Governor Newsom sues Trump administration for cruel cuts to homeless housing funding that will hurt families

Needlessly putting American families at risk 

Earlier this month, the federal Department of Housing and Urban Development’s (HUD) released new cruel funding provisions in its 2025 Continuum of Care (CoC) notice of funding opportunity. These changes include a number of arbitrary and senseless new rules that will disadvantage and defund housing programs with a proven record of success in addressing homelessness and will have devastating consequences for communities in California and across the country.

Specifically, the federal government is now imposing a cap on permanent housing restricts CoCs to using only 30% of funds for permanent supportive housing and rapid rehousing. Last year, California CoCs were awarded more than $683 million in CoC funding, approximately 90 percent of which went to permanent housing projects. The new rules would gut funding for those projects,  which currently keep tens of thousands of people housed. 

These cuts would not only threaten housing for older adults, families with children, veterans, people with disabilities, transition-aged youth, and people served by Medi-Cal, CalFresh, CalWORKs, and foster care systems — they would also undermine the goals of the California Statewide Action Plan, including reducing unsheltered homelessness and increasing permanent housing placements, housing retention, prevention, and production.

“Under both Democratic and Republican presidents, HUD’s Continuum of Care Program has helped states, local governments, and nonprofit organizations combat homelessness and provide safe, stable housing to our most vulnerable residents. This program has proven to be effective at getting Americans off the streets, yet the Trump Administration is now attempting to illegally slash its funding,” said Attorney General Bonta. “As a result, for the 47th time in 44 weeks, I’m taking President Trump to court. Those caring for our unhoused neighbors need the federal government’s continued support. Absent judicial intervention, the Trump Administration’s actions would only worsen the homelessness crisis.”

Cuts not authorized by Congress

HUD’s cuts put tens of thousands of Californians at risk of losing their homes and access to vital services. These abrupt cuts impact previously funded projects in the middle of a two-year funding cycle. The lawsuit argues that the changes are illegal because they alter funding eligibility without authorization by Congress and are not supported by evidence or reason.

The Trump administration’s actions are contrary to Congress’ stated goals that the funds be used for proven strategies to address homelessness, including California’s Housing First policy and permanent supportive housing programs which have proven successful. These shifts not only threaten existing programs — they jeopardize the braided system of federal, state, and local investments that keep California’s homelessness response viable.

“Permanent and supportive housing is central to addressing homelessness and helping bring stability into people’s lives,” said Business, Consumer Services and Housing Secretary Tomiquia Moss. “The federal government’s sudden and cruel changes to how nonprofits and community organizations can access funding threatens to undo years of progress and puts more than 170,000 people nationwide at risk. Here in California, we’re pushing back on this attempt to deprive vulnerable Californians of a place to call home.”

“The Trump Administration’s proposed cuts would worsen the homelessness crisis by pulling funding from permanent housing and putting tens of thousands of Californians at risk,” said California Health and Human Services (CalHHS) Secretary Kim Johnson. “This would undo years of progress and destabilize our neighbors who finally found a safe place to live and stability. It’s harmful policy that will lead to devastating health outcomes. California will continue championing permanent, person-centered solutions that strengthen, not weaken, our response to homelessness.”

California’s strategy works

President Trump’s cruel policies fly in the face of strategies that are proven to work. From the very first moments of the Newsom administration, the national crisis of housing and homelessness – which were decades in the making – has been addressed with ingenuity, seriousness, and expertise. No other state has devoted as much time and attention to these twin problems – and California is a leader in producing positive results. Governor Newsom is creating a structural and foundational model for America:

✅ Addressing mental health and its impact on homelessness — Ending a long-standing 7,000 behavioral health bed shortfall in California by rapidly expanding community treatment centers and permanent supportive housing units. In 2024, voters approved Governor Newsom’s Proposition 1 which is transforming California’s mental health systems with a $6.4 billion Behavioral Health Bond for treatment settings and housing with services for veterans and people experiencing homelessness, and reforming the Behavioral Health Services Act to focus on people with the most serious illnesses, provide care to people with substance disorders, and support their housing needs.

✅ Creating new pathways for those who need the most help — Updating conservatorship laws for the first time in 50 years to include people who are unable to provide for their personal safety or necessary medical care, in addition to food, clothing, or shelter, due to either severe substance use disorder or serious mental health illness. Creating a new CARE court system that creates court-ordered plans for up to 24 months for people struggling with untreated mental illness, and often substance use challenges.

✅ Streamlining and prioritizing building of new housing — Governor Newsom made creating more housing a state priority for the first time in history. He has signed into law groundbreaking reforms to break down systemic barriers that have stood in the way of building the housing Californians need, including broad CEQA reforms. 

✅ Creating shelter and support — Providing funding and programs for local governments, coupled with strong accountability measures to ensure that each local government is doing its share to build housing, and create shelter and support, so that people living in encampments have a safe place to go. 

✅ Removing dangerous encampments — Governor Newsom has set a strong expectation for all local governments to address encampments in their communities and help connect people with support. In 2024, Governor Newsom filed an amicus brief with the Supreme Court defending communities’ authority to clear encampments. After the Supreme Court affirmed local authority, Governor Newsom issued an executive order directing state entities and urging local governments to clear encampments and connect people with support, using a state-tested model that helps ensure encampments are addressed humanely and people are given adequate notice and support. 

Reversing a decades-in-the-making crisis

The Newsom administration is making significant progress in reversing decades of inaction on homelessness. Between 2014 and 2019—before Governor Newsom took office—unsheltered homelessness in California rose by approximately 37,000 people. Since then, under this Administration, California has significantly slowed that growth, even as many other states have seen worsening trends.

In 2024, while homelessness increased nationally by over 18%, California limited its overall increase to just 3% — a lower rate than in 40 other states. The state also held the growth of unsheltered homelessness to just 0.45%, compared to a national increase of nearly 7%. States like Florida, Texas, New York, and Illinois saw larger increases both in percentage and absolute numbers. California also achieved the nation’s largest reduction in veteran homelessness and made meaningful progress in reducing youth homelessness.