The Los Angeles Continuum of Care says the Trump administration is using LAHSA’s suspension to seize control of federal homelessness funding and shift money away from permanent housing.
The Los Angeles Continuum of Care, a little-known regional body that helps decide how hundreds of millions of federal homelessness dollars are spent, has moved to intervene in the Los Angeles Homeless Services Authority’s lawsuit against the Trump administration. Represented by the Legal Aid Foundation of Los Angeles, Public Counsel and Steptoe, the LA Continuum of Care is seeking to join the case as a separate plaintiff.
Its intervention sheds light on a homelessness funding structure that is largely invisible to the public. As the region’s most visible homelessness agency, LAHSA can easily appear to be the entity that controls the region’s federal homelessness system, but in fact it does not.
The Continuum of Care, or CoC, is an unincorporated association made up of local governments, housing authorities, service providers and people with lived experience of homelessness. It covers 85 of Los Angeles County’s 88 cities, excluding Long Beach, Pasadena and Glendale, which have their own Continuums of Care.
The LA CoC has a 21-member board that includes representatives from the county’s eight Service Planning Areas, major government and housing agencies, at-large members and people who have experienced homelessness. LAHSA has a seat on that board, but LAHSA is not the CoC. That distinction is central to the lawsuit.
Congress created the federal Continuum of Care system to combine federal funding with local decision-making. HUD establishes the national grant competition, but each local CoC assesses community needs, establishes priorities and ranks the housing and service projects seeking money. The CoC then selects a “collaborative applicant” to assemble those projects into one regional application and submit it to HUD.
In Los Angeles, the CoC selected LAHSA to perform that administrative role. It also delegated operation of the region’s homeless database, Coordinated Entry System and annual homeless count to LAHSA. But the CoC maintains that the underlying authority remains with the CoC, which can assign those functions to another organization.
The roughly $241 million at stake in the current funding competition is therefore not simply a grant for LAHSA. It represents potential funding for approximately 140 separate projects across the region, including more than 8,000 units of permanent supportive housing serving over 11,000 people. The CoC determines how those projects are ranked. LAHSA packages and submits the application. HUD makes the awards, and government agencies, housing authorities and nonprofit providers operate the programs.
HUD disrupted that process when it suspended LAHSA from federal grant activity on June 11, citing allegations of financial mismanagement, inadequate contract oversight and conflicts of interest. Because the suspension prohibits LAHSA from conducting transactions with the federal government, HUD said LAHSA could no longer submit the CoC’s regional application. LAHSA sued, arguing that the immediate suspension was unlawful and imposed without adequate notice or process. Its case asks the court to restore its ability to perform the functions the CoC assigned to it while the dispute is resolved.
The CoC entered the case after HUD proposed allowing individual providers to apply directly to Washington. That might sound like a simple workaround for LAHSA’s suspension. The CoC argues it would instead bypass the locally governed system created by Congress.
Under the normal process, the CoC evaluates providers and ranks their projects according to regional priorities. Those rankings can determine which programs are most likely to be renewed. If providers apply directly to HUD, larger organizations with extensive grant-writing capacity may have an advantage, smaller community providers may be shut out and, more importantly, federal officials could set our local homelessness priorities and decide which LA programs survive.
LAHSA and the CoC therefore have related but distinct interests. LAHSA wants its suspension overturned. The CoC wants to preserve its authority to rank projects and select the entity that submits the application, whether that entity remains LAHSA or is eventually replaced. The CoC’s motion argues that LAHSA cannot fully represent that separate institutional interest in the current litigation.
At the August 6 hearing, attorneys for the CoC warned U.S. District Judge David O. Carter that allowing providers to apply directly to HUD would fracture the regional system and create a funding “free-for-all.” They told the court that roughly 200 providers depend on the funding and about 11,000 people are housed through the affected programs. Carter questioned why HUD had allowed LAHSA to remain in its central role as recently as April if its longstanding problems justified an immediate suspension in June. He also criticized the city and county for shifting blame to LAHSA even though both governments created, fund and govern the agency.
The dispute isn’t just about who submits a grant application. It’s a fight over who gets to set homelessness policy in LA. If HUD can bypass the CoC, it can do more than replace LAHSA as an administrator. It can use federal funding to force the region away from Housing First and toward a new federal model centered on encampment enforcement, compulsory treatment and institutionalization. That would be a radical change for Los Angeles, which has historically used about 90 percent of its Continuum of Care allocation for permanent housing, including rent subsidies and supportive housing for people who might otherwise return to the streets.
The administration initially sought to limit permanent housing renewals to 30 percent of a region’s funding. After courts blocked that effort, HUD issued revised rules that would protect only 60 percent of existing projects from the national competition. California and other states are challenging those restrictions in a separate lawsuit.
This is not simply a disagreement over whether treatment should be available. Housing First provides people with stable housing without requiring sobriety, employment or participation in treatment as a precondition. Mental health care, substance-use treatment and other services can then be offered from the stability of a permanent home.
The Trump administration is advancing a more punitive model. A 2025 executive order directs federal agencies to favor jurisdictions that enforce prohibitions on camping, loitering and public drug use. It calls for moving unhoused people into treatment centers, assisted outpatient treatment or other facilities and seeks to expand civil commitment. The White House has explicitly promoted long-term institutionalization as a means of restoring public order.
We’re seeing that same shift here on the Westside of Los Angeles, where Councilmember Traci Park has asked the city to study criminal-background checks, behavioral-health and violence-risk assessments before placement in permanent supportive housing, separate programs for people deemed high risk and heightened security requirements. At a Venice community meeting, she called Housing First a “failed social experiment” and threatened to pull future funding from providers that fail to meet new performance expectations.
The logic behind Park’s proposal is similar to HUD’s funding rules, in that access to stable housing becomes more conditional, while people with the greatest needs can be routed into more restrictive settings. On the Westside, that approach sits alongside the Councilmember’s expansion of anti-camping zones and vehicle-dwelling restrictions. As local critics have argued, the same enforcement system that produces police contacts and criminal records can then use those records to create new barriers to housing.
LAHSA’s financial and administrative failures are real. Auditors have documented incomplete financial records, late payments to providers, inadequate contract monitoring, uncollected advances and substantial underspending. Those findings give the CoC, city and county legitimate reasons to reconsider which responsibilities LAHSA should retain.
But LAHSA’s failures do not automatically give HUD the right to displace the Continuum of Care or use the suspension to impose a more carceral homelessness policy on Los Angeles. LAHSA can be reformed or replaced while the CoC maintains local control of the funding process. This lawsuit is not only about whether a beleaguered agency should remain eligible for federal grants, but also whether the Trump administration can use that agency’s failures to bypass the regional body Congress created, take control of local funding decisions and move hundreds of millions of dollars away from keeping people permanently housed.