Michigan AG Nessel wins lawsuit blocking HUD funding cuts aimed at homeless programs
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LANSING, Mich. (News 10) – Michigan Attorney General Dana Nessel and 20 other states have successfully blocked a federal housing policy change that officials say could have forced thousands of Michigan residents onto the streets.
A federal court in Rhode Island ruled in favor of the coalition, striking down an attempt by the Department of Housing and Urban Development (HUD) to cap funding for permanent housing projects targeted at families experiencing housing insecurity or homelessness.
Advocacy groups estimated that if the funding changes had gone through, at least 97,000 permanent housing residents nationwide—including 3,156 people in Michigan—would have lost their homes.
“Thousands of Michigan residents would have been unlawfully forced onto the streets if the federal administration was left to its own devices, but I am relieved the court has once again stepped in to protect this critical funding,” Attorney General Nessel said in a statement. “We have had tremendous success in our federal actions holding this White House accountable to the rule of law and ensuring federal agencies cannot arbitrarily rewrite the rules at the expense of our most vulnerable.”
The Funding Dispute
For over twenty years, HUD has utilized a “Housing First” model that prioritizes permanent housing programs to address chronic homelessness. However, coalition attorneys argued that the federal administration has actively worked to undermine this commitment through the Continuum of Care (CoC) program.
This ruling is the second major legal victory for the states against HUD this year. In June, a federal court struck down previous attempts by HUD to place restrictions on billions in CoC funding.
Following that legal defeat, HUD issued a new notice of funding opportunity that created a $1.3 billion set-aside for transitional housing projects. The coalition argued this was a backdoor attempt to impose a de facto cap on permanent housing.
The U.S. District Court for the District of Rhode Island agreed, granting critical parts of the coalition’s motion for summary judgment and declaring HUD’s set-aside unlawful.
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