Arizona Attorney General Kris Mayes has joined a coalition of 20 other plaintiffs in filing a lawsuit against the U.S. Department of Housing and Urban Development (HUD) over recent changes to its Continuum of Care grant program. The lawsuit alleges that HUD’s new policies will significantly reduce support for Americans experiencing homelessness or housing insecurity by limiting access to long-term housing and related services.
According to the complaint, HUD is reducing the proportion of grant funds available for permanent housing and project renewals, while also introducing new requirements for funding eligibility. These include mandates that providers require residents to accept services as a precondition for housing and penalize providers in areas without strict anti-homelessness laws. Plaintiffs argue these changes contradict previous HUD guidance and congressional intent.
Attorney General Mayes stated, “More and more Arizonans are being pushed into homelessness in Donald Trump’s unaffordable economy. These unlawful drastic changes to long-standing HUD policies passed by Congress will push even more into homelessness, straining our local resources and making it harder for providers to serve some of the most vulnerable people in our state.”
The Continuum of Care grants have historically supported local coalitions planning housing solutions for those experiencing homelessness. Providers depend on the consistency of these grants, often pairing them with other funding sources.
HUD has previously followed a “Housing First” model, offering stable housing without preconditions such as sobriety or minimum income requirements—a strategy shown to improve stability and public health outcomes while lowering overall costs associated with homelessness.
Under the proposed rule change set to take effect in 2026, HUD would reduce funding directed toward permanent housing from approximately 90% down by two-thirds. The guarantee for renewal funding would also drop from about 90% annually to just 30%. According to plaintiffs, this could lead thousands nationwide—who currently rely on permanent supportive housing—to lose their homes if projects cannot secure renewed funds.
Additionally, the complaint asserts that HUD plans to withhold funds from applicants who acknowledge trans and gender-diverse individuals or prioritize services for people with mental health or substance-use disorders. It also claims discrimination against localities whose approaches differ from federal administration preferences.
The coalition argues that HUD failed to follow required rulemaking procedures before implementing these changes and did not obtain congressional authorization as required by law. The suit claims many new conditions directly conflict with existing statutes and prior agency regulations.
The legal action was filed in federal District Court in Rhode Island under the leadership of Washington Attorney General Nick Brown, New York Attorney General Letitia James, Rhode Island Attorney General Peter Neronha, along with attorneys general from several other states including California, Colorado, Connecticut, Delaware, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, Oregon, Vermont, Wisconsin; plus governors from Kentucky and Pennsylvania.
