The embattled Los Angeles Homeless Services Authority sued the Trump administration on Monday to stop it from depriving the region of hundreds of millions of dollars in funding, saying the effort is unwarranted and violates federal laws.
The authority said in its Monday filing that cutting off the funds would put more than 11,000 people — 1,900 of them children — at risk of losing housing or other services.
LAHSA, a joint city-county agency overseen by political appointees, is seeking a temporary restraining order to bar the federal Housing and Urban Development Department from suspending the funds.
“The people who will be harmed by this decision are not bureaucrats,” Gita O’Neill, LAHSA’s interim chief executive, said in a statement. “They are families, veterans, seniors, and formerly homeless Angelenos who rely on these resources to remain housed.”
Asked about the lawsuit, a HUD spokesperson said the agency stands by its effort to “overhaul America’s failed homelessness system, which has relied almost exclusively on permanently warehousing the homeless at exorbitant taxpayer cost while ignoring root causes.”
“As one of the country’s most egregious abusers of taxpayer dollars, LAHSA’s systematic and repeated failures can no longer be allowed,” the spokesperson said in an email. “HUD will fund results, not just the status quo.”
The filing in federal court comes nearly three weeks after HUD officials said they were suspending LAHSA from applying for or receiving federal funds, citing financial mismanagement, fraud and a lack of safeguards to prevent conflicts of interest.
In its 46-page lawsuit, LAHSA pushed back on HUD’s allegations, saying they were not supported by the evidence. Lawyers for LAHSA portrayed HUD’s actions as part of a larger political agenda — elimination of the federally approved “Continuum of Care” system, which makes LAHSA the overarching applicant for most federal homelessness funding across Los Angeles County.
The Trump administration “has made clear it wants to scrap the program entirely in favor of a homelessness policy favoring criminal enforcement, drug treatment, institutionalization and civil commitment of the mentally ill,” the lawsuit states.
HUD officials have said they are barring LAHSA from applying for funds on behalf of the Continuum of Care, which covers 85 cities, including Los Angeles. LAHSA secured $220 million in federal funds for various agencies in 2024 and $944 million since 2021, according to the June 11 letter from HUD Deputy Secretary Andrew D. Hughes.
In the letter, Hughes said his agency had received information that LAHSA “may have committed violations of federal law” while carrying out its obligations as part of its HUD grant agreements.
“HUD has evidence that LAHSA’s repeated false statements and its irresponsible actions and failures, including its lack of financial management, internal controls, and safeguards against conflicts of interest, pose a threat to HUD, the public, and those living on the streets of Los Angeles,” he wrote.
In the letter, Hughes also said that HUD’s inspector general had opened an investigation. Depending on the outcome, the money could be restored or LAHSA could be permanently barred from receiving funds.
LAHSA, in its lawsuit, said HUD has not provided any investigative findings to show violations of the funding agreements. Instead, agency lawyers said, federal officials relied on “a mash-up of old news articles, comments from public officials taken out of context, and findings from routine public audits that included recommendations that were all appropriately actioned.”
Lawyers for LAHSA contend that HUD’s actions violate the U.S. Constitution and override the dictates of Congress, which established many of the processes for distributing federal homeless funds.
The vast majority of the federal funds secured by LAHSA as a grant applicant goes toward permanent housing, agency officials said.
LAHSA, created in 1993, is overseen by a 10-member commission, half from the city and half from the county. Among those commissioners is L.A. Mayor Karen Bass, who has made homelessness a central part of her agenda. Each of the five county supervisors has an appointee.
At stake in the battle between HUD and LAHSA is an array of services affecting some of the region’s most vulnerable residents.
LAHSA oversees the Homeless Management Information System, the federally mandated software that tracks homeless people across the county. It has 8,000 individual users and is used by more than 300 agencies, according to the lawsuit.
HUD’s plan to suspend the funding would prevent LAHSA from using the system to match Angelenos — those on the street and in shelters — with housing and services, the lawsuit said.
LAHSA also oversees the annual “point in time” homelessness count across the county. Agency officials have pointed to the results from those counts as evidence that they have been making steady headway, with homelessness decreasing 4.3% countywide and 5.5% within Los Angeles between 2023 and 2025.
Unsheltered homelessness, which tallies the people living outside or in their vehicles, fell by a larger margin, declining 14% across the county and 17.5% within L.A. during that period.
Despite those numbers, LAHSA’s reputation has been battered by some highly critical assessments.
Last year, a global consulting firm retained as part of a federal lawsuit over the city of L.A.’s response to homelessness found that homeless services provided by LAHSA and the city lacked adequate financial controls, leaving the system vulnerable to waste and fraud.
Several months earlier, county auditors identified lax accounting procedures that resulted in LAHSA’s failure to pay its contractors on time. Even after that report was issued, nonprofit groups with LAHSA contracts continued to report that payments were behind schedule.
Last year, the county Board of Supervisors reached a breaking point, pulling more than $300 million — the vast majority of its funds — out of LAHSA and creating its own homelessness department. City officials have been weighing a similar move in recent months.
