LAHSA Sues Trump Administration Over Decision To Suspend HUD Funding

LOS ANGELES, CA — The Los Angeles Homeless Services Authority Monday filed a lawsuit against the Trump administration, challenging a decision to suspend federal funding over allegations of fraud and widespread mismanagement.

LAHSA officials said they are attempting to prevent any interruption of federal resources that support housing and services for more than 11,000 people across Los Angeles County.

In addition to the federal complaint, LAHSA filed an application for a temporary restraining order to prevent HUD from suspending funding while the matter is reviewed in court.

"We are taking this step to protect formerly unhoused people who found a permanent home," Gita O'Neill, LAHSA's interim CEO, said in a statement.

"The people who will be harmed by this decision are not bureaucrats. They are families, veterans, seniors, and formerly homeless Angelenos who rely on these resources to remain housed. We must do everything in our power to ensure those funds continue reaching the people who rely on them," O'Neill added.

On June 11, the U.S. Department of Housing and Urban Development announced it had suspended federal funding to LAHSA.

HUD Secretary Scott Turner said in a statement 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 Los Angeles Continuum of Care, led by LAHSA, has received nearly $1 billion in taxpayer dollars over the last five years. Despite federal assistance, L.A. 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.

LAHSA's lawsuit strongly disputes the legal and factual basis for the suspension.

The suit alleges several inaccuracies and misrepresentations in HUD's notification letter to LAHSA, including improperly attributing a failure to spend over $500 million in homeless services funding to LAHSA when the source does not mention the agency.

Other inaccuracies in the HUD letter include conflating reviews, assessments, public comments, and media statements — which do not follow rigorous, established standards — with formal audits; misrepresenting the context of corrective actions or cooperation; and suggesting wrongdoing without evidence, LAHSA argued.

"We have worked to build real transparency at LAHSA. Weaponizing old, corrected financial reviews to suddenly strip housing from thousands of people makes no sense — legally or practically," LAHSA Commission Chair Amber Shiekh said in a statement.

"LAHSA cannot stand by while an unjustified federal decision threatens to pull the rug out from under Los Angeles's homeless services system," Shiekh added.

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 percent drop in unsheltered homelessness, with the largest regional drop nationwide, according to HUD's data.

The data reflected what seems to be an ongoing trend since 2024, when the L.A. region saw the first decline in homelessness.

LAHSA's 2025 point-in-time count showed there was a 4 percent decrease in homeless people across the county, while in the city of Los Angeles, there was a 3.4 percent drop.

Data showed that unsheltered homelessness in the county declined by 9.5 percent in 2025 compared to the prior year, and it has dropped by 14 percent over the last two years. Additionally, there has been about an 8.5 percent increase of unhoused individuals entering interim housing, such as shelters and other forms of temporary housing.

In the city of L.A., unsheltered homelessness declined by 7.9 percent in 2025, and it has dropped by 17.5 percent over the last two years. LAHSA reported there has been a 4.7 percent increase in unhoused individuals entering temporary housing in the city.