A federal judge in Rhode Island has temporarily halted the U.S. Department of Housing and Urban Development's proposed changes to its $4 billion homelessness programs. The ruling prevents what critics called a disruptive shift that could push thousands back onto the streets during winter. States, cities, and nonprofits argued the overhaul was unlawful and harmful.
U.S. District Judge Mary McElroy issued an oral ruling on Friday, granting a preliminary injunction against the Department of Housing and Urban Development (HUD). The decision stops the agency from imposing new conditions on homelessness funding, maintaining the previous formula for now.
The lawsuit, filed by a coalition of states, cities, and nonprofits including the National Alliance to End Homelessness, challenged HUD's November announcement of major changes. The overhaul aimed to reduce funding for permanent supportive housing and prioritize transitional housing requiring work, addiction treatment, or mental health services. It also proposed withholding funds from groups not aligning with the Trump administration's policies on diversity, equity, and inclusion (DEI), transgender rights, and immigration enforcement.
"Continuity of housing and stability for vulnerable populations is clearly in the public interest," McElroy said, agreeing that the changes would cause irreparable harm, especially in winter.
The National Alliance to End Homelessness stated the order provides "respite from the government's assault" for over 170,000 people, including families, seniors, veterans, and those with disabilities.
During a December 8 hearing, HUD withdrew its funding notice hours before proceedings, promising revisions. However, on Friday, the agency's attorney admitted the updated version would not be ready until day's end. McElroy criticized the timing as strategic, saying, "The constant churn and chaos seems to be the point."
HUD spokeswoman Kasey Lovett responded: "HUD will continue working to provide homelessness assistance funding to grantees nationwide. The Department remains committed to program reforms intended to assist our nation's most vulnerable citizens and will continue to do so in accordance with the law."
Advocates like Pam Johnson of Minnesota Community Action Partnership described the scramble: "Our agencies are just scrambling right now to try to respond. It also just reverses 40 years of bipartisan work on proven solutions to homelessness. So it's really, it's kind of shocking."
For decades, U.S. policy has emphasized permanent housing with optional support services, backed by research showing its effectiveness. Critics of the status quo, including HUD Secretary Scott Turner, argue it fails to address root causes like mental illness and addiction, calling prior approaches a "homeless industrial complex."
Local experts, such as Julie Embree of the Toledo Lucas County Homelessness Board, counter that poverty and lack of affordable housing are primary drivers. "One emergency room visit is just as expensive as a month of sustaining this [permanent housing] program," she said.
In Los Angeles, Stephanie Klasky-Gamer of LA Family Housing noted the need for transitional options but stressed they cannot replace long-term housing due to legal deed restrictions. The changes threaten financial jeopardy for providers and states that invested in permanent projects.
Bipartisan members of Congress have questioned the shift, with advocates urging more preparation time.
