A federal judge issued a scathing order Thursday blocking a gambit by the Trump administration to take control of federal funding for homelessness programs in Los Angeles County.
In issuing a preliminary injunction, U.S. District Judge David O. Carter found that the U.S. Department of Housing and Urban Development acted arbitrarily and capriciously when it suspended the Los Angeles Homeless Services Authority from managing federal homelessness funds. He set a trial date in February.
The June 11 suspension disqualified LAHSA from submitting an application, due August 26, for about $240 million on behalf of 140 providers of homeless services. HUD said the suspension was necessary, citing negative audits and news reports going back more than a decade. LAHSA filed suit, alleging the abrupt action was a pretext for the Trump administration’s intention to impose its own policy short-term housing with an emphasis substance abuse and mental health treatment over the local priority of support for permanent housing.
The decision was the second rebuke of HUD in less than a week, as a federal judge in Rhode Island issued a ruling on August 7 that threw out the agency’s 2026 spending plan, finding it shifted funding priorities without a required review.
The Rhode Island ruling nullified the August 26 deadline, removing the emergency from the Los Angeles case but left open the question of whether HUD’s suspension of LAHSA would stand.
Carter, closed that loop, ordering HUD to restore LAHSA as the master applicant for the funding plan when it is redone. But his ruling, incorporating his own frequent criticisms of LAHSA, left the future of the embattled agency in doubt.
He ordered a review to be delivered to his court by October 13 of other agencies that could replace LASHA as the manager of federally-required homeless programs. In addition to submitting the master grant application, those include maintaining a homeless database and conducting the annual count.
The review would be done by the Los Angeles Continuum of Care, a behind-the-scenes board of community members that fills a Congressionally-mandated role guiding policy for federally-funded programs. The CoC, as it is known, has designated LAHSA to perform the functions mandated in the 2009 Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act.
Both the Los Angeles County Development Authority and the City of Los Angeles have notified the court of their ability to take on those functions, either individually or jointly. LAHSA was created in 1993 as part of a settlement of disputes between the city and county over homeless services.
Carter harshly criticized HUD for “leveraging a crisis of its own making to wrest power to itself that Congress expressly granted to local communities like Los Angeles, raising the specter of ‘whether HUD is punishing Los Angeles, rather than addressing a problem that actually requires remediation.’ ”
Echoing assertions made during oral arguments last week and in declarations, he concluded that “HUD’s rash suspension of LAHSA will significantly harm the public interest.
“Inevitably, this suspension will result in deaths among the homeless and the displacement of over 11,000 unhoused individuals onto the streets and into the neighborhoods of Los Angeles. HUD needed to consider reasonable alternatives when it abruptly decided that the bill for LASHA’s dysfunction had come due.”
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