LAHSA Sues Trump and HUD

Letters to the Housed by Paul Asplund of SecondGrace.LA | July 21, 2026

LAHSA is suing the federal government over its suspended funding. I read the complaint — a few things stood out, and the people at the center of it aren't bureaucrats.

On June 30 — the same day my last piece went out, the same day that 284 LAHSA workers lost their jobs — LAHSA filed suit in federal court against Donald Trump, HUD, and Secretary Scott Turner (LAHSA v. Trump, Case No. 2:26-cv-07056, Central District of California). I've looked through the complaint, and a few things stood out that I want to talk about. I am not a lawyer, so apologies if I misunderstood something, but I'll do my best to make sense of what I've read.

What Surprised Me

The first thing that jumped out at me was that HUD's suspension letter cited a Los Angeles City Controller announcement about $513 million in unspent funds as evidence of LAHSA's failures. The problem is that announcement was about the City of Los Angeles budget. LAHSA's name doesn't appear in it.

And starting out with a blatant (or at least careless) lie sets the tone for everything else I found.

HUD used a document about the City of LA in a letter designed to impugn LAHSA.

LAHSA's lawyers at Waymaker LLP and Norton Rose Fulbright document this pattern throughout the complaint. The suspension letter is built on old news articles, public statements taken out of context, and findings from routine audits whose recommendations LAHSA had already implemented. The one audit that actually matters for federal compliance — the independent Single Audit that directly evaluates how LAHSA manages federal funds — concluded that LAHSA's finances were in order and that it was in full compliance with its major federal programs (I was surprised by this news, after all I've read about LAHSA). The suspension letter doesn't mention it.

The complaint also documents a "saying the quiet part out loud" moment that doesn't surprise me. A senior HUD political appointee told a LAHSA Commission member in July 2025 that he would recommend no HUD funding come to Los Angeles at all. The decision had already been made a year ago. The fraud investigation, which LAHSA wasn't even aware existed before the letter arrived, came after.

I'll leave the legal arguments to the lawyers. The complaint makes a compelling case that this suspension was a policy decision dressed up as a fraud investigation, and that the evidence HUD cited to justify it doesn't hold up.

This suspension was a policy decision dressed up as a fraud investigation.

Who This Is Actually About

LAHSA released an impact report alongside the lawsuit. These numbers are the ones that matter most to me.

7,545 households are currently housed, sheltered, or receiving services through the federal CoC funding that HUD has suspended. That's 11,423 people. Among them are 1,923 children, 1,627 seniors, 901 individuals in families affected by intimate partner violence, and 89 veterans.

Another 25,398 households are on the waitlist for permanent supportive housing. LAHSA runs the matching system that moves people from that waitlist into homes. If that system shuts down, those 25,000 households don't get matched.

I've written before in this newsletter about LAHSA's litany of problems: payment delays to subgrantees, leadership turnover, governance issues that were real and documented. LAHSA has had to work hard to fix those things, and the complaint acknowledges that work. But none of those problems are what this suspension is about.

The question has never been whether LAHSA is perfect. The question is whether stripping 11,000 people of their housing, in the middle of a funding cycle, with no contingency plan and no evidence of fraud, is something the federal government is allowed to do.

LAHSA's lawyers say it isn't. I think they're right.

The Clock

August 26 is the deadline for LA's 2026 Continuum of Care funding application. LAHSA is the only entity registered and authorized to submit that application on behalf of the LA region. No other organization can be stood up in time to replace it. If the court doesn't intervene before that date, the entire LA CoC could be shut out of the 2026 federal funding cycle entirely — not just this year's operating grants, but the baseline that determines what this region receives for years to come.

LAHSA has asked the court for emergency relief to stop the suspension while the case is heard. The government filed its opposition on July 2. A hearing date has not been set as of this writing. I will update you when it is.

Gita O'Neill, LAHSA's Interim CEO, said it plainly in the press release announcing the suit:

"The people who will be harmed by this decision are not bureaucrats. They are families, veterans, seniors, and formerly homeless Angelenos who rely on these resources to remain housed."

That's the most important sentence in this article.

More soon.

Paul

I am not a legal expert. For full coverage of the legal arguments in this case, I recommend LAist's ongoing reporting onLAHSA v. Trump, Case No. 2:26-cv-07056. The LAHSA impact report and legal filing overview are available at lahsa.org.

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