New York Attorney General Letitia James has filed a lawsuit against the Trump administration, joined by 18 other attorneys general and the governors of Kentucky and Pennsylvania, to challenge recent changes to the Department of Housing and Urban Development’s (HUD) Continuum of Care (CoC) program. The suit seeks to block new federal restrictions that would significantly reduce funding for housing initiatives aimed at addressing homelessness.
The coalition argues that the new rules could result in billions of dollars being withheld from local and regional organizations providing housing and support services, particularly affecting veterans, people with disabilities, and members of the LGBTQ community. The changes include a cap on permanent housing funding, reducing it from up to 90 percent to no more than 30 percent of CoC funds. According to state officials, this shift could jeopardize housing for an estimated 170,000 people nationwide.
Attorney General James stated, “Communities across the country depend on Continuum of Care funds to provide housing and other resources to our most vulnerable neighbors. 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.”
Established by Congress in 1987, the CoC program supports states, local governments, nonprofits, and coalitions in delivering housing-first solutions without imposing barriers such as sobriety or employment requirements. Permanent supportive housing funded through CoC has received bipartisan backing for decades due to its effectiveness in increasing stability among homeless populations.
The lawsuit also highlights concerns about new conditions excluding organizations that serve transgender or nonbinary individuals or even acknowledge their existence. The vague language could disqualify many service providers from receiving federal aid if they inquire about gender identity or offer inclusive shelter options.
In New York State alone, 24 regional CoC coalitions receive over $320 million annually—94 percent allocated for permanent housing supporting nearly 14,000 households statewide. Officials warn that implementing the new cap would endanger more than 9,000 households across New York State—including almost 5,000 in New York City—and lead to mass evictions as winter approaches.
The revised rules further exclude programs focused on mental disabilities while prioritizing those serving only physical disabilities. This creates a conflict with New York Human Rights Law by forcing providers to potentially deny services based on disability type in order to maintain eligibility for federal funding.
Attorney General James contends that HUD’s changes violate both Congressional intent—since Congress mandated distribution based solely on need—and legal statutes such as the Administrative Procedure Act. The coalition is seeking a court order declaring these conditions illegal.
New York City Mayor Eric Adams said: “We know that taking a housing first approach is an effective way to address homelessness… Much of this housing is managed by the very providers who have relied on federal Continuum of Care funding for decades and who do incredible work in our communities every day. We must all work together to ensure that we tackle the problem of homelessness head-on and invest in solutions that work and uplift working people. New York City is proud to be part of this coalition to fight for every last dollar New Yorkers deserve.”
Pascale Leone, Executive Director of Supportive Housing Network of NY added: “Her swift action offers a lifeline to thousands of New Yorkers whose homes were put at risk by the recent HUD FY2025 CoC Notice of Funding Opportunity… Nearly 14,000 affordable and supportive homes statewide rely on this funding; without it, the stability that so many have fought to build could unravel overnight… This legal challenge is a crucial step toward safeguarding their homes and their futures.”
Ahmed Tigani, Acting Commissioner for NYC’s Department of Housing Preservation and Development said: “Permanent housing paired with supportive services has repeatedly proven to reduce homelessness… New York City is standing with New York State Attorney General Tish James and partners nationwide to oppose these harmful changes.”
Molly Wasow Park from NYC Department of Social Services commented: “We commend Attorney General James for taking urgent action… DSS is proud to join this coalition… To willfully ignore the devastating impact …by abruptly pulling the rug out from under vulnerable Americans is unconscionable.”
Dr. Michelle Morse from NYC Department of Health added: “Housing is a cornerstone of health … Reducing access … will increase homelessness … Together we must keep people connected to resources that foster health…”
The lawsuit includes participation from attorneys general representing Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Oregon, Rhode Island, Vermont Washington Wisconsin District Columbia along with Kentucky’s governor Andy Beshear Pennsylvania Governor Josh Shapiro.
