A homeless shelter is suing the Trump administration to stop cutting federal funding
The Los Angeles Homeless Services Authority is suing the Trump administration on Monday to block it from stripping the county of hundreds of millions of dollars in funding, saying the effort is inappropriate and violates federal law.
The authority said at its headquarters on Monday that the cutoff would put more than 11,000 people – 1,900 of them children – at risk of losing housing or other services.
LAHSA, the city’s federal agency controlled by political appointees, is seeking a temporary injunction to prevent the Department of Housing and Urban Development from freezing the funds.
“The people who will be hurt by this decision are not the officers,” said Gita O’Neill, LAHSA’s chief executive officer in a statement. “It’s families, veterans, seniors, and formerly homeless Angelenos who rely on these resources to stay afloat.”
Asked about the lawsuit, a HUD spokesperson said the agency stands by its effort to “fix America’s failed homelessness system, which relies entirely on keeping people homeless permanently at enormous taxpayer expense while ignoring the root causes.”
“As one of the worst abusers of taxpayer dollars, LAHSA’s systematic and repeated failures will no longer be tolerated,” the spokesperson said in an email. “HUD will fund outcomes, not just the status quo.”
The federal court filing comes nearly three weeks after HUD officials said they were suspending LAHSA from applying for or accepting federal funds, citing financial mismanagement, fraud and a lack of conflict-of-interest safeguards.
In its 46-page lawsuit, LAHSA rejected HUD’s allegations, saying they were not supported by evidence. LAHSA advocates have portrayed HUD’s actions as part of a larger political agenda – the elimination of the state-mandated “Continuum of Care” program, which makes LAHSA the largest applicant for federal funding for the homeless throughout Los Angeles County.
The Trump administration “has made it clear that it wants to eliminate the program entirely in favor of a homelessness policy that favors criminal enforcement, drug enforcement, institutionalization and community commitment for the mentally ill,” the lawsuit said.
HUD officials said they are barring LAHSA from applying for funds on behalf of Continuum of Care, which includes 85 cities, including Los Angeles. LAHSA received $220 million in federal funds for various agencies in 2024 and $944 million through 2021, according to a June 11 letter from HUD Deputy Secretary Andrew D. Hughes.
In the letter, Hughes said his agency received information that LAHSA “may have violated federal law” while fulfilling its obligations as part of its HUD grant agreements.
“HUD has evidence that LAHSA’s repeated false statements and its actions of unaccountability and failure, including its lack of financial management, internal controls, and safeguards against conflicts of interest, pose a threat to HUD, the public, and those who live on the streets of Los Angeles,” he wrote.
In the letter, Hughes also said that HUD’s inspector general has opened an investigation. Depending on the outcome, the money may be returned or LAHSA may be permanently banned from receiving funds.
LAHSA, in its lawsuit, said HUD did not provide any investigative findings to show violations of financial agreements. Instead, the center’s lawyers say, government officials are relying on “a combination of old news articles, comments from government officials taken out of context, and findings from public audits that include recommendations that are all done fairly.”
Lawyers for LAHSA argue that HUD’s actions violate the US Constitution and override orders of Congress, which established many of the agency’s procedures for distributing funds to the homeless.
Most of the federal funds received by LAHSA as a grant applicant go toward permanent housing, agency officials said.
LAHSA, created in 1993, is overseen by a 10-member commission, half from the city and half from the county. Among those commissioners is LA Mayor Karen Bass, who has made homelessness part of her agenda. Each of the five regional governors has a nominee.
At stake in the battle between HUD and LAHSA is an array of services that affect some of the state’s most vulnerable citizens.
LAHSA oversees the Homeless Management Information System, a federally mandated software that tracks homeless people across the state. It has 8,000 unique users and is used by more than 300 agencies, according to the lawsuit.
HUD’s plan to freeze funding would prevent LAHSA from using the program to match Angelenos — those on the streets and in shelters — with housing and services, the lawsuit said.
LAHSA also oversees an annual count of the “time” of homelessness across the country. Agency officials pointed to the results of those statistics as evidence that they have been on track, with homelessness falling 4.3% nationwide and 5.5% in Los Angeles between 2023 and 2025.
Unsheltered homelessness, which measures people living outside or in their cars, fell by a large amount, down 14% statewide and 17.5% in LA during that time.
Despite those numbers, LAHSA’s reputation has been tarnished by the most critical assessment.
Last year, a global consulting firm retained as part of a federal lawsuit over the city of LA’s response to homelessness found that the homeless services provided by LAHSA and the city lacked adequate financial controls, leaving the program vulnerable to corruption and fraud.
A few months earlier, county auditors identified lax accounting practices that caused LAHSA to fail to pay its contractors on time. Even after that report was released, non-profit groups with LAHSA contracts continued to report that payments were behind schedule.
Last year, the County Board of Supervisors reached a crisis point, pulling more than $300 million — the bulk of its funding — from LAHSA and building its own homeless department. City officials have taken similar action in recent months.
