LA’s lead homelessness agency sues HUD, challenging suspension of funds

Topline:

How we got here: On June 11, HUD suspended the Los Angeles Homeless Services Authority from federal grant activity pending an investigation into alleged mismanagement. The federal agency said the suspension means LAHSA cannot fulfill its role as collaborative applicant for the entire region’s application for federal homelessness dollars for the upcoming fiscal year. In its lawsuit, LAHSA says the suspension is the Trump administration’s back door attempt to eliminate the Continuum of Care program in L.A., which gives local officials discretion over homelessness projects submitted for federal funding.

LAHSA’s challenge: LAHSA says HUD has failed to identify any public agreement or transaction that LAHSA has violated or cite proper evidence of mismanagement. LAHSA also claims several inaccuracies and misrepresentations in HUD’s original suspension letter, including relying on reviews that LAHSA says were irrelevant to federal funding. “HUD supports its position with an amalgamation of uncorroborated hearsay information apparently cherry-picked from the internet,” the complaint states.

Legal argument: LAHSA's attorneys contend that HUD unlawfully suspended funding, arguing that the action violates the Administrative Procedure Act, the Constitution's separation of powers principle, and the Tenth Amendment. LAHSA is asking for a stay of the HUD suspension pending judicial review and a permanent injunction barring head from suspending LAHSA or blocking the work of the Los Angeles Continuum of Care.

Why it matters: The deadline for the L.A. region to submit its application to HUD for regional homelessness grants is Aug. 26. LAHSA says the suspension jeopardizes $241 million in federal funding that supports more than 11,000 people across L.A. County. LAHSA says the HUD suspension could prevent the agency from other activities, including releasing the findings of its 2026 homeless count conducted in January.