U.S. District Judge David O. Carter on Thursday temporarily blocked the Department of Housing and Urban Development from suspending the Los Angeles Homeless Services Authority from the region's federal homelessness grant system, preserving roughly $241 million in funding for programs serving more than 11,000 people through the 2026 funding cycle.
Federal judge blocks HUD from removing LAHSA from Los Angeles homelessness funding system
U.S. District Judge David O. Carter on Thursday temporarily blocked the Department of Housing and Urban Development from suspending the Los Angeles Homeless Services Authority from the region's federal homelessness grant system, preserving roughly $241 million in funding for programs serving more than 11,000 people through the 2026 funding cycle.
HUD suspended LAHSA from federal grant programs in June, citing financial mismanagement, conflicts of interest, and concerns about the agency's financial safeguards. After the suspension, HUD proposed allowing individual service providers to apply directly to Washington rather than routing grants through LAHSA.
LAHSA serves as the lead applicant for Los Angeles' federal homelessness grants and helps distribute money to government agencies and nonprofit providers across the region. It also operates systems used to track homeless people, connect them with housing, and conduct the annual homeless count.
Carter did not clear LAHSA of the problems that triggered the federal investigation and acknowledged the agency's history of financial and oversight failures. An independent audit he previously ordered found major weaknesses in financial oversight, including LAHSA's failure to provide documentation involving nearly 2,300 housing sites. Carter allowed federal investigations into potential fraud and misuse of taxpayer money to continue.
At an Aug. 6 hearing, federal attorneys argued LAHSA's record showed the government could no longer trust the agency with hundreds of millions of taxpayer dollars. First Assistant U.S. Attorney Bill Essayli told the court, 'We simply cannot continue to fund failure. We are the federal government, and it is our money.' LAHSA had sued, warning the sudden change could disrupt housing and services.
Carter ordered Los Angeles' regional homelessness board to begin immediately accepting applications from organizations that could take over LAHSA's key federal roles in 2027, with LAHSA also eligible to apply. The board must report back to Carter by Oct. 13, HUD must respond by Oct. 20, and both sides return to court Oct. 27.
- The source does not state whether HUD has responded publicly to Thursday's ruling.
- The source does not state the specific dollar amounts allocated to individual providers or programs within the $241 million.
- The source does not identify which organizations, if any, have already expressed interest in taking over LAHSA's federal roles in 2027.
- The source does not state whether the ruling constitutes a preliminary injunction or a temporary restraining order, or specify its precise legal form.
- The source does not state what financial penalties or clawback mechanisms, if any, apply if fraud investigations confirm misuse of funds.
- The source text supplied appears truncated; some material may be missing.
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