Judge Strikes Down HUD's Homelessness Policy Shift Again

A federal judge appointed by President Trump has now ruled against his own administration's homelessness policy for the second time in three months.

U.S. District Judge Mary S. McElroy of Rhode Island struck down the Department of Housing and Urban Development's latest attempt to overhaul a $4 billion homelessness grant program on Monday. She found the agency's move constituted "arbitrary and capricious action."

What HUD Was Trying to Change

The dispute centers on the Continuum of Care Program, which funds shelters, permanent supportive housing, and other homelessness responses nationwide.

HUD's revised funding notice would have shifted resources away from the "Housing First" model toward temporary housing tied to sobriety and treatment requirements.

Judge McElroy wrote that "the administrative record demonstrates HUD's failure to consider the harm caused by the funding gaps it created" when the agency tried to eliminate the Housing First approach on an accelerated timeline.

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A Second Loss for the Same Policy

This isn't the first time McElroy has blocked HUD's efforts here. She issued an earlier ruling in March finding the agency violated the Administrative Procedure Act by making "major, disruptive changes to grants" without proper process, calling the shift a "slapdash imposition of political whims."

The U.S. Court of Appeals for the First Circuit upheld that earlier decision in April, finding HUD's changes would be "immediately destabilizing and disastrous" for communities dependent on the funding.

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HUD's Position

Housing Secretary Scott Turner has defended the policy shift publicly, saying the "Housing First" model "failed Americans by warehousing the vulnerable without results." He argues billions were spent while homelessness climbed to record levels.

HUD's own Point-in-Time census shows homelessness has actually decreased 3% over the past year. In response to Monday's ruling, the agency said it "remains committed to reforming the misguided 'Housing First' approach."

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Who Brought the Case

The lawsuit was filed by a coalition including the National Alliance to End Homelessness, the National Low Income Housing Coalition, and local governments including Boston, Tucson, San Francisco, and Santa Clara County.

A separate 85-page complaint was filed by a group of 21 states and Washington, D.C., led by Minnesota Attorney General Keith Ellison.

Crossroads Rhode Island CEO Michelle Wilcox, one of the plaintiffs, said in a statement following Monday's ruling: "We see every day that stable housing changes lives."

The underlying case remains active, meaning the legal fight over how the $4 billion program is structured is far from finished.

TL;DR

• A federal judge struck down HUD's homelessness policy overhaul for the second time this year

• The ruling found HUD's changes to the Continuum of Care Program were "arbitrary and capricious"

• Judge McElroy, a Trump appointee, previously blocked the same policy shift in March

• HUD Secretary Scott Turner maintains the "Housing First" model has failed

• A coalition of states, cities, and nonprofits brought the original lawsuits

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