$240 Million and 11,000 People: A Federal Judge Weighs Who Applies for LA's Homeless Grants

The U.S. Department of Housing and Urban Development suspended the Los Angeles Homeless Services Authority from grant activity in June 2026. A ruling in Rhode Island then erased the application deadline entirely.

A federal judge in Los Angeles is deciding whether the Los Angeles Homeless Services Authority can apply for $240 million in federal homelessness funding this year, and, if it cannot, which agency would apply in its place, according to LAist's reporting on the case. Local homelessness officials told LAist that homeless services providers across Los Angeles County rely on that annual funding to pay for shelter beds, housing and services for 11,000 people.

The money is in limbo because the U.S. Department of Housing and Urban Development suspended the authority, known as LAHSA, from grant activity in June 2026, citing mismanagement. LAHSA sued the Trump administration and asked the court to block the suspension while the larger case proceeds. U.S. District Judge David O. Carter is expected to rule soon on whether to temporarily block the suspension and let the agency keep receiving federal money and performing its other duties before trial.

What the agency does

LAHSA is a joint powers authority created by the city and county of Los Angeles to coordinate and manage public homelessness funds. It applies for and distributes federal funding for the entire regional homeless response system, including other local government agencies and hundreds of nonprofit providers across 85 cities within Los Angeles County, LAist reported.

That applicant role was delegated to LAHSA by a separate federally mandated body, the L.A. Continuum of Care, which is run by a 21-member board and sets regional funding priorities. Continuums of Care are required nationwide to apply for and receive federal money.

The two arguments

The federal government says the agency failed to meet federal oversight requirements and points to longstanding concerns about its financial management and accountability. "We simply cannot continue to fund failure," first assistant U.S. Attorney Bill Essayli said in court, in remarks reported by LAist. "We are the federal government, and it is our money."

LAHSA's attorneys and local officials dispute that the agency violated any federal grant requirement and call the suspension abrupt and politically motivated. "The actions will hurt the unhoused in Los Angeles and all of the stakeholders that service them — and that is the whole point," said Keri Curtis Axel, an attorney representing LAHSA, at an August 6, 2026 hearing in Los Angeles.

Shayla Myers, an attorney for the L.A. Continuum of Care, which intervened in the suit, told the court that "HUD chose instead to drop a bomb into the region and disrupt the most stable part of the homeless services response system," per LAist.

The deadline that disappeared

Until the week of the hearing, the application was due August 26, 2026, pressure that pushed Carter toward a quick decision. A day after the August 6, 2026 hearing, a federal judge in Rhode Island struck down HUD's grant regulations for this year's competition, and the deadline ceased to exist. The application process will start over once the federal government publishes new regulations later this year.

HUD had proposed opening applications so providers could seek money directly, bypassing LAHSA, but said it would wait for an order from the U.S. District Court in Los Angeles. At the hearing, Carter described wanting to avoid "the stark, god-awful situation of 11,000 people hitting the streets" if none of the region's federal homelessness grants came through this year. He said he was interested in setting a trial date as early as February 2027.

City and county officials have offered to submit the application in LAHSA's place. Carter questioned whether they could do it on short notice.