Resident Johnny Nielson walks through the DignityMoves tiny home village in downtown San Francisco, on Oct. 3, 2023. The program provides interim supportive housing to individuals experiencing homelessness. (Loren Elliott via CalMatters)

SACRAMENTO, CA., 7/3/26 — California scored another win against the Trump administration in their battle over how to address the homelessness crisis here and nationwide.  

A federal judge this week shot down the federal Department of Housing and Urban Development’s 2025 attempt to divert money away from permanent housing and instead fund temporary shelters and programs that require sobriety. But the judge stopped short of banning the Trump administration from making such changes in the future. 

“The federal court’s decision to reject the Trump-Vance Administration’s attempt to disrupt essential housing services for people experiencing homelessness, including families, seniors, veterans, and people with disabilities, is both appropriate and just,” Renee Willis, chief executive of the National Low Income Housing Coalition, wrote in a news release.  

In November, the Department of Housing and Urban Development said jurisdictions applying for about $4 billion in federal Continuum of Care funding can’t spend more than 30% of it on permanent housing – a move that would result in a significant cut to the type of long-term housing that for years has been a cornerstone of the fight against homelessness. 

Last year, California communities spent about 90% their share of that money on permanent housing.  

A group of states, including California quickly sued. San Francisco, Santa Clara County and a group of national homelessness nonprofits filed a separate lawsuit. In December, a federal judge in Rhode Island temporarily blocked the changes. In February, Congress ordered HUD to renew grants from 2025 under the old rules.  

This week, U.S. District Judge Mary McElroy partially granted the plaintiffs’ request for summary judgement in both cases. She ruled that the federal agency did not try to foresee the harm its “breakneck” transition away from the country’s longstanding “housing first” model – which prioritizes getting people into housing without first forcing them to seek treatment – would have on the country’s homeless individuals. 

“Overall, the actions undertaken by HUD in attempting to hastily eliminate its housing first approach serve as the hallmark of unreasoned decision making,” McElroy wrote.  

HUD did not immediately respond to a request for comment. 

The ruling wraps up both cases, unless the Trump administration decides to appeal.  

But the fight isn’t over. The Trump administration tried again last month, moving to shift 2026 federal funding away from permanent housing and the housing first framework. Housing advocates tried to challenge that latest shift in the prior lawsuit. The judge rejected that attempt, but welcomed the plaintiffs to file a new lawsuit.  

The housing advocates said they are weighing their next steps. 

This article first appeared in CalMatters here.

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4 Comments

  1. “California scored another win against the Trump administration.” It’s all just a game. Blue Team vs Red Team. Be a cheerleader for your team. Vote for your favorite player in the next election.
    Meanwhile, real people have real problems and need elected leaders to come up with real solutions. Don’t hold your breath waiting. When will voters get tired of all this?

  2. Trump is attacking democracy through every avenue he can, if you can’t see that by now. Minorities, immigrants, the indigent, the “bleeding heart liberals,” environmentalists, people who value U.S. National Parks, educated “elites,” people smarter than him (pretty much everyone)—they are all his enemies, and he’s doing all he can to either get rid of them or silence them. Wake up MAGA suckers. No one is an island, and even you will soon suffer the consequences of your clueless leader’s reckless, narcissistic actions.
    So, if you’re one of those “real people with real problems,” what’s your solution, other than your constant complaints and criticism of Democrats?
    Happy Independence Day.

    1. Are you satisfied with the direction of the country? Yes, mostly. The “real problems” are being addressed one at a time:
      1. Borders over run – Fixed.
      2. Income Tax relief – Fixed.
      3. Iran having a nuclear weapon – Fixed.
      4. NATO countries not paying their share – Fixed.
      5. Oil and Gas Independence – Fixed. (Except liberal California)
      Etc, Etc, Etc. Thank you Trump Administration!
      I dread a Social Democrat administration getting power that would reverse any of it. Now that is a “Real Problem.” (Maybe worse than sleepy Joe Biden Administration.) God Save the Republic.

  3. The Trump administration is generally right in how to handle undocumented immigration and social dropouts. Arrest and deport undocumented criminals, and also anyone who loses their refugee status lawsuit in court. As for the homeless, urge them into rehab programs rather than coddling them with permanent housing where they will continue their anti-social mischief. “Bleeding heart” liberals are feeding the problem with feel-good rather than common sense solutions.

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