National Alliance to End Homelessness v. HUD (2026)

The U.S. Department of Housing and Urban Development (HUD) has issued a 2026 grant notice that threatens to force 97,000 people back into homelessness. Public Rights Project filed a lawsuit on behalf of five local governments in partnership with Democracy Forward, Santa Clara County, and other partners. The complaint challenges grant requirements that would threaten funding for proven homelessness solutions. We’re asking the court to temporarily block HUD from moving forward and to grant relief to plaintiffs by August 10, 2026.

The case focuses on the Continuum of Care (CoC) grant program administered by HUD. Local governments use CoC funding to help people through permanent supportive housing, emergency shelter, street outreach, and services for people with disabilities and serious mental health needs.

HUD’s actions violate the Administrative Procedure Act and the Constitution. The 2026 notice recycles many of the same unlawful and unreasoned provisions the court already blocked in HUD’s 2025 grant notice. The agency is pressuring grantees to:

• Restrict housing to people who meet specific conditions, such as sobriety, employment, or participation in treatment. HUD falsely portrays any other approach as failing to hold people accountable, even though evidence shows that prioritizing safe housing leads to better outcomes.
• Eliminate harm reduction programs, despite proof that they reduce overdose risk and improve housing stability.
• Promote incorrect and biased stereotypes about who is “self-sufficient” and deserving of housing support, specifically discriminating against people with mental health disabilities, including substance use disorders.

The notice also requires grantees to comply with conditions unrelated to homelessness, including abandoning diversity, equity, and inclusion initiatives; rejecting transgender and nonbinary people’s identities; and helping enforce federal immigration law.

Without congressional authorization, HUD reallocated $1.3 billion intended for grant renewals to new projects in 2026. The notice heavily prioritizes strategies that are likely to exacerbate homelessness and ignores Congress’s directive to fund evidence-backed approaches. 

Since the early 2000s, HUD has used the evidence-based Housing First approach, which prioritizes placing people who are homeless into housing as soon as possible. Then, they are offered treatment for substance abuse or mental health and provided other support. Research shows this approach helps people stay housed and makes communities safer, while also reducing the strain on local government resources. 

If HUD is allowed to proceed, local governments and their community partners will be forced to reduce or even shut down programs, lay off staff, and eliminate stable housing for the people they serve. 

Read the lawsuit.

Update:

On August 7, 2026, a federal court set aside HUD’s 2026 Continuum of Care grant notice in its entirety. This blocks the agency from moving forward with the challenged funding changes. The court found that HUD violated the Administrative Procedure Act by attempting to overhaul homelessness funding without first going through the public notice-and-comment process required by the law. 

The ruling protects local governments and their partners from having to seek critical homelessness funding under the unlawful 2026 notice. Since vacating the notice was sufficient to stop it from taking effect, the court did not address our remaining challenges to the grant conditions. 

Read the ruling.

Update:

On September 16, 2026, the appeals court granted HUD’s request for a stay pending appeal. This blocks the federal court’s previous order that had blocked the agency from making its intended changes to this funding stream. The ruling clears the way for the Trump administration to shift funding from permanent supportive housing programs to temporary housing services.

Update:

On September 21, 2026, the coalition filed an emergency motion asking the appeals court to issue an immediate final ruling on the appeal and send the case back to the district court to review our remaining claims. The appeals court’s stay ruling impacted just one of our many claims for relief, and we plan to continue the fight in the district court.

Read the motion.