General Bonta and the coalition argue that the restrictions are illegal in numerous ways. The restrictions:

• Violate the Administrative Procedure Act because they are contrary to law, arbitrary and capricious, and failed to observe the notice-and-comment procedure required by HUD’s own rules.
• Constitute ultra vires agency action because the Trump Administration lacks the statutory authority to impose the restrictions. No provision of HUD’s authorizing statutes allows the agency to impose these terms, and the statutes authorizing HUD to administer specific grant programs also preclude their imposition.
• Violate the Separation of Powers, since none of the restrictions were imposed by Congress. The President cannot directly and unilaterally amend or cancel appropriations Congress has duly enacted, nor can he order federal agencies to do so.
• Violate the Spending Clause of the U.S. Constitution, which is vested in Congress — not the President.
• Violate the Tenth Amendment of the U.S. Constitution by requiring states to implement numerous policies favored by the Administration against their will, in order obtain federal funds.

States organize their own homelessness responses around the CoC program. California invests billions of dollars annually through programs including the Homeless Housing, Assistance, and Prevention Program, Homekey+, the Behavioral Health Services Act, CalAIM, and State Low-Income Housing Tax Credits. As part of this system, California provides funding to local governments, public housing authorities, and non-profits for housing, emergency shelter, and supportive services to reduce and end homelessness. California provides such funding to several CoC grantees, and some of which include state-funded capital or homeless services projects that leverage CoC-funded operating subsidies and services dollars to remain viable. 

In filing today’s lawsuit, Attorney General Bonta joins the attorneys general of Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the governors of Kentucky and Pennsylvania.