WA and other states sue HUD to block new changes to funding addressing homelessness

The U.S. Department of Housing and Urban Development (HUD) is attempting yet again to unlawfully cap funding for permanent housing projects, in a move that would result in nearly 3,000 Washingtonians losing their homes, Attorney General Nick Brown argued in a lawsuit on behalf of a multistate coalition filed in federal court today.

Just last month, the states won a separate case against HUD in federal court in Rhode Island regarding the agency's decision last year to impose illegal conditions on billions of dollars in funding for the Continuum of Care (CoC) program, which supports housing and other services for people experiencing housing instability or homelessness. Congress has prioritized stability in the way the funds are allocated, and the vast majority of CoC funds have traditionally supported permanent housing and other projects that have been shown to work.

On June 1, HUD sought again to re-implement a cap on funding for permanent housing and set other unlawful conditions on the funds. Without action by the court, HUD's actions mean CoC-funded permanent housing projects will lose funding or see it reduced, resulting in tens of thousands of people being evicted back to the streets, with states and local governments left to pick up the pieces.

"In every part of the state, I've talked to Washingtonians about housing concerns. HUD's abrupt changes to funding are disastrous and reduce housing stability for thousands of people in our state," Attorney General Nick Brown said. "The federal government's dramatic shift in policy will inevitably further the housing crisis in this country."

For more than two decades, HUD has embraced a commitment to permanent housing programs and the so-called Housing First model, which prioritizes rapid placement in permanent housing without requiring people to first meet conditions such as sobriety or a minimum income threshold.

But the current federal administration has rejected the commitment to the Housing First model and undermined the CoC program. First, HUD published notices of funding opportunities last year that set a 30% cap on CoC funding that were subsequently found unlawful.

Now, HUD has issued the June 1 notice of funding opportunity that creates a $1.3 billion set-aside for new projects prioritizing such things as transitional housing, which results in a de facto cap on permanent housing. That shift threatens housing for at least 97,000 residents of CoC-funded permanent housing across the country, and more than 2,900 in Washington state, according to the National Alliance to End Homelessness.

The states argue that HUD's actions violate the Administrative Procedure Act for, among other things, failing to proceed with notice-and-comment rulemaking and being arbitrary and capricious. They ask the court to declare that the challenged conditions are illegal and block HUD from implementing them.

Brown co-led the lawsuit with New York Attorney General Letitia James and Rhode Island Attorney General Peter Neronha. Joining them in filing the lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, the District of Columbia, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Vermont, Virginia, and Wisconsin, and the governors of Kentucky and Pennsylvania.

A copy of the complaint is available here.

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