Lansing, Michigan – A federal funding fight with immediate consequences for thousands of Michigan residents has ended, for now, with a court blocking a major change to homelessness programs. The decision preserves support for permanent housing that state officials warned could otherwise disappear.
Michigan Attorney General Dana Nessel said the ruling protects 3,156 people in Michigan and tens of thousands more nationwide whose housing could have been threatened under the Department of Housing and Urban Development’s proposed funding structure.
Nessel and a multistate coalition won the case after challenging HUD’s effort to redirect funding in a way that would effectively limit support for permanent housing projects serving people experiencing homelessness or housing insecurity.
“Thousands of Michigan residents would have been unlawfully forced onto the streets if the Trump administration was left to its own devices, but I am relieved the court has once again stepped in to protect this critical funding,” Nessel said.
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For more than 20 years, HUD has supported permanent housing programs and the Housing First approach through its Continuum of Care program. The current federal administration moved away from that model, leading to a series of legal disputes over how federal homelessness dollars could be distributed.
The latest case followed an earlier victory for Michigan and other states. In June, the coalition successfully challenged HUD over conditions placed on billions of dollars in Continuum of Care funding, including a proposed cap on money available for permanent supportive housing.
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After that restriction was struck down, HUD issued a new funding notice establishing a $1.3 billion set-aside for new projects emphasizing areas including transitional housing. The states argued that the change would create a de facto limit on permanent housing funding.
According to the National Alliance to End Homelessness, the shift put housing assistance for at least 97,000 people nationwide at risk, including the 3,156 Michigan residents.
Nessel then joined another lawsuit challenging the changes. The U.S. District Court for the District of Rhode Island granted key portions of the coalition’s motion for summary judgment, finding HUD’s $1.3 billion set-aside unlawful and preventing the agency from implementing it.
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Michigan was joined by attorneys general from 20 other states and the District of Columbia, along with the governors of Kentucky and Pennsylvania.
The ruling keeps the disputed federal support available for permanent housing programs, preventing the funding change from taking effect while preserving services relied upon by thousands of Michigan residents.