HUD pauses controversial limits on spending of homelessness funding. Where things stand in LA

Facing legal challenges, the U.S. Department of Housing and Urban Development has withdrawn a policy that Los Angeles-area homelessness officials say would have caused thousands of people to lose their subsidized housing.

Most federal funding for homelessness programs flows into the L.A. region through HUD’s Continuum of Care grant competition program. Last month, HUD changed its funding rules, limiting how much local governments can spend on permanent housing to 30% of their award totals.

The region currently spends about 90% of its more than $200 million budget covering people’s rent, according to the Los Angeles Homeless Services Authority.

Why this matters

The HUD policy that was withdrawn Monday would have caused more than 5,000 households to lose their rental subsidies, officials said.

In recent weeks, California and other states sued HUD, claiming the new federal policies “guarantee that tens of thousands of formerly homeless individuals and families will be evicted back into homelessness.”

A U.S. district judge in Rhode Island was poised to consider an emergency request to block HUD’s controversial policy when the agency announced it would revoke it.

What's next

HUD authorities said they plan to issue a revised notice about the funding soon, according to a statement posted on the agency’s website.

LAHSA spokesperson Ahmad Chapman told LAist that the agency anticipates most of the HUD rule changes to remain in the revised notice. He also said LAHSA plans to keep moving forward with its funding application and reallocating more than $100 million away from permanent housing and toward other interventions. The submission deadline is Jan. 14.

“LAHSA will continue to monitor this situation closely and may extend or even cancel the process as circumstances warrant," Chapman said.

Sarah Mahin, director of L.A. County’s Department of Homeless Services and Housing, said the HUD policy would redirect funding from programs with proven track records and that have helped move people off the streets and into safe, permanent homes.

“We hope officials heed the warnings from countless homelessness and housing experts nationwide and continue to invest in what we know works: permanent housing accompanied by the supportive services that help people stay housed,” she said.