Judicial and Legislative Actions
On Thursday, March 6, a second federal judge in Rhode Island blocked the Trump administration’s attempt to freeze funding for federal grants, loans, and financial support. The ruling, secured by attorneys general from 22 states and Washington, D.C., follows a similar decision from a different federal judge, halting what was described as an unconstitutional pause on up to $3 trillion in funding. The administration is expected to appeal, as the White House insists the freeze remains in place despite rescinding the original directive.
In legislative issues, on Tuesday, March 4, Representatives Scott Peters (CA-50), Suzanne Bonamici (OR-01), and Sara Jacobs (CA-51), along with 52 colleagues, urged the Department of Housing and Urban Development (HUD) to process and distribute Fiscal Year 2024 Continuum of Care (CoC) grants. The bipartisan call to action is aimed at ensuring local providers can continue vital homelessness response and prevention work without unnecessary delays.
Additionally, the National Council of Nonprofits (NCN) has filed a motion seeking to extend the court’s Preliminary Injunction to include CoC grants, preventing further freezes on these essential funds.
Potential Challenges
House Speaker Mike Johnson released a seven-month stopgap funding bill. While the bill would maintain FY24 funding levels with small increases for some key HUD programs, the bill would cut $13 billion in domestic spending, reduce the Community Development Fund by $3.29 billion, and repurpose HUD’s Homeless Assistance Grants funding, creating a $168 million shortfall. It also does not include new disaster recovery funds or address the debt ceiling. The bill requires bipartisan support to pass before the March 14 deadline.
Meanwhile, HUD’s cancellation of contracts with two national nonprofits, The Local Initiatives Support Corporation and Enterprise Community Partners, has placed $60 million in affordable housing funds in limbo. The funding, intended for small community-based projects, was halted over alleged noncompliance with an executive order targeting diversity initiatives. Without these grants, critical housing developments face delays, and local providers struggle with uncertainty over future investments.
Sources:
- Associated Press: Second federal judge extends block preventing the Trump administration from freezing funding and Trump administration throws hundreds of affordable housing projects into limbo after contract cuts
- National Low Income Housing Coalition
- National Alliance to End Homelessness
- House Representative Scott Peters
- Court Listener: National Council of Nonprofits v. Office of Management and Budget (1:25-cv-00239)
Sacramento Steps Forward will continue monitoring developments and sharing updates with our partners.