Homelessness Funding: NYS Leads States in Filing Suit; House Speaks Out; Impact Data
(Dec. 2, 2025) A lawsuit filed by a coalition of 20 states on Nov. 25th seeks to block the Trump administration from moving forward with its shift from the current practice of using most homeless assistance funding for permanent supportive housing (PSH) to instead focus the majority of funds on transitional housing. The coalition, led by NYS Attorney General Letitia James, is seeking a court order blocking the “administration’s cuts and illegal new conditions” on the U.S. Department of Housing and Urban Development’s (HUD) Continuum of Care (CoC) program funding.
As reported by LeadingAge, PSH is a successful, evidence-based model of housing assistance that embraces the “housing first” method of getting people housed first and then working with them to address any behavioral or other health issues they may have.
The suit also argues that the plan, issued on Nov. 13th by HUD via the fiscal year 2025 (FY25) Notice of Funding Opportunity (NOFO) competition for the next round of homelessness funding, illegally bans funding for programs that focus on the needs of the Lesbian, Gay, Bisexual, Transgender, Questioning, Intersex, Asexual, and Two Spirits (LGBTQIA2S+) community. LGBTQIA2S+ people experience homelessness at rates significantly higher than their representation in the general population.
On Nov. 20th, in a letter led by U.S. House Committee on Appropriations Ranking Member Rosa DeLauro (D-CT) and HUD Subcommittee Ranking Member Jim Clyburn (D-SC), more than 200 House members voiced shock and concern about HUD’s shifting of the resources. “We believe that the timing of the issuance of the NOFO, combined with major policy changes for the FY25 competition, will cause major disruptions to homelessness services at the local level through the Winter and into Spring 2026, threatening housing assistance for at least 170,000 people currently served through the CoC Program,” the letter says.
To shed light on the numbers of people potentially impacted by the policy change, the National Alliance to End Homelessness published a state and local data tool to show what share of state and local CoC resources have been dedicated to PSH. On average, states use about 88% of their homeless assistance resources for PSH; HUD’s pivot caps this at 30%, leaving existing PSH residents at risk of losing their homes. In NYS, where 35% of all PSH beds are funded by the CoC program, the NOFO may cause 15,389 people to lose housing due to the loss of over $200 million in funding for PSH programs, according to the tool.
While residents served by PSH vary, all PSH residents, by definition, have a disability – such as a mental illness, substance use disorder, or physical disability – and most were experiencing homelessness before they were housed through the program.
Contact: Annalyse Komoroske Denio, akomoroskedenio@leadingageny.org, 518-867-8866