New Jersey sues Trump administration over proposed HUD funding changes for homelessness programs
TRENTON, N.J. — New Jersey Attorney General Jennifer Davenport and a coalition of states have filed a federal lawsuit challenging the Trump administration over proposed changes to a federal homelessness funding program that they say would jeopardize permanent housing for thousands of people.
The lawsuit, filed against the U.S. Department of Housing and Urban Development, seeks to block new conditions the agency has placed on fiscal year 2026 funding for the Continuum of Care program, which provides housing and supportive services for people experiencing homelessness or housing instability.
According to the lawsuit, HUD is attempting to impose conditions that would significantly reduce funding for permanent housing projects, despite a federal court ruling last month that blocked similar restrictions on fiscal year 2025 funding.
State officials said the proposed changes threaten housing for at least 97,000 people nationwide, including more than 1,300 New Jersey residents, according to estimates from the National Alliance to End Homelessness.
“The Trump Administration is trying once again to evict thousands of people, despite a court order holding its previous attempt unlawful,” said Attorney General Davenport. “The drastic changes that HUD is attempting to impose on this grant program would increase homelessness and send over 1,300 New Jerseyans back to the streets. This is not right.”
For more than two decades, HUD has supported permanent housing initiatives through the Housing First model, which prioritizes placing individuals experiencing homelessness into stable housing before addressing other needs. According to the states, the Trump administration has moved away from that approach by imposing funding limits on permanent housing programs.
The lawsuit alleges HUD’s new funding conditions violate the Administrative Procedure Act by bypassing the required notice-and-comment rulemaking process and by acting in an arbitrary and capricious manner.
The coalition is asking the court to declare the funding conditions unlawful and prevent HUD from enforcing them.
Joining New Jersey in the lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington and Wisconsin, as well as the District of Columbia. The governors of Kentucky and Pennsylvania also joined the legal challenge.
