LA providers say federal funding delays ‘wreaking havoc’ in homeless services system

Several Los Angeles-area organizations that serve survivors of domestic violence and people experiencing homelessness say a legal dispute over federal homelessness funding is holding critical dollars hostage.

Groups, now forced to cover up to millions of dollars in annual grant agreements, are running out of reserves, cutting staffing and relying on private donations to keep people housed and services running.

The organizations have had contracts stalled for months in a legal back-and-forth between the Trump administration and the region’s top homeless services agency, which has some programs starving for money.

“If these contracts don't get executed, if HUD doesn't start to reimburse agencies quickly … we're going to see more suffering on the street,” said Myong Kim, chief program officer at the Downtown Women’s Center. “It's going to be more tangible and more visible.”

The U.S. Department of Housing and Urban Development told LAist it's not currently required to execute grant agreements after the Ninth Circuit Court of Appeals issued an emergency stay while it decides on HUD’s appeal in the coming weeks.

“HUD stands by its commitment and legal right not to continue supporting LAHSA, which even Judge [David O.] Carter and Mayor Karen Bass have acknowledged is an abject failure and riddled with fraud, waste, and abuse,” a spokesperson said in a statement.

The region's top homeless services agency, the Los Angeles Homeless Services Authority, told LAist that it’s not backing down and is actively pursuing legal remedies to force the federal government to honor its commitments.

“Frontline providers have kept lifesaving programs running for months without compensation,” spokesperson Chris Yee said in an email. “Releasing these federal funds is essential to maintaining their operations and protecting services for people who rely on these critical programs.”

Overall, HUD delays are expected to affect more than 50 local service providers, with the bulk of their renewal grants expiring in the next three months, according to LAHSA. Dozens of grants could be affected by the end of this year, totaling nearly $65 million.

A fight over who controls funding

The situation facing these providers is part of a broader delay with HUD's execution of FY2025 Continuum of Care grants, which has affected groups in other parts of the country, such as Ohio.

More than 1,300 of the FY2025 Continuum of Care renewal grant agreements — about one in five — had not been fully executed as of Monday, according to court documents reviewed by LAist. That includes more than 400 agreements that had not been issued by HUD.

But the L.A. grants are not just facing bureaucratic delays — they’ve become entangled in a fight over who controls the region’s federal homelessness funding.

HUD suspended LAHSA from federal grant activity this summer, and LAHSA sued. Some of the organizations’ leaders were hopeful a federal judge could clear the path for their contracts to be paid in August.

That’s when U.S. District Judge David O. Carter issued an order that, among other things, named a dozen service providers for which HUD has failed to execute grant agreements after getting award letters earlier this year. He wrote that the delays leave them without the funds they need to continue operating.

Carter ordered HUD to execute those signed agreements immediately. But about a month later, the order was paused by the Ninth Circuit.

“We expected HUD to immediately execute our grant agreements in compliance with Judge Carter's order,” said Jessica Reed, LAHSA’s director of Continuum of Care, during a LAHSA Commission committee meeting Wednesday. “Obviously, the appeal [by HUD] has continued to hold that up.”

LAist reached out to all 12 organizations named in the order, and several said they’re getting stuck in the middle of the legal dispute.

Groups in limbo for months

House of Ruth in Pomona, a roughly 50-year-old domestic violence agency that offers crisis, outreach, housing and legal services, has a roughly $286,000 grant tied up in the litigation, according to Pat Bell, CEO. The grant, which hasn’t been executed since April, pays for the organization’s transitional housing shelter.

Bell said LAHSA has told her an executed contract was unlikely to come anytime soon, forcing House of Ruth to float the funds in the meantime. The organization is now reducing staffing for its transitional shelter, including layoffs and cutting hours, according to Bell.

“We have six months of paychecks going out to the staff that are providing the transitional shelter services without any reimbursement,” Bell said.

House of Ruth is not an isolated example.

The Downtown Women’s Center based in Skid Row, which provides housing, employment and mental health services to survivors of violence experiencing homelessness, has been waiting on a $3.5 million annual contract since July, according to Kim, the chief program officer. The renewal contract supports rent payments for survivors of domestic violence, she said.

The Downtown Women’s Center has been covering about $150,000 a month in costs with private donations since then, but Kim noted that’s “not going to last forever.”

“In the midst of all the politics, and in the midst of all the back and forth, we really need to remember that these are individual lives — women, their children, their dependents — that are at risk and that are counting on us to move things forward,” Kim said.

‘Wreaking havoc’

The People Concern, an L.A. County nonprofit that provides housing and services to people experiencing homelessness and survivors of domestic violence, has two outstanding contracts for a little more than $2.2 million combined, according to John Maceri, CEO. He said a few other contracts that are set to end in the coming months could also be affected, bringing the total to about $3.3 million.

The People Concern is relying on donations and reserves, but Maceri said cash flow is a particularly big challenge, and it’s “really wreaking havoc in the system.”

He said they’re approaching an untenable situation.

“Ultimately, the people who are hurt are the people that we're serving,” Maceri said. “Because at some point, organizations cannot continue to finance debt.”

Jewish Family Service L.A. has been waiting since April on a contract for its transitional shelter that supports women and children who survived domestic violence.

Eli Veitzer, CEO, said the organization is tapping into its reserves to cover the roughly $300,000 portion of annual costs to keep the shelter open until at least next summer. But that can’t be a long-term solution, he noted.

Veitzer said LAHSA has fallen short in critical ways, but blocking funding to the agency without another path for service providers “essentially shuts down the system.”

“HUD hasn't proposed an alternative method for getting these funds to the providers and the clients who need those services, and that's the part that is the most upsetting,” Veitzer said. “There's a complete disregard for the impact of the people in L.A. County who need these services desperately, and who benefit from these services.”

Why it matters

Scott Cummings, a professor of legal ethics at the UCLA School of Law, told LAist it’s not unusual to seek a stay after an order like Carter’s. But litigation takes time, and the programs are effectively put on hold while it’s worked out in court.

“There are short-term wins for the [Trump] administration in just playing this delay game,” Cummings said. “The delay can actually last a long time, and in the meantime, the programs are suffering, and the people they're serving are suffering.”

L.A. County Supervisor Lindsey Horvath commented on the contracts in Tuesday’s board of supervisors meeting, saying: “A top concern is the 2025 LAHSA COC contracts that HUD is refusing to execute, although those programs are already operating without funding.”

Horvath requested an update next Tuesday from the county’s Department of Homeless Services and Housing to go over the remaining contracts at LAHSA.

The Ninth Circuit is expected to hear arguments next Tuesday, according to court documents, and Carter has scheduled a status conference for the week after.

LAist’s Aaron Schrank contributed to this story.