They're Coming Back for the CoC. This Time, They Mean It.

What happens to the continuum — and the people who depend on it? | Photo by Kevin O'Connor / Unsplash

Letters to the Housed by Paul Asplund of SecondGrace.LA

We've been here before. Last November, the Trump administration issued a Continuum of Care Notice of Funding Opportunity that would have rewritten the rules for nearly $4 billion in federal homelessness grants. Advocates sued, courts blocked it, and the 1st Circuit denied the administration's appeal. That case is still working its way through the system.

Now HUD has announced a new NOFO, due out by June 1, that attempts the same thing through a different path. And alongside it, the administration's FY2027 budget proposes eliminating the CoC program entirely.

This is a multi-front campaign to dismantle the infrastructure that funds housing for some of the most vulnerable people in Los Angeles and across the country.

What the CoC Actually Does

The Continuum of Care program provides grants to states, local governments, and nonprofits that fund permanent supportive housing, rapid rehousing, outreach, and services. Here in LA County, it has meant more than $220 million a year flowing into the system. That money keeps landlords paid, keeps lease agreements intact, and keeps thousands of people off the streets who worked hard to get there.

I've written before about what happens when that funding disappears: leases end, evictions rise, and the people we spent years helping get housed cycle back to the street. That outcome — putting people back on the street who had finally found stability — is the worst possible result of any policy failure. And it's exactly what's at risk.

The ESG Swap: A Downgrade Dressed as Reform

The administration's FY2027 budget request uses language that sounds almost reasonable: "instead of continuing to spend billions on failed policies," it proposes eliminating the CoC and redirecting $4 billion into an expanded Emergency Solutions Grant program.

What that framing leaves out matters a great deal. ESG is a far simpler, far less accountable block grant. It was designed for emergency shelter and short-term stabilization, not permanent supportive housing. It has none of the community oversight structures that CoC boards provide. The administration is calling CoC's local boards "unaccountable," which is remarkable given that those boards are made up of service providers, people with lived experience of homelessness, local government representatives, and community members. ESG has no equivalent requirement.

"The land of the unknown continues to be operating in full swing." — Marcy Thompson, National Alliance to End Homelessness

Swapping CoC for ESG is a tacit structural downgrade that removes the accountability mechanisms while keeping the budget line item intact, so the administration can say it's still funding homelessness services while fundamentally changing what those services are and who controls them.

Congress Already Said No. HUD Is Going Around Them.

This is the part of the story that deserves more attention than it's getting. The fiscal 2026 Transportation-HUD appropriations law explicitly rejected HUD's new approach. Congress funded the CoC program as it existed. HUD is now using a new NOFO — a funding notice rather than legislation — to implement the policy changes that Congress refused to authorize.

This has become yet another separation of powers story, and it has implications that go well beyond housing policy. We've watched federal action override local community needs before. When an executive agency continues pushing policies that the legislative branch has already rejected, the question stops being about whether Housing First works and starts being about who gets to decide how federal money is spent.

June 1 and What Comes Next

The new NOFO drops by June 1. The FIFA World Cup begins June 11. Over the next several weeks, the federal government will be rewriting the rules for homelessness funding while Los Angeles is trying to present itself to the world as a city that works.

The timing is worth sitting with. The encampments that remain visible across the city are already a source of intense political pressure. The World Cup and the 2028 Olympics have created a deadline that isn't really about housing — it's about optics. And now HUD is poised to reshape what tools local providers have available to respond.

What we don't know yet is what the new NOFO will actually require. HUD says it wants to "optimize self-sufficiency" and invest in transitional housing and outpatient addiction treatment. Those aren't inherently wrong goals. The problem is using them to replace permanent supportive housing rather than complement it, and using a funding notice to do what Congress declined to authorize legislatively.

What This Means Locally

Organizations across LA County are operating in what Marcy Thompson, vice president of policy at the National Alliance to End Homelessness, described simply as "the land of the unknown." Grants are expiring, payments are delayed, and programs are in limbo. Staff are being asked to continue delivering services without knowing whether the funding behind those services will survive the next funding cycle.

The people navigating this uncertainty are outreach workers, case managers, and housing navigators who show up every day for neighbors still on the street. The institutional chaos lands hardest on the people closest to the work.

We've redirected HHAP, Measure A, and general revenue before to fill federal gaps. We can do it again. But there are limits to how many times we can shuffle funding sources before real programs start to collapse, and those limits are closer than anyone wants to admit.

The June 1 NOFO will tell us a great deal about how far the administration intends to push. Until then, the most useful thing any of us can do is pay attention, support the organizations doing legal and advocacy work to protect these programs, and stay connected to what's actually happening on the ground in our own neighborhoods.

More soon.
Paul
Letters to the Housed | secondgracela.substack.com | SecondGrace.LA

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