New York Attorney General Letitia James has filed a lawsuit against the Trump administration, joined by 18 other attorneys general and the governors of Kentucky and Pennsylvania. The suit aims to prevent new restrictions from the Department of Housing and Urban Development (HUD) that would reduce funding for homelessness programs under HUD’s Continuum of Care (CoC) initiative.
The CoC program provides grants to local coalitions that deliver housing and support services for people experiencing homelessness, with a focus on vulnerable groups such as veterans and individuals with disabilities. The recent changes introduced by the administration include a cap limiting permanent housing spending to 30 percent of CoC funds, down from up to 90 percent previously allocated. According to estimates cited in the lawsuit, this change could result in approximately 170,000 people losing their housing.
Attorney General James stated, “Communities across the country depend on Continuum of Care funds to provide housing and other resources to our most vulnerable neighbors. These funds help keep tens of thousands of people from sleeping on the streets every night. I will not allow this administration to cut off these funds and put vital housing and support services at risk.”
The coalition argues that additional new conditions target organizations serving LGBTQ individuals by barring funding for those that acknowledge transgender or nonbinary people. The vagueness of this restriction could exclude any group providing shelter or even asking about gender identity from receiving CoC grants. There are also concerns over requirements tying funding eligibility to local law compliance with federal priorities—criteria beyond many service providers’ control.
In New York State alone, 24 regional CoC coalitions receive more than $320 million annually, with 94 percent supporting permanent housing for nearly 14,000 households statewide. Under the new rules, over 9,000 households—including almost 5,000 in New York City—could lose their homes if funding is reduced.
The revised conditions further prioritize physical disabilities over mental health needs for service eligibility. Providers may be forced into violating state anti-discrimination laws if they deny services based on mental disability status in order to maintain federal funding.
Attorney General James contends that these policy changes are unlawful because Congress directed CoC funds be distributed based solely on need; she argues that imposing additional administrative restrictions violates both the Administrative Procedure Act and constitutional limits on executive power over congressional appropriations.
Other officials echoed these concerns:
“We know that taking a housing first approach is an effective way to address homelessness,” said New York City Mayor Eric Adams. “The Adams administration has delivered back-to-back supportive housing records for formerly homeless New Yorkers with over 2,700 supportive housing units being produced in 2024 alone. Much of this housing is managed by the very providers who have relied on federal Continuum of Care funding for decades and who do incredible work in our communities every day. We must all work together to ensure that we tackle the problem of homelessness head-on and invest in solutions that work and uplift working people. New York City is proud to be part of this coalition to fight for every last dollar New Yorkers deserve.”
Pascale Leone, Executive Director of Supportive Housing Network of NY added: “We are deeply grateful to Attorney General James for leading this important legal challenge to HUD’s newly imposed restrictions and funding cuts to Continuum of Care permanent housing… Her swift action offers a lifeline to thousands of New Yorkers whose homes were put at risk by the recent HUD FY2025 CoC Notice of Funding Opportunity… A $326 million loss to CoC permanent housing programs would jeopardize that progress and threaten the very homes that make recovery possible.”
Acting Commissioner Ahmed Tigani from NYC’s Department of Housing Preservation and Development commented: “Permanent housing paired with supportive services has repeatedly proven to reduce homelessness, strengthen stability, and improve long-term outcomes… New York City is standing with New York State Attorney General Tish James and partners nationwide…”
Molly Wasow Park from NYC Department of Social Services said: “We commend Attorney General James for taking urgent action… DSS is proud to join this coalition… To willfully ignore the devastating impact… by abruptly pulling the rug out from under vulnerable Americans is unconscionable…”
Dr. Michelle Morse from NYC Health Department noted: “Housing is a cornerstone of health… Permanent supportive housing keeps New Yorkers housed… Reducing access … will increase homelessness … We will continue … Together we must keep people connected…”
Joining Attorney General James are attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Oregon, Rhode Island, Vermont, Washington, Wisconsin; District of Columbia; as well as governors from Kentucky and Pennsylvania.
