Attorney General Keith Ellison, along with 20 other plaintiffs, has filed a lawsuit against the U.S. Department of Housing and Urban Development (HUD) over recent changes to the Continuum of Care grant program. The suit alleges that HUD’s new policies will reduce access to long-term housing and services for tens of thousands of Americans experiencing homelessness or housing insecurity.
The complaint argues that HUD is altering its grant program in ways that violate congressional intent by reducing funds available for permanent housing and project renewals. The new rules also impose conditions such as requiring providers to recognize only two genders, mandating acceptance of services as a precondition for housing, and penalizing providers in areas without strict anti-homeless laws. These requirements are said to contradict previous HUD guidance and congressional approval.
Attorney General Ellison stated, “If the Trump administration’s attempts to cut this funding go through, tens of thousands of formerly homeless people will end up getting evicted from their homes through no fault of their own. Trump’s actions here are as cruel as they are unlawful, so I’m challenging them in court. I will not sit back and allow this administration to throw families out on the street.”
Continuum of Care grants have historically allowed local coalitions to plan and coordinate housing for people experiencing homelessness. Providers rely on these grants’ predictability to support unhoused individuals. Traditionally, about 90% of these funds supported permanent housing under a “Housing First” model, which does not require sobriety or minimum income as preconditions.
Under the new rule set to begin in 2026, HUD would reduce permanent housing funding by two-thirds and decrease guaranteed renewal funding from about 90% down to 30%. Advocates warn this could result in mass evictions when projects lose funding.
The lawsuit further claims that HUD plans to withhold funds from applicants who acknowledge trans and gender-diverse people or prioritize services for those with mental health or substance use disorders. It also alleges discrimination against localities whose approach differs from federal preferences.
According to the complaint, HUD failed to follow proper rulemaking procedures before implementing these changes and did not secure necessary congressional authorization. Plaintiffs argue these actions are arbitrary because there was no explanation provided for abandoning longstanding policies or consideration given to potential consequences for vulnerable populations.
The legal action is led by Washington Attorney General Nick Brown, New York Attorney General Letitia James, Rhode Island Attorney General Peter Neronha, with participation from attorneys general across several states including Arizona, California, Colorado, Connecticut, Delaware, Illinois, Massachusetts, Maryland, Maine, Michigan, New Jersey, Oregon, Vermont, Wisconsin; governors from Kentucky and Pennsylvania have also joined the coalition.
