A coalition of officials from 20 states and the District of Columbia has filed a lawsuit against the Trump administration to halt new restrictions on a long‑running federal homelessness initiative. The suit, led by New York Attorney General Letitia James, targets policy changes to the Department of Housing and Urban Development’s Continuum of Care program that shift money away from “Housing First” providers.
On Tuesday, nineteen state attorneys general and two governors filed a lawsuit challenging the Trump administration’s move to significantly reshape the federal approach to homelessness.
Led by New York Democratic Attorney General Letitia James, the coalition includes Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, Wisconsin, the commonwealths of Kentucky and Pennsylvania, and the District of Columbia, according to the New York attorney general’s office and court filings. The lawsuit seeks to block new limits and conditions on funding for the U.S. Department of Housing and Urban Development’s (HUD) Continuum of Care (CoC) program, which awards grants to local and regional coalitions that provide housing and services for individuals and families experiencing homelessness.
Under the administration’s changes, HUD plans to sharply reduce the share of CoC funds that can go to permanent "Housing First" projects and redirect money toward transitional programs that require work, treatment, or other participation. Previously, roughly 90% of CoC funds supported permanent housing, but HUD has now capped that share at about 30%, according to public statements and internal estimates cited by state officials. Critics of the new policy say the shift could jeopardize housing for more than 170,000 people nationwide.
The reforms focus in particular on Housing First providers, which currently receive most CoC funding. These programs prioritize placing people in stable housing without preconditions such as sobriety, employment, or minimum income and then offering voluntary supportive services. The lawsuit argues that HUD is abandoning its long‑standing support for Housing First without proper public input and in violation of federal law, including the Administrative Procedure Act and limits on the executive branch’s authority over spending that Congress has appropriated.
“HUD has adopted new policies, without any meaningful public input, that reverse the agency’s longstanding support for Housing First policies and fundamentally undermine the goal of providing dependable housing,” the complaint states, according to reporting by The Daily Wire and statements from James’s office. It describes Housing First as a model that “provides stable housing to individuals without preconditions like sobriety or minimum income,” and notes that Congress, many experts, and until recently HUD itself have credited the approach with improving housing stability and health outcomes while lowering certain public costs. The suit contends that the new CoC rules “are unlawful several times over.”
Housing First was incorporated into federal homelessness policy under President George W. Bush and expanded substantially during the Obama administration. In 2010, the Obama White House and the U.S. Interagency Council on Homelessness unveiled a plan that aimed to make chronic homelessness rare and brief within a decade, in part by scaling up Housing First‑style permanent supportive housing.
Critics, however, argue that heavy reliance on Housing First has not achieved those goals and has, in some jurisdictions, coincided with worsening street homelessness. They say the approach does too little to address underlying issues such as economic instability, serious mental illness, and drug addiction. A 2022 report from the Cicero Institute, a public‑policy group that has urged states to revise their homelessness strategies, found that homelessness increased by nearly 25% in areas that rely exclusively on the Housing First model, a finding supporters of the strategy dispute and attribute in part to broader housing and economic pressures.
On Capitol Hill, Representative Andy Barr, a Kentucky Republican, has led efforts to scale back the federal government’s exclusive reliance on Housing First. Barr, who is running for the U.S. Senate seat currently held by retiring Republican Mitch McConnell, has repeatedly introduced the Housing Promotes Livelihood and Ultimate Success (Housing PLUS) Act, which would push HUD to direct more Continuum of Care dollars to providers that require or strongly integrate so‑called wraparound services such as addiction treatment, mental health care, and job training.
“Housing First prevents providers who require wraparound services from receiving federal funds to curb homelessness in our communities,” Barr said in a 2023 press release about the bill. “These wraparound services are oftentimes necessary to ensuring a person can safely and fully attain permanent housing on their own. We need to abandon HUD’s exclusive reliance on Housing First in favor of an all-hands-on deck approach to end homelessness in the United States.” His comments mirror concerns raised by many critics of the current federal strategy.
The new lawsuit asks a federal court to halt HUD’s changes before they take effect, arguing that the rules would unlawfully strip or condition more than $3 billion in grants and undermine local efforts to keep vulnerable residents housed during an ongoing housing affordability and homelessness crisis.
