WA leads lawsuit to block Trump's homelessness funding rules
Washington state is leading a new fight to stop changes to federal homelessness funding that would jeopardize housing for thousands of formerly homeless people across the state.
State Attorney General Nick Brown filed a federal lawsuit Tuesday with 21 other states that argues the June funding announcement from the nation's housing agency is unlawful. The new funding rules outlined a significant shift in federal homelessness priorities that could put more than more than $22 million and housing for nearly 1,700 people in King County at risk.
The new federal requirements would limit funding for programs that provide stable, long-term housing to people coming out of homelessness without any requirements for sobriety or income. Historically that has made up 90% of federal homelessness dollars.
The rules released in June would make only about 68% of federal funding available nationally for those programs. The U.S. Department of Housing and Urban Development said it intended to prioritize the rest of the funding - $1.3 billion out of $4.04 billion - for time-limited transitional housing programs and services aimed at making homeless people self-sufficient.
For Washington state, the changes could reduce federal funding by more than $37 million and cut off support for 2,911 formerly homeless people who are now in housing, according to an estimate from the National Alliance to End Homelessness
The impact would be greatest in King County, which has shaped its homelessness system around the strategy being targeted by the Trump administration.
Brown said HUD's proposed changes would only worsen Washington's homelessness crisis. The latest count of homelessness in King County found 18,365 to be homeless in shelters or outside, a 9% increase from two years before.
"We think that the changes that they're attempting to make here will really do some pretty severe damage to people," Brown said.
The states' lawsuit argues that HUD is imposing a "de facto cap" on permanent supportive housing programs despite federal law mandating the agency to renew federal homelessness grants in most cases. It also said HUD should have given notice and the opportunity for the public to comment before making such big changes.
On Friday, a HUD spokesperson responded to the lawsuit in a statement, saying the agency stands by its new funding rules.
Through our 2026 (Notice of Funding Opportunity), we are opening the doors to competition and a balance of approaches, so we fund results, not just the status quo, the spokesperson said.
The Trump administration has been fighting to move federal dollars away from long-term housing programs that follow a strategy known as "Housing First," arguing that it failed because it didn't stop the rise in homelessness.
"Instead, billions of taxpayer dollars were spent while homelessness increased to record levels," HUD Secretary Scott Turner said in a June news release.
HUD made its first big effort to divert a majority of federal funds away from permanent supportive housing last fall. States and local governments, including Washington and King County, quickly blocked that effort in court.
The judge agreed with plaintiffs in that case because HUD tried to change funding guidelines too late in the process, just weeks before funding awards were supposed to go out.
This time is different. HUD made the latest funding announcement following the timeline set by Congress.
But Brown said that even if timing was not an issue, HUD still didn't follow the right process under federal law.
Research has shown Housing First programs are the most effective strategy to keep people in housing, and King County has embraced the model to respond to the region's homelessness crisis. Advocates argue there just hasn't been enough of these housing units to meet the level of need.
Alison Eisinger, the executive director of the Seattle/King County Coalition on Homelessness, praised the lawsuit as the right step to prevent a major loss of funding in the region.
"I'm sorry that public sector lawyers have to be putting so much time into defending the residents of our state and other states around the country, in this way, from our own federal government," she said, "which actually has had a track record of providing incredibly valuable support for people to leave homelessness."
A quarter of funding for permanent supportive housing units in Washington comes from the federal government, according to the analysis from the National Alliance to End Homelessness.
The King County Regional Homelessness Authority is in charge of applying for federal funds on behalf of the Seattle region. A spokesperson said the agency is still pushing ahead with assembling an application by August that meets HUD's current requirements.
HUD is supposed to announce the winners of federal funding at the end of the year.
Note: This story was updated Friday to include a comment from HUD.
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This story was originally published July 9, 2026 at 6:40 AM.