Denver — Colorado Attorney General Phil Weiser has joined a multi-state coalition suing the U.S. Department of Housing and Urban Development (HUD), alleging the agency illegally rewrote federal homelessness policy in ways that could force tens of thousands of people out of permanent housing.
Filed Tuesday in federal court in Rhode Island, the lawsuit argues that HUD abruptly altered its long-standing Continuum of Care (CoC) grant program—one of the nation’s primary funding streams for homeless services—by sharply limiting money available for permanent housing and program renewals, and by adding new conditions that states say lack congressional authorization.
According to the complaint, the sweeping changes could destabilize service providers nationwide and cause thousands of people currently in permanent supportive housing to lose their homes. Colorado officials estimate roughly 2,600 residents who rely on CoC-funded programs could be affected.
“These new HUD policies virtually guarantee that tens of thousands of formerly homeless people in permanent housing nationwide will eventually be evicted through no fault of their own,” Weiser said, calling the agency’s move “cruel and callous.”
“Congress designed this program in recognition that homelessness is a crisis that requires immediate stabilization and continuing support to reverse,” Washington Attorney General Nick Brown said. “These changes are designed to trap people in poverty and then punish them for being poor.”
“Ripping away this critical funding is yet another cruel attack by the Trump administration on our most vulnerable Washingtonians,” Governor Bob Ferguson said. “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. Trump is once more playing politics with people’s most basic needs. I appreciate Attorney General Brown and his team fighting this illegal action.”
“People’s homes are not political experiments. The Trump administration’s actions undermine federal law, jeopardize the safety and stability of Washington residents, and will increase homelessness,” said Rep. Nicole Macri (D-Seattle). “I am proud to stand with Attorney General Nick Brown to stop this unlawful and deeply harmful federal policy shift – one that puts thousands of Washingtonians at risk of losing their homes.”
States Say Changes Break With Decades of Federal Policy
For decades, HUD has encouraged a “Housing First” model—providing people with stable housing before requiring treatment or income benchmarks—a strategy widely credited with improving stability and lowering public costs. The lawsuit says HUD’s new approach not only conflicts with that established policy but appears aimed at withholding funds from states that do not adopt approaches favored by the Trump administration.
HUD’s revisions also come as several prior grants expire in early 2026. States say the agency has created a dangerous funding gap by rescinding more than $4 million previously awarded to Colorado for 2025 and by delaying execution of new grants until at least May 2026.
Colorado received more than $43.6 million in CoC funding in fiscal year 2024 to support permanent supportive housing, rapid rehousing, transitional programs, and coordinated entry systems across the state. The state’s Division of Housing submits the annual application on behalf of 54 rural counties, while three regional CoC groups serve metro Denver, Northern Colorado, and the Pikes Peak region.
“These drastic and cruel changes will throw people out of their homes and back onto the streets. These are rules based on memes and sound bites with zero respect or understanding of what it takes to provide safe and stable housing. The Trump Administration cannot make new rules up as they go along, and we’re suing to stop them,” said Attorney General Tong.
“It is with sincere gratitude that I thank Attorney General Tong and our state partners for pursuing this case against the federal government,” said DMHAS Commissioner Nancy Navarretta. “But, it is also with profound disappointment that we must file suit again to ensure safety net services for the people of Connecticut. The proposed changes by HUD would endanger the housing and services of the 2,300 individuals we serve at DMHAS as we enter the winter weather and at critical inflection points in their engagement in services. Further, the policy changes accompanying the funding component would rewind the clock on effective, evidenced-based practices in favor of confinement. We have decades of proof: involuntary treatment and punitive criminal justice approaches drive trauma, not recovery. Connecticut is a national leader on these issues and we cannot endanger the progress we have made through the decades”.
Legal Claims: Violations of Rulemaking Law and Congressional Intent
The coalition of states accuses HUD of violating federal rulemaking procedures by imposing major policy changes without public notice or comment, and of overstepping its authority by adding conditions never approved by Congress. The suit also argues the agency acted “arbitrarily and capriciously” by failing to justify abandoning long-standing policies or consider the consequences of widespread evictions.
“These unlawful policies will force more than 4,000 Marylanders out of their homes,” said Maryland Attorney General Brown. “We’re filing this lawsuit to stop these reckless changes from pushing families onto the streets.”
“The Trump Administration is actively engaging in an illegal effort to hamper the work of organizations that battle homelessness in New Jersey and across our country,” said New Jersey Attorney General Platkin. “HUD’s changes to anti-homelessness grants are not only unlawful, they will cause more homelessness by blocking numerous New Jerseyans from getting access to housing, all in the name of political games. We are taking the Trump Administration to court and standing up for New Jerseyans for whom this could mean life or death.”
“Vermont is experiencing an acute housing crisis that is pushing many of our neighbors into homelessness and housing insecurity, and rather than working with states like ours to address this crisis, the Trump Administration is unlawfully restricting the use of federal funding for housing support,” said Attorney General Charity Clark. “I am suing to preserve this funding stream into Vermont, protect the Vermonters who rely on these grants to access stable housing, and uphold our system of government.”
The lawsuit is led by the attorneys general of Washington, New York, and Rhode Island. Colorado joins a broad coalition including Arizona, California, Connecticut, Delaware, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, Oregon, Vermont, Wisconsin, the District of Columbia, and the governors of Kentucky and Pennsylvania.
HUD has not yet publicly responded to the allegations.
