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Thousands of Americans are at risk of losing shelter under planned cuts and new conditions on funds, lawsuit says
Alex Woodwardin New YorkTuesday 25 November 2025 22:18 GMTComments
CloseRelated video: White House says homeless people in DC could be forced into shelter or jailed
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More than 20 states are suing Donald Trump’s administration to restore billions of dollars in grant funding to combat homelessness, with tens of thousand of Americans at risk of losing shelter.
A federal lawsuit from New York Attorney General Letitia James and Democratic officials from 19 other states asks a judge to block the administration’s cuts and “illegal” new conditions on funding through a 40-year-old anti-homelessness program in the Department of Housing and Urban Development.
The Continuum of Care program was thrown “into chaos” this month after the administration imposed new conditions on funding that are “holding these funds and the people they help hostage,” according to the lawsuit.
Trump’s HUD is denying funds to organizations that support transgender and nonbinary Americans and reversing longstanding support for the “housing first” philosophy that prioritizes stable housing.
Under the new conditions, only 30 percent of Continuum of Care funds can support permanent housing — down from nearly 90 percent under terms set to expire next year. If that cap is put in place, roughly 170,000 Americans are at risk of losing their housing, according to the lawsuit.
open image in galleryThe Trump administration is imposing new conditions on federal funds to end homelessness that could force tens of thousands of Americans out of shelters, according to a new lawsuit aimed at stopping the funding cuts. (AFP via Getty Images)New conditions on serving LGBT+ people are vague enough that organizations that shelter trans and nonbinary people, or even ask for a person’s gender identity, could be shut out from federal funds, according to the lawsuit.
HUD is also “discriminating” against states and local governments that don’t support the Trump administration by “deducting points” from funding applicants if they do not align with the president’s agenda, the complaint says.
Taken together, the policies “threaten to cancel thousands of existing projects, require providers to fundamentally reshape their programs on an impossible timeline, and essentially guarantee that tens of thousands of formerly homeless individuals and families will be evicted back into homelessness,” according to the lawsuit.
“Communities across the country depend on Continuum of Care funds to provide housing and other resources to our most vulnerable neighbors,” James said in a statement.
“These funds help keep tens of thousands of people from sleeping on the streets every night,” she added. “I will not allow this administration to cut off these funds and put vital housing and support services at risk.”
More people experienced homelessness in the United States in 2024 than at any other point within the last two decades, which is when the federal government began tracking the population.
During his campaign, Trump’s platform promised to “end the nightmare” of “dangerously deranged” people experiencing homelessness with a plan to “open large parcels of inexpensive land, bring in doctors, psychiatrists, social workers, and drug rehab specialists, and create tent cities where the homeless can be relocated and their problems identified.”
The president also vowed to “bring back mental institutions to house and rehabilitate those who are severely mentally ill or dangerously deranged with the goal of reintegrating them back into society.”
Last year, the Supreme Court’s conservative majority rejected arguments from a group of homeless people in Oregon who argued that a series of laws punishing people for sleeping outside was considered cruel and unusual punishment.
That ruling paved the way for police to ticket, fine or arrest people who are sleeping in public, and state and local governments are increasingly implementing “public camping” bans and laws prohibiting sleeping in cars, loitering or asking for money.
In July, Trump signed another executive order empowering cities and states to force people experiencing homelessness into treatment centers.
open image in galleryHousing secretary Scott Turner has claimed the ‘housing first’ approach to ending homelessness has created a ‘homeless industrial complex.’ (Getty Images)The U.S. Interagency Council on Homelessness has also been effectively disbanded under the so-called Department of Government Efficiency's slashing of the federal government. During the end of his first administration, Trump’s director Robert Marbut abandoned the “housing first” framework that has been the driving force behind policies to address the crisis for years, widely supported by homelessness and housing agencies and services across the country.
Trump’s new HUD Secretary Scott Turner has argued that the “housing first” model instead created a “homeless industrial complex” that does not combat root causes of homelessness.
DOGE leader Elon Musk has similarly claimed that federal support for ending homelessness is part of a global conspiracy to make more people homeless in order to enrich the organizations working to end the crisis.
In New York City, more than 103,000 people are sleeping in shelters, while thousands of others are forced to sleep in the streets and in subways, and more than 200,000 people are estimated to be temporarily sleeping in the homes of others, according to the latest estimates from the Coalition for the Homeless.
It is estimated that roughly 350,000 people are without homes in New York City, the group discovered.
People experiencing homelessness in New York are served by 24 different groups that receive more than $320 million in federal funding to help provide housing and other services. The vast majority of those dollars support permanent housing
The Trump administration’s new cap on permanent housing spending could imperil housing for 9,000 households, including nearly 5,000 people in New York City. Without those funds, “the stability that so many have fought to build could unravel overnight,” according to Pascale Leone, director of the Supportive Housing Network of New York.
“As families prepare for the holiday season, they should not have to question whether they will still have a place to live when winter arrives,” Leone said.
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