Michigan Sues Feds To Protect Homeless Funding After HUD Attempts A New Policy Shift
Michigan Attorney General Dana Nessel has joined a multistate coalition to file a lawsuit against the U.S. Department of Housing and Urban Development (HUD), seeking to block new funding rules for federal homelessness programs.
The lawsuit alleges that HUD is trying to bypass a recent court loss by implementing a $1.3 billion “set-aside” for new transitional housing projects. According to the coalition, this move acts as a de facto cap on permanent housing initiatives.
The legal battle comes just one month after Nessel and other state attorneys general won a separate court case against HUD. That previous ruling stopped the agency from placing a direct 30% funding cap on the Continuum of Care (CoC) program, which distributes billions of dollars to local housing and support services.
“This administration’s efforts to injure Michigan’s most vulnerable residents is exasperating,” Attorney General Nessel said. “Time and again, we successfully block Trump’s illegal actions in court, only for his minions to pivot to a different unlawful tactic to dismantle vital services like housing assistance. We are then required to drag them back to court just to protect this basic human need. Trump’s cruelty is the point. There seems to be no limit to how far the White House will go to undermine these programs, but I remain committed to standing up for the people of this state and the federal funding they depend on to survive.”
For over 20 years, HUD has operated under a “Housing First” model, which focuses on placing individuals experiencing homelessness into permanent housing quickly, without prerequisites like sobriety or income thresholds. The lawsuit claims the current administration is actively working to dismantle this model.
According to data from the National Alliance to End Homelessness cited in the lawsuit, the funding redirection threatens the stable housing of at least 97,000 residents nationwide, including thousands of people within the state of Michigan. State officials argue that if these individuals face eviction due to lost federal funding, local and state governments will be forced to handle the fallout.
The legal complaint states that HUD’s new funding notice violates the Administrative Procedure Act. The coalition argues the agency failed to use required public notice-and-comment rulemaking procedures and that the policy change is arbitrary and capricious. The lawsuit asks the court to declare the funding conditions illegal and issue an injunction to stop their implementation.
Nessel is joined in the lawsuit by the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia, as well as the governors of Kentucky and Pennsylvania.