Washington AG sues over cuts and new conditions to permanent housing program

Recent changes to how grants are awarded through a federal housing program are illegal and will limit Washingtonians’ access to long-term housing and other services, state Attorney General Nick Brown alleged in a multistate lawsuit filed Tuesday.

According to the lawsuit, the Department of Housing and Urban Development has illegally placed conditions on the Continuum of Care grant program, which will reduce how much funding can be awarded to permanent housing.

During the second Trump administration, the federal agency has tried to shift from the longstanding “housing first” strategy to reduce homelessness. That approach prioritizes placing applicants into housing without preconditions. Earlier this month, HUD announced it would instead focus on programs that fund transitional housing with work requirements and other conditions to access the money.

The changes to the program, Brown said, also include a requirement that housing providers only recognize two genders and mandates that residents accept services as a condition for housing. The lawsuit alleges the new conditions will prioritize jurisdictions that prohibit “public illicit drug use” and “public camping or loitering.”

“In violation of Congressional intent and the department’s own intentions, HUD is drastically reducing the amount of grant funds that can be used for permanent supportive housing,” Brown said during a news conference Tuesday. “HUD is also arbitrarily nixing providers eligibility, not based on their expertise or professionalism, but whether or not they serve jurisdictions that essentially criminalize being unhoused.”

Earlier this month, HUD announced it would shift its approach for the program. In a statement announcing the change, HUD Secretary Scott Turner said the changes would “promote independence and ensure we are supporting means-tested approaches to carry out the President’s mandate, connect Americans with the help they need, and make our cities and towns beautiful and safe.”

As it announced the changes, the agency said a majority of funding through the Continuum of Care program would now go toward “transitional housing and supportive services, ending the status quo that perpetuated homelessness through a self-sustaining slush fund.”

According to the Washington attorney general’s office, the agency previously allocated approximately 90% of the program’s funding to support permanent housing. Beginning next year, this would be cut to 30%.

Across the country, about $3.9 billion in grant funding is available through the program for 2026. The state typically receives around $120 million a year through the program. Most of this funding, Brown said, is used in the five most populous counties in the state, including Spokane County.

The changes will create “administrative chaos,” the state attorney general’s office said, and are likely to result in thousands of residents losing their housing.

“Instead of investing in programs that help people stay safe and housed, the Trump Administration has embraced policies that risk trapping people in poverty and punishing them for being poor,” the states wrote in the lawsuit, filed Tuesday in Rhode Island.

The lawsuit alleges that Congress has not authorized the new conditions, and that the rules are arbitrary and capricious. Brown said Tuesday the states would seek an injunction to block the rules from taking effect.

“This $120 million in annual funding supports data-driven programs that are proven to help stabilize people so they can have the best chance to secure permanent housing,” Gov. Bob Ferguson said in a statement Tuesday. “Trump is once more playing politics with people’s most basic needs.”

Joe Nguyen, director of the state Department of Commerce, said Tuesday that if providers are not able to work through the process by Dec. 15, they “may be at a gap, and not be able to actually fund some of the work they are doing.”

Nguyen added that the delayed announcement of the new requirements “makes it almost impossible for the funds to be administered.”

Washington is joined in the lawsuit by 18 attorneys general and two governors. According to Brown, the lawsuit is the 45th he has brought against the second Trump administration.

“The tie that binds all of these cases together is Washington state’s resilience in the face of unconstitutional or illegal actions to protect the best interests of our state and the people of our state,” Brown said. “And we will continue to do that everyday, and fight and challenge those unlawful actions.”