Nonprofits, Cities Take HUD to Court Over CoC Policy Changes

By Donna Kimura NorthShore Magazine

Nonprofit organizations and local governments have joined together to sue the Department of Housing and Urban Development (HUD), aiming to halt drastic changes they say will push hundreds of thousands of people onto the street.

“HUD’s proposed Continuum of Care Program NOFO [notice of funding opportunity] represents a destructive departure from decades of homelessness policy and will put an estimated 170,000 additional households into homelessness,” says Renee M. Willis, president and CEO of the National Low Income Housing Coalition (NLIHC). “These actions will destabilize communities across the country. CoC funding must prioritize evidence-based housing practices, housing stability, and local decision-making rather than undermine them. The harm to families and individuals who rely on these programs will be irreversible and felt for generations to come. Federal policy should fuel stability—not contradict it.”

NLIHC, the National Alliance to End Homelessness (NAEH), city of Boston, city and county of San Francisco, and others filed the lawsuit in U.S. District Court for the District of Rhode Island.

“Across five presidential administrations, the CoC program has employed proven strategies to combat homelessness. For years that has meant an approach that emphasizes stable, permanent housing,” says the complaint.

However, on Nov. 13, HUD rescinded a necessary program notice and replaced it with one that threatens existing services, according to the groups, adding that the action is “throwing the entire program, meant to ensure stability for programs and the people who rely on them, into chaos.”

“HUD’s 2025 CoC program competition NOFO represents a reckless and illegal leap backward for homeless response in the United States. There is no doubt that it will cause homelessness to rise across this nation,” says Ann Oliva, CEO of the NAEH. “At a time when we should all be focused on scaling up and improving our most effective programs, this administration is instead focused on tearing them down. These sudden decisions will cause programs to be totally defunded or go without federal funds for at least five months, and likely longer. It is stunningly unaccountable administration of this critical grant program.”

According to the groups, the Nov. 13 notice came just weeks before the fiscal 2025 awards would have gone out. It also rescinded an existing two-year funding notice, initiating a new competition for the fiscal 2025 awards.

“This decision will severely delay essential funding for housing, as HUD now says it will not make any new awards until May at the earliest,” says the suit. “But programs across the country have grants expiring as soon as January—and will now be left without funding for months, forcing them to shutter or significantly scale back their programs and placing the formerly homeless individuals and families that rely on those programs at risk of homelessness once again.”

The housing advocates argue that the late decision to replace the original NOFO is unlawful. If HUD wanted to launch a new competition, the deadline to do so was in June.

They add that the recent notice by the Trump administration is also unlawful in other ways. “The new NOFO slashes the CoC program’s funding for permanent housing by two-thirds, contrary to Congressional direction, throwing the housing for more than 170,000 people into question,” says the lawsuit. “It shifts funding to disruptive and punitive models that are contrary to well-established and proven strategies that reduce homelessness.”

“Federal policy should be a source of housing stability — not a force that restricts it. We are stepping into this lawsuit because the people we serve cannot afford federal policies that weaken their communities’ ability to keep them housed,” adds Willis.

Read the full complaint here.