LAHSA sues Trump administration over HUD funding suspension

The Los Angeles Homeless Services Authority sued the Trump administration Monday, accusing the U.S. Department of Housing and Urban Development of unlawfully suspending the agency from federal homelessness programs based on unsubstantiated allegations of mismanagement.

The lawsuit, filed in the Central District of California, seeks to block HUD from removing LAHSA as the collaborative applicant for the Los Angeles Continuum of Care, a federally created program that channels homelessness funding through regional agencies.

The complaint follows HUD's June 11 announcement suspending LAHSA from participating in federal programs pending an investigation by the Office of Inspector General. In a subsequent June 18 letter, HUD informed the agency it could no longer submit the region's application for fiscal year 2026 funding.

LAHSA contends the suspension threatens more than $200 million in annual federal funding and jeopardizes services for thousands of unhoused and formerly unhoused residents.

In an email Monday, LAHSA attorney Keri C. Axel of Waymaker LLP called HUD's suspension "lawless," arguing it is unsupported by the evidence, conflicts with Congress' directives for locally administered homelessness funding and threatens to disrupt housing placements and critical data systems serving unhoused residents. She said HUD acted without providing LAHSA a hearing or considering the impact on vulnerable people and local governments, and asked the court to immediately block the suspension.

Representatives for HUD did not respond to requests for comment Monday.

HUD's June 11 letter, signed by Deputy Secretary Andrew D. Hughes, alleged LAHSA may have violated federal grant requirements through chronic failures in financial management, internal controls, conflict-of-interest safeguards and grant compliance.

"Turning over billions of dollars from American taxpayers to an organization under investigation and suspected of gross misuse of federal funding and 'obvious fraud' does nothing to reduce homelessness," Hughes wrote.

LAHSA counters that HUD cited no investigative findings and instead relied on news reports, statements by public officials and public audits whose recommendations the agency says it already addressed.

The complaint alleges HUD violated the Administrative Procedure Act by suspending LAHSA without identifying any specific grant violations or presenting sufficient evidence. It also argues the department exceeded its statutory authority and violated constitutional separation-of-powers principles by attempting to dismantle a funding structure created by Congress.

According to the complaint, LAHSA remains the only entity able to access HUD's grant application portal because it timely registered as the collaborative applicant earlier this year. The application deadline is Aug. 26.

The agency argues HUD's actions could prevent the Los Angeles Continuum of Care from competing for federal homelessness grants altogether.

The case is Los Angeles Homeless Services Authority v. Donald J. Trump et al., 2:26-cv-07056 (C.D. Cal., filed June 29, 2026).