Attorneys general, state officials sue over 2nd federal attempt to cut permanent housing funds
By
Violet Miller
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Chicago Sun-TimesAttorneys general, state officials sue over 2nd federal attempt to cut permanent housing fundssuntimes.comIllinois Attorney General Kwame Raoul, along with officials from 20 states and Washington D.C., are suing the Trump administration following its second attempt to restrict funding for homelessness housing support.
On June 1, the U.S. Department of Housing and Urban Development tried for a second time to limit money for Continuum of Care-funded permanent housing programs. The move included shifting $1.3 billion in funding for permanent housing programs to those for temporary housing.
Raoul and the coalition of state legal officials said the move, which they argue oversteps the Trump administration’s power and violates federal law, will once again risk housing for tens of thousands of people. In Illinois alone, $60 million in funding would be lost, according to the suit.
The Department of Housing and Urban Development didn’t immediately respond to a request for comment.
In November 2025, the Trump administration proposed sweeping cuts to grant funds for permanent supportive housing to the tune of $3.9 billion, including eliminating money for any organization recognizing the existence of transgender people and removing groups that provide services for people with mental health-related disabilities.
A coalition of more than a dozen state officials, which also included Raoul, sued in the wake of those funding changes, saying it would have put 170,000 people at risk of losing housing. In Illinois, they say it would have impacted housing for 7,500 people as $182 million in funding was threatened.
That coalition of state officials won their lawsuit to keep the funding when a federal judge ruled on June 30 that the administration had overstepped in trying to control the funding allotted by Congress.
Similar arguments made by Raoul and others have led to federal court decisions reinstating $2 billion in federal disaster relief funding, $2 billion for transportation and millions in public health research money. Another federal court decision halted a Trump administration attempt to restrict federal funds to any healthcare institution providing gender affirming care to patients under 19-years-old.
- that shifted funds away from harm-reduction and directed states and cities to remove outdoor homeless encampments and forcefully institutionalize people if they wanted the funds. Advocates and care providers have said the order targets homelessness visibility, not solutions.
Months later, city residents braced for the potential of National Guard troops descending on the city and clearing homeless encampments as they had in Washington D.C., though the troops never deployed to Chicago.
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