NYC Law Department, Coalition of Cities and Counties Announce Lawsuit Challenging Federal Administration's Conditions on Federal Funds Used to House Thousands of At-Risk and Formerly Homeless New Yorkers

May 2, 2025

NYC and National Coalition of Local Jurisdictions Bring Suit Against Federal Government
Conditions Imposed After NYC Was Awarded More Than $53.5 Million in
Funds for Coming Year to Provide Rental Assistance for
Chronically Homeless Households to Reside in Permanent Supportive Housing
Loss of Continuum of Care Funding Would Threaten Housing Stability of
More Than 2,700 NYC Households Residing in Permanent Supportive Housing and Put
Potentially Thousands More at Risk of Losing Their Permanent Housing

NEW YORK – The New York City Law Department today announced that the City of New York, as part of a national coalition of eight local governments from across the nation, filed a lawsuit against the U.S. Department of Housing and Urban Development (HUD), challenging the federal administration’s effort to force cities and counties to agree to unlawful conditions to continue to receive funding for housing assistance programs, putting critical services for some of the nation’s most vulnerable households, including New Yorkers at risk. New York City was awarded more than $53.5 million in Continuum of Care funds from HUD for the coming year that it was planning to provide to nonprofit providers of permanent supportive housing for chronically homeless households that struggle with disabilities, HIV/AIDS, mental health, substance abuse, family trauma, and other challenges. The loss of these funds would directly threaten the housing stability of more than 2,700 households and may put thousands more households in New York City at risk of losing their housing.

“Cities cannot be coerced into adopting federal policies through unlawful conditions on grant funding,” said New York City Corporation Counsel Muriel Goode-Trufant. “The new conditions the U.S. Department of Housing and Urban Development has placed on congressionally-approved and previously awarded housing grants to New York City are illegal under longstanding constitutional and statutory principles. Our legal effort seeks to protect tens of millions of dollars in funding that support vital social services in our communities.”

In response to HUD’s grant notice for the federal Fiscal Year 2024 Notice of Funding Opportunity, New York applied to HUD for renewal of its existing Continuum of Care grants. On January 17, 2025, the New York City Department of Housing Preservation and Development (HPD) was awarded 40 grants for a total of more than $53 million to provide rental assistance to chronically homeless households that struggle with disabilities, HIV/AIDS, mental health, substance abuse, family trauma, and other challenges. These 40 grants begin at different times throughout the year. Three of these grants, covering 169 units of permanent supportive housing for $3,276,841, were set to begin on May 1, 2025, and include the conditions challenged in this lawsuit. 

The lawsuit — led by King County in Washington state and filed in the U.S. District Court for the Western District of Washington — states that new funding conditions added by the heads of federal agencies are unconstitutional and an overreach by the executive branch, which does not have the authority to change conditions related to federal grants without the explicit approval of Congress. Despite this, the Trump administration has added several unlawful conditions to the HUD Continuum of Care grant, which covers federal Fiscal Year 2024 grants that HUD awarded New York City in January 2025. These conditions would impose administration policies related to immigration status, reproductive health, “gender ideology,” and discrimination, among others.

The lawsuit resists efforts by the administration to coerce local governments into accepting these unlawful grant conditions, including a condition that puts at risk three times the amount of the grants based on vague and undefined requirements — further endangering critical services for New Yorkers.

As the lead agency for New York City’s Continuum of Care, the New York City Department of Social Services (DSS) oversees and manages grant applications for HPD and the city’s wide network of providers, which rely on federal funding to operate programs for exceptionally vulnerable populations, including domestic violence survivors, individuals with HIV/AIDS, at-risk youth, and individuals experiencing chronic homelessness.

DSS receives approximately $6.7 million annually to provide administrative support to all of the programs that fall under the Continuum of Care, the renewal of which commences on July 1, 2025. There are 165 programs that are vital to shoring up New York City’s social safety net, which are being renewed by HUD through Continuum of Care funding this year; this includes $127 million for supportive housing, $3 million for transitional housing services, $35 million for rapid rehousing supports, and $1.5 million for supportive services projects. The new provisions tied to the approval of this funding undermine equal access to care for all New Yorkers and jeopardize programs that serve as critical lifelines for thousands of at-risk individuals.

The loss of the Continuum of Care funding for HPD would directly threaten the housing stability of more than 2,700 households residing in permanent supportive housing funded by the Continuum of Care grants. The loss of Continuum of Care funding to DSS could have a broader impact due to DSS’s role coordinating the Continuum of Care and supporting the functioning of all grant recipients, putting potentially thousands more stably-housed households in New York City at risk of losing their housing.

In addition to today’s lawsuit, the coalition of cities and counties will seek a temporary restraining order next week that would block HUD from imposing or enforcing the unauthorized grant conditions.
Joining New York City and King County in filing the lawsuit are the cities of Boston, Columbus, and the City and County of San Francisco; as well as Santa Clara County in California, and Pierce and Snohomish counties in Washington state.

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