A federal Judge on Thursday ordered the U.S. Department of Housing and Urban Development to restore funding for homelessness programs in Los Angeles County.
Judge David O. Carter ruled that HUD’s suspension of $240 million for the LA Homeless Services Authority and remedial measures against the Los Angeles Continuum of Care weeks before grant deadlines was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” under the Administrative Procedure Act.
The court sided with LAHSA’s argument that the Trump administration was attempting to bypass local planning and set funding priorities for the Los Angeles region violated clear legal requirements under the HEARTH Act, which intentionally places local homelessness strategy and prioritization in the hands of regional communities through the Continuum of Care system.
LAHSA and the LA CoC Board welcomed the decision to restore LAHSA’s financial standing and affirm the LA CoC’s authority.
“Today’s ruling protects our community’s ability to secure funding for housing and services that save lives,” Board Chair Ben Kay said in a statement. ”LA CoC has proven itself as a collaborative, functional part of the homelessness response system, which HUD has been trying to destabilize to further its own priorities. … The Court rejected those attempts and affirmed what the CoC has always believed: the people closest to this crisis are best equipped to solve it. Congress built this system so local communities — not Washington — would set these priorities. This is a win for the people of Los Angeles and for every person who depends on this system to stay housed.”
Los Angeles County District 5 Supervisor Kathryn Barger said the court ruling was “fair, measured and recognizes two realities that must be addressed simultaneously. First, we cannot abruptly disrupt funding that people currently experiencing homelessness depend on to remain housed and connected to critical services. Second, meaningful reform of our region’s homeless services system cannot be delayed.”
The partial injunction issued Thursday “strikes an appropriate balance by preserving short-term stability, respecting local coordination, and establishing a clear path toward accountability and meaningful structural change,” the supervisor’s statement continued.
“The court’s approach aligns with our county’s longstanding position that reform should be deliberate and responsible,” Barger added. “Change is necessary, but it must be implemented in a way that does not pull the rug out from under vulnerable individuals who depend on these services today.”
HUD officials did not immediately respond to a request for comment.
The ruling came six days after a separate federal court ruling in Rhode Island that similarly invalidated HUD’s nationwide notices of funding reductions. The Rhode Island court struck down Trump administration “attempts to unilaterally rewrite federal funding criteria, cut permanent housing grants and penalize local governments “adhering to evidence-based best practices,” according to LAHSA officials.
“By halting this abrupt suspension, the Court has ensured that life-saving housing and shelter programs remain operational without catastrophic disruption,” LAHSA Interim CEO Gita O’Neill said in a statement. “LAHSA remains fully focused on supporting our service providers and advancing transparent, accountable regional coordination.”
A statement from LAHSA Commission Chair Stephanie Graves said, “This ruling means Los Angeles can keep its promise to the more than 11,000 people — veterans, seniors, families with children — whose housing depends on these funds across 85 cities in our region. The ruling ensures the funds awarded to Los Angeles for the 2025 grant cycle will flow to providers, and that decisions for the 2026 NOFO will be made according to priorities set here, by the people who know our communities best.”
Graves said as her term at the helm of the commission begins, transparency and accountability are high priorities.
“I want to be direct with Angelenos: the court has called for transparency and accountability, and we intend to deliver both,” Graves said. “Every dollar will be tracked, accounted for, and put to work housing our neighbors. Los Angeles will make the most of this moment — and of every dollar entrusted to us.”
Key Outcomes of the court order that according to LAHSA officials will have immediate and long-term implications for the Los Angeles Continuum of Care:
- Release of fiscal year 2025 grants — HUD must immediately execute all pending grant agreements for approved 2025 awards, “ending administrative delays that have left local service providers without needed operating funds,” according to LAHSA.
- Restoration of regional CoC application authority — The ruling restored LAHSA as the “collaborative applicant” for fiscal year 2026, “enabling the LA CoC to submit its regional application and fairly compete for nationwide federal homelessness grants, in the event HUD issues a new (notice of funding availability) after its proposed 2026 application was invalidated last week by the ruling in Rhode Island,” officials said,
- Preservation of essential data systems — LAHSA will continue operating the region’s mandatory infrastructure, including the Homeless Management Information System, the Coordinated Entry System and the annual Point-in-Time Count.
- Regional solicitation for FY 2027 — To uphold ethical standards, transparency and compliance with federal regulations over the long term, the LA CoC immediately solicit applications for collaborative applicant, HMIS lead, CES administrator and PIT Count administrator for fiscal year 2027, officials said. The Continuum of Care will report on the agency’s evaluation of applicants to the court by Oct. 13.
“HUD’s decision to issue a sweeping, immediate suspension on the eve of critical funding deadlines was legally indefensible,” Keri Curtis Axel, LAHSA’s legal counsel, said in a statement. “As the Court noted, HUD cannot bypass explicit statutory rules passed by Congress, and pull the rug out from an entire metropolitan region without rational justification. We are pleased the Court held the agency accountable.”
CoC Legal Counsel Shayla Myers said in a statement, “By attempting to force a rushed direct-to-HUD application scheme that Congress never intended, HUD sought an unlawful workaround that risked leaving thousands of unhoused Angelenos without support. Coupled with their recent loss in federal court in Rhode Island, today’s order sends a clear message: HUD cannot unlawfully target proven local models or bypass statutory protections enacted by Congress, especially when doing so threatens to harm the thousands of people who rely on these systems for support.”
A status conference for the lawsuit is scheduled for Oct. 27 in downtown Los Angeles.
The funding of roughly $240 million annually to LA Continuum of Care that HUD suspended June 11 supports more than 140 service providers and 11,000 people experiencing homelessness, according to LAHSA.
HUD said the suspension followed negative audits and news reports going back more than 10 years.
HUD Secretary Scott Turner posted on X that the administration would “fight this legally,” adding that “The court ordered HUD to send tens of millions of dollars directly to LAHSA, an organization that has proven to be incompetent with YOUR tax dollars. The money that YOU worked hard to earn!”
According to LAHSA data from the 2026 Greater Los Angeles Homeless Count, the unhoused population reached 73,040 LA County residents, a 1.2% increase from 2025, and 45,194 people in the city of Los Angeles, a 3.4% increase.
