More than 20 states, spearheaded by New York Attorney General Letitia James, have initiated a federal lawsuit against the Trump administration, seeking to restore billions of dollars in funding for programs designed to combat homelessness. The lawsuit targets recent cuts and new conditions imposed on the Department of Housing and Urban Development's (HUD) Continuum of Care program, which the states argue are illegal and harmful to vulnerable populations.

The Continuum of Care program has been notably affected by the administration's new funding stipulations, which critics assert have created instability and jeopardized support for individuals experiencing homelessness. The lawsuit claims that funding for permanent housing has been drastically reduced to only 30 percent, down from nearly 90 percent, potentially endangering the housing security of approximately 170,000 individuals.

Additionally, the lawsuit raises concerns about discrimination against organizations that support transgender and nonbinary individuals, as the new conditions may exclude those that inquire about gender identity. The complaint also alleges that the administration is penalizing states and local governments that do not conform to its political agenda by deducting points from funding applications.

The policies in question threaten to cancel numerous existing projects and require service providers to make substantial adjustments within an unrealistic timeframe, which could force many individuals and families back into homelessness. Attorney General James emphasized the essential role of Continuum of Care funds in preventing homelessness and providing critical resources to communities.

The issue of homelessness in the United States has reached alarming levels, with more individuals experiencing homelessness in 2024 than at any point in the past two decades. The Trump administration's approach to addressing homelessness has included controversial proposals, such as relocating individuals to tent cities and reviving mental institutions for those deemed severely mentally ill.

In recent years, legal rulings have allowed for increased penalties against individuals experiencing homelessness, including laws that criminalize sleeping in public spaces. The U.S. Interagency Council on Homelessness has also faced significant reductions in its capacity to address the crisis, with the current administration's leadership moving away from the widely supported 'housing first' model.

In New York City alone, over 103,000 individuals are currently in shelters, with many more sleeping on the streets or in temporary accommodations. The new funding restrictions could severely impact the ability of organizations to provide necessary housing and support services, raising concerns about the stability of those who have recently secured housing.