In a move that could significantly cut permanent housing funding for those in homelessness, the Department of Housing and Urban Development has temporarily revoked a controversial policy change.
Politico reported that HUD withdrew the notice of funding opportunity about 90 minutes before a Monday afternoon court hearing regarding two lawsuits challenging its recent changes to the Continuum of Care program.
One lawsuit is from a coalition of 21 attorneys generals and governors and another is from a group of 11 local governments and non-profit organizations.
Politico said that according to a court filing, HUD rescinded the policy change “to assess the issues raised by Plaintiffs in their suits and to fashion a revised [notice of funding opportunity].”
Change Lowers HUD Continuum of Care Funding
The lawsuits challenge a policy change by HUD Secretary Scott Turner mandating that only 30 percent of the agency’s Continuum of Care funding can be used for permanent housing, down from about 90 percent.
Politico said the program provides money to local organizations and agencies to connect people experiencing homelessness to housing and resources. Politico was first to report the policy change would move most of the funds to temporary transitional housing assistance with some work or service requirements.
The new conditions imposed on the program would also give HUD the ability to restrict funding for organizations that acknowledge the existence of transgender or nonbinary individuals, Politico reported.
The notice’s withdrawal shortly before Monday’s court hearing surprised U.S. District Judge Mary S. McElroy, who said she wasn’t aware of the development, Politico said.
“This sort of haphazard approach to administrative law is the problem,” said McElroy, who was nominated by President Donald Trump in 2019 after an initial nomination by former President Barack Obama expired.
Policy Shift Took HUD Employees by Surprise
“You can change the policy all you want but there’s a mechanism for doing so and it’s not doing things an hour before court and it’s not doing some of the things that have been done in these cases,” McElroy said during the hearing. McElroy ordered the government to submit new arguments by next week addressing the change.
A HUD spokesperson said the agency will reissue the funding notice “as quickly as possible with technical corrections.”
“The Department intends to make resources available in a timely manner so grantees with measurable results can continue to support vulnerable populations. The Department remains fully committed to making long overdue reforms to its homelessness assistance programs,” the spokesperson said in a statement.
Politico said that HUD employees were expected to work this week to open the application process under the new funding requirements. The policy change being withdrawn caught those employees by surprise, according to two agency employees granted anonymity to discuss internal communication, Politico said.
