New York Attorney General Letitia James is leading a coalition of more than a dozen states in asking a federal judge to block the Trump administration from cutting funds used to house thousands of formerly homeless New Yorkers.
The lawsuit, which was filed in the U.S. District Court of Rhode Island on Tuesday, argues the Trump administration's new restrictions on $3.6 billion in grants could jeopardize housing for 170,000 formerly homeless people, including more than 5,000 New York City households.
“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,” James said in a statement.
The Trump administration didn’t immediately comment on the litigation. Trump officials have previously said a policy shift is needed to address the root causes of homelessness, which they say are mental health and addiction, and ultimately increase self-sufficiency.
The U.S. Department of Housing and Urban Development earlier this month announced it would abruptly slash two-thirds of funding for long-term housing programs beginning next year and instead direct money to programs that provide temporary or “transitional” accommodations with mandatory work or treatment requirements. HUD officials also said they could reject applicants who previously or currently “use a definition of sex other than as binary in humans,” or “facilitate racial preference.” HUD previously issued similar guidance prohibiting efforts to foster diversity and banning what the agency termed “gender ideology.”
New York City receives $176 million to fund programs and social service providers through its continuum of care, a network of nonprofits and city agencies coordinating to reduce homelessness. The city uses the funding to house more than 10,000 people across 8,400 units, officials said.
But top city officials and agency heads say the pending cuts mean New York City will lose at least $109 million in housing grants. That money primarily funds supportive housing, a type of permanent housing typically reserved for people who have been homeless and have mental illness or other special needs. The housing comes with additional services such as counseling or case management. City officials warn the cut will drive up street homelessness and the shelter population amid rising costs and a near-zero vacancy rate for affordable apartments.
“ This is basically just taking a giant step backwards from what we know works,” Department of Social Services Commissioner Molly Wasow Park said in an interview.
Park said the city and nonprofit providers will struggle to fill the “massive hole” left by the funding cutoff. She said the city supports the lawsuit challenging the cuts.
“Providers are going to be faced with untenable situations, whether they have to walk away from these buildings because they can no longer afford to operate them,” said Pascale Leone, executive director of the Supportive Housing Network of New York. “These are folks with leases. You take away the funding from the housing, but people don't go away.”
In its new grant guidance released on Nov. 13, HUD said any new housing programs it does fund will prioritize serving elderly people or those with a physical disability, not including substance abuse disorder or mental illness — a marked departure from who the city’s supportive housing currently serves. Statewide about 65% of supportive housing tenants have a serious mental illness or substance abuse disorder.
James and the coalition of attorneys general argue the new conditions determining who can be helped by grant dollars punish those who do not align with the administration’s policies. They say they are unlawful because they could potentially shut people out of aid if they have mental illness, and people with disabilities are a protected class.
Trump signaled in a July executive order he wanted to upend the way cities and states address homelessness by moving away from a “housing-first” strategy, which recognizes secure, permanent housing as key to stability in other parts of a person’s life, and mandating treatment programs as a condition for housing.
The shift in funding redirects funding away from long-term housing and toward short-term programs that mandate drug and mental health treatment, work with law enforcement to clear street homeless encampments and impose work rules.
In an interview with Fox Business on Nov. 19, HUD Secretary Scott Turner said housing people with untreated mental illness and addiction disorders without mandating treatment ignores the “root cause” of homelessness.
“During the Biden administration, it was just warehousing,” Turner said. “It was a homeless industrial complex — a slush fund for nonprofits around the country.”
But housing advocates said tens of thousands of New Yorkers simply cannot afford to rent apartments.
“It is a frankly deliberate decision to ignore the larger macroeconomic climate and to treat this as a moral failure, to treat poverty and other challenges as a moral failure,” Park said.
Homeless advocates have credited housing first policies succeeded in effectively ending chronic homelessness among veterans in the city. Leone said supportive housing is an effective model that works to reduce homelessness.
“Research will show time and time again. The root cause of homelessness is a lack of affordable housing,” Leone said. “What we spend in hospital use, jails, prison, and other emergency services as compared to supportive housing is astronomical.”
The Supportive Housing Network of New York estimates the cost of sheltering a single adult is about $145 a day, while supportive housing costs $68 a day per person. Tenants in supportive housing typically pay a third of their income toward rent, with aid programs covering the remainder.
A group of congressional Republicans, including New York Reps. Nicole Malliotakis, Andrew Garbarino, Mike Lawler and Nick LaLota urged HUD in an October letter to extend grant contracts for another yearn order to avoid any disruptions while allowing time for the Trump administration to carefully implement reforms.
Acting city Housing Commissioner Ahmed Tigani said the cuts will have a ripple effect that shifts money away from other programs and projects to fill the gap.
“The retreat away from federal rental assistance, the cancellation of the emergency housing voucher program, the changes to continuum of care — all of these together would require us to take resources that would otherwise be available to expand on permanent housing and supportive housing and ultimately mean we’ll do less," he said.
The attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, Wisconsin and the District of Columbia, as well as the governors of Kentucky and Pennsylvania, joined the case.
