Judge Blocks Trump Plan To Suspend Federal Funding For LA County Homelessness Agency

LOS ANGELES, CA — A judge Thursday blocked the Trump administration's decision to suspend federal funding to the Los Angeles Homeless Services Authority over allegations of fraud and widespread mismanagement, finding that the abrupt loss of cash would jeopardize housing and services for more than 11,000 people across the region.

U.S. District Judge David Carter's partial preliminary injunction against the U.S. Department of Housing and Urban Development allows LAHSA access to federal homelessness funding for fiscal year 2026.

Also at stake is nearly $241 million already earmarked for the Los Angeles region by Congress, as well as immediate future funding for homelessness in the next fiscal year.

"This has great consequences for the Los Angeles region and impacts the region's ability to compete with other cities across the country for limited homelessness funding nationwide," Carter wrote in his order issued Thursday in Los Angeles federal court.

Supervisor Kathryn Barger applauded the ruling.

"Judge Carter's ruling is fair, measured, and recognizes two realities that must be addressed simultaneously," she said in a statement. "First, we cannot abruptly disrupt funding that people currently experiencing homelessness depend on to remain housed and connected to critical services. Second, meaningful reform of our region's homeless services system cannot be delayed."

The injunction "strikes an appropriate balance by preserving short- term stability, respecting local coordination, and establishing a clear path toward accountability and meaningful structural change," Barger said, adding that while change is necessary, "it must be implemented in a way that does not pull the rug out from under vulnerable individuals who depend on these services today."

Citing concerns of fraud and fiscal mismanagement, HUD stripped the authority of LAHSA on June 11 to apply for funding on behalf of the Los Angeles Continuum of Care, "flying in the face of Congressional mandates," Carter wrote.

The LA CoC coordinates housing and services to prevent and end homelessness across Los Angeles County.

The sudden announcement by HUD was described in a recent court hearing as dropping a "bomb into the region."

Carter determined that the federal funding relied on by the LA CoC supports 140 projects helping 89 veterans, 1,030 families, 1,923 children, 823 transition-age youth, 1,627 seniors, and 901 individuals impacted by intimate partner violence.

The judge also stated that HUD has been "complicit" in the crisis facing LAHSA and has been on notice "of the very accusations it now brings against LAHSA concerning fraud and fiscal mismanagement. For decades, LAHSA and HUD have been in a joint partnership in failure," according to Carter.

LAHSA is a joint powers authority formed in 1993 through an agreement between the city and county of Los Angeles. Half of the governing board of LAHSA is appointed by the mayor of Los Angeles and the Los Angeles City Council. The other half of LAHSA's governing board is appointed by members of the L.A. County Board of Supervisors.

"This has, at times, enabled a cycle of blame-shifting," according to the ruling. "When data inconsistencies or compliance issues arise, the City points to LAHSA. In turn, LAHSA attributes its problems to a lack of information or cooperation from the City."

This relationship "has fostered a system in which responsibility is routinely deflected, allowing both entities to evade accountability, with no single party willing to take responsibility," the court wrote.

"HUD has also been complicit in this blame-shifting cycle," Carter said, adding that in so doing, "all of these entities have effectively abdicated governance."

HUD Secretary Scott Turner said in a statement in June that HUD had "uncovered evidence of LAHSA's false statements and its irresponsible actions and failures," including a lack of financial management and lack of safeguards against conflicts of interest.

The LA CoC has received nearly $1 billion in taxpayer dollars over the last five years. Despite federal assistance, the Los Angeles region remains the epicenter of the nation's "drug-fueled" homeless crisis, according to Turner.

HUD cited prior financial reviews despite extensive corrective actions already undertaken by the county-city homeless agency, and ongoing efforts to modernize its financial systems and strengthen internal controls, according to LAHSA officials.

Despite the allegations that Los Angeles has failed to reduce homelessness, recent data showed significant progress.

In June, Gov. Gavin Newsom announced California achieved the largest reduction in unsheltered homelessness in the nation last year, and saw the largest decline in unsheltered homelessness since 2009, citing HUD's data.

Los Angeles experienced a 10.3% drop in unsheltered homelessness, with the largest regional drop nationwide, according to HUD's data.

By Fred Shuster, City News Service