What Happened?
Following the immediate suspension of federal funding to the Los Angeles Homeless Services Authority (LAHSA) in June, a House subcommittee recently heard testimony on Sept. 15 about alleged fraud and mismanagement. A day after the hearing, a federal appeals court ruled that the Trump administration can proceed with its homelessness program overhaul.
The Los Angeles Homeless Services Authority (LAHSA) received nearly $1 billion in taxpayer dollars over five years through the Los Angeles Continuum of Care.
The Trump administration has already suspended LAHSA's federal funding and is pushing Congress to redirect billions away from permanent housing programs toward treatment-first and enforcement-focused models. The appeals court decision overturns a lower court order that had blocked changes to Continuum of Care grant funding.
Why Does it Matter to Me?
About 745,000 people experience homelessness on any given night across the U.S., with roughly 250,000 living on the streets, according to a recent federal report. The federal government spends about $8 billion a year to prevent homelessness, and the Trump administration's fiscal 2026 budget proposes cutting $532 million from the Homeless Assistance Grants account.
Trump's fiscal 2026 budget proposal includes no additional funding for the Continuum of Care or Permanent Supportive Housing programs, and it would consolidate the Continuum of Care and Housing Opportunities for Persons with AIDS into the Emergency Solutions Grants program. For the roughly 50,000 people experiencing homelessness in Los Angeles and the 75,000 in surrounding LA County, the shift could change what services are available and under what conditions.
Both Sides, Now
Rep. Tim Burchett (R-TN), who chairs the House Subcommittee on Delivering on Government Efficiency, said he will introduce the Recovery First Housing Act, which would require federally funded housing services to offer substance abuse treatment. Rep. Michael Cloud (R-TX) argued the entire federal funding structure rewards programs rather than outcomes.
Samantha Batko, a senior researcher at the Urban Institute, testified that peer-reviewed research shows Housing First participants are significantly more likely to maintain stable housing than those in treatment-first models. Rep. Melanie Stansbury (D-NM), the subcommittee's ranking member, argued that the most comprehensive bipartisan housing legislation in roughly three decades recently passed Congress, but President Donald Trump declined to sign it.
The National Alliance to End Homelessness and the National Low Income Housing Coalition filed suit challenging HUD's 2026 Continuum of Care funding notice as unlawfully politicized, and a court ordered HUD to vacate that notice.
What Happens Next?
HUD has until Dec. 1 to make awards to Continuum of Care applicants, a deadline the appeals court specifically noted in allowing the overhaul to proceed. Rep. Burchett warned he would use every tool available to secure Los Angeles Mayor Karen Bass's appearance after she declined to testify, meaning Bass could face a congressional subpoena.
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