N.C. homeless advocates are still trying to figure out their next steps now that a federal judge has issued a temporary restraining order against U.S. Department of Housing and Urban Development, blocking new eligibility requirements for funding for permanent supportive housing from going into effect.
“We’re still wrapping our minds around what this means for North Carolina,” Samuel Gunter, executive director of the N.C. Housing Coalition, said during a webinar on Tuesday. “The concern, and this is tea leaves reading, is that this a harbinger of what all future COC [Continuum of Care] funding is going to look like.”
The problem started when HUD issued new rules on Sept. 5 that said applicants for funding through its “Continuum of Care (CoC) Builds” program could not be sanctuary jurisdictions for immigrants, adopt inclusive policies for transgender people or take a “harm reduction” approach to illicit drug use.
The National Alliance to End Homelessness and the Women’s Development Corporation in Rhode Island filed a lawsuit against HUD and its Secretary Scott Turner on Sept. 11, challenging the new funding restrictions that require compliance with what the plaintiffs contend is the “partisan agenda” of the Trump administration. They also argue that HUD does not have authority to impose such restrictions on federal housing funding.
“In our constitutional system, Congress controls the purse strings and decides what funding to provide, for what purposes, and under what criteria,” the lawsuits states. “And states and localities decide what policies to adopt and implement in their own local jurisdictions. HUD has transgressed both these bounds. .”
On Friday, Sept. 12, the U.S. District Court for the District of Rhode Island granted a temporary restraining order in National Alliance to End Homelessness v. Turner, et al.
“We welcome the court’s decision to stop a rushed, lawless attempt to make essential funding contingent on a community’s compliance with harmful and unlawful restrictions the Trump-Vance administration is trying to impose,” the plaintiffs said in a news release. “This order ensures that service providers can focus on what matters most: providing safe, stable housing and support to people in crisis.”
Ann Oliva addresses conferees during the National Alliance to End Homelessness annual convention in Washington, D.C. (Photo by Greg Childress/NC Newsline)At stake is $75 million in federal funding for permanent supportive housing, which provides long-term, affordable rental housing and voluntary support services for individuals with disabilities who are experiencing chronic homelessness. Permanent supportive housing is part of the “Housing First” model, which the Trump administration rejects. “Housing First” prioritizes providing immediate housing without preconditions such as sobriety or treatment programs.
The grant is channeled through the federal Continuum of Care Builds program, which provides funding for construction, purchases or rehabilitation of housing units for individuals and families experiencing homelessness, including those living with disabilities.
“When Congress allocates resources like this for federal competition, the intent is that everybody who has a need for these kinds of resources has a fair playing field to compete for those resources, and that it’s based on the need of the community and the quality of the application,” Ann Oliva, executive director of the National Alliance to End Homelessness, said in a recent interview with NC Newsline.
Oliva said the money earmarked for permanent supportive housing is substantial and is not made available often.
“The shortage of housing that is affordable to people with the lowest incomes in this country is massive and we need as much housing as we can possibly get that is affordable to people with the lowest incomes and has supportive services attached to it, which this programs requires,” Oliva said.
Samuel Gunter (Photo: NC Housing Coalition)During Tuesday’s Housing Coalition webinar, Gunter said HUD’s decision to modify the eligibility requiremnts is a “hard pill to swallow” for organizations seeking grant funding, especially when they get notice of the rule changes a week before grant applications are due.
HUD notified Congress Sept. 5 that it planned to issue a notice of funding opportunity, superseding a funding notice issued in May, for the one-time competitive grants for new, permanent supportive housing.
The applications for the grants were due Sept. 12, which means the federal agency would have had 12 business days to review them, select winners and notify Congress before the grants expire Sept. 30.
Democratic Sens. Patty Murray (D-WA) and Kirsten Gillibrand (D-NY) asked the independent Office of Inspector General (OIG) to look into whether HUD violated or deliberately sidestepped federal rules by forcing organizations that help the homeless apply for the same grant money for a third time — just days before the funding is set to expire.
“HUD’s unpredictable and capricious decision-making has put a tremendous burden on local community organizations, requiring staff to apply, reapply, and then reapply again for the same amount of funding — each time with different rules and with less time to apply,” the senators wrote.
The first intent to award the grants was issued in July 2024 during the Biden administration, Gillibrand and Murray wrote. The original plan called for $175 million in awards to address homelessness but was trimmed to $75 million after Trump took office. HUD issued a second notice to award the grants in May, which also forced organizations to reapply.
“Faith-based, nonprofit, and local community organizations work, day in and day out, to support those who fall into homelessness, but HUD is making this already difficult job harder by withholding Congressionally appropriated funds and requiring organizations to jump through excessive hurdles.” Gillibrand and Murray wrote.
The new eligibility requirements could discourage North Carolina service providers from applying for such funding, Gunter said, “because no one would fit the bill.”
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