By JOSE HERRERA | City News Service
The Los Angeles Homeless Services Authority is expected to remain as the lead agency overseeing the county’s homelessness response, and be allowed to access millions in federal dollars to disburse among service providers, as mandated by a court ruling issued today.
The U.S. Court of Appeals for the Ninth Circuit on Thursday ruled to largely deny an appeal filed by the Trump administration over a preliminary injunction that halted their June suspension of LAHSA from accessing federal funding.
A panel of Ninth Circuit judges held that the U.S. Department of Housing and Urban Development failed to show a likelihood of success on the merits regarding its suspension of LAHSA, noting that the timing of HUD’s action threatened to severely cripple the region’s ability to apply for critical federal resources.
Related: LA County moving to take over homeless count, other services relinquished by LAHSA
U.S. District Judge David O. Carter held a hearing on Nov. 18 after filings from the Special Master and a data monitor, said the City of LA had repeatedly delayed providing information needed to verify the city’s homelessness data. Jan. 23, 2024. (Photo by Mark Rightmire, Orange County Register/SCNG)
The court ordered that HUD cannot withhold grant funding that was already approved in 2025 to LAHSA. The federal government must countersign the agreements and release funds according to standard statutory schedules. Additionally, the court acknowledged that with a fast-approach Oct. 14 application deadline for federal funding, LAHSA will remain as the lead agency overseeing four major roles for the L.A. Continuum of Care.
The L.A. CoC is the official regional body that coordinates housing and services to prevent and end homelessness across 85 municipalities in L.A. County. Glendale, Long Beach and Pasadena are excluded as each jurisdiction has separate health departments overseeing their homelessness response.
Within these four roles is the collaborative applicant, which has the responsibility of submitting a consolidated application for federal funding awarded by HUD.
” Our priority has always been keeping frontline services running and ensuring that federal funding reaches our service providers. With the October 14 CoC NOFO deadline approaching, LAHSA is moving at full speed to finalize our region’s consolidated FY2026 application,” LAHSA Interim CEO Gita O’Neill said in a statement. “We look forward to working with HUD to ensure approved FY2025 funds are promptly executed and disbursed. In the meantime, our core work continues — maintaining the data and entry systems providers rely on every day and preparing for January’s 2027 (Point-in-Time) Count.”
Oral argument on the merits of HUD’s appeal of the preliminary injunction is scheduled for Oct. 19 at 10 a.m. at the Richard H. Chambers Courthouse in Pasadena.
Skid Row in Los Angeles on Wednesday, July 22, 2026. The area spans approximately 50 blocks and has the highest density of homeless people in the country. (Photo by Hans Gutknecht, Los Angeles Daily News/SCNG)
A representative for HUD did not immediately respond to a request for comment. Department officials previously encouraged local nonprofits and other organizations to directly apply with them to receive federal funding.
The panel of Ninth Circuit judges affirmed, however, that attempting to force individual providers into an unworkable “Direct-to-HUD” portal would cause imminent, irreparable harm to vulnerable populations and local programs.
In June, HUD abruptly suspended federal funding to LAHSA until officials could show that adequate safeguards are in place to protect taxpayer dollars. HUD is investigating LAHSA’s use of federal funds amid allegations of fraud and widespread mismanagement. LAHSA has received more than $1 billion in federal funds since 2021, including $220 million in 2024.
But last month, U.S. District Judge David O. Carter blocked the suspension decision, finding that the sudden loss of cash would jeopardize housing and services for more than 11,000 people across the region. HUD challenged that outcome in the Ninth U.S. Circuit Court of Appeals.
The panel of Ninth Circuit judges, as part of their ruling, granted a stay only to the narrow extent that the district court’s order could be interpreted as requiring an immediate, premature disbursal of approximately $239 million before those funds would otherwise be due. The panel further directed HUD to proceed under the standard 2026 Appropriation Act schedule.
Last, the ruling affirms that HUD must formally respond to the evaluation of the applicant pool for system CoC roles for fiscal year 2027. The L.A. Continuum of Care is seeking a new entity to serve as their lead agency after LAHSA declined to renew their position.
“This ruling provides greater stability at an important moment for Los Angeles. For the thousands of people experiencing homelessness or working to rebuild their lives, the systems and funding that connect them to housing and services cannot simply stop,” LAHSA Commission Chair Stephanie Graves said in a statement.
“Today’s decision allows that work to continue while the larger issues are resolved. Most importantly, it gives our region the opportunity to keep people housed, help more people find a path home and give people hope,” Graves added.
The ruling came on the second day of a hearing conducted in San Francisco. On Wednesday, the panel of Ninth Circuit judges mainly focused on deadlines for the process for local service providers to apply for federal funding, according to Courthouse News Service. The panel of judges questioned whether HUD gave the L.A. CoC enough time and opportunity to find a replacement collaborative applicant.
Also Wednesday, the L.A. CoC Board advanced a proposal to designate L.A. County as the region’s collaborative applicant in case LAHSA remained suspended from federal funding. While the board approved the proposal, it must be finalized by the L.A. CoC’s general membership, which consists of people and organizations working to address homelessness in the county, with the exception of Glendale, Long Beach and Pasadena.
It was unclear whether the proposal would advance seeing as LAHSA is expected to remain as the lead agency for the time being.
On Sept. 15, LAHSA announced it would not continue as the region’s lead agency on homelessness services starting next year, amid an ongoing legal battle with HUD.
As the lead agency, LAHSA served as the collaborative applicant, oversaw the Homeless Management Information System, conducted the annual point-in-time homeless count, and handled the coordinated entry system.
LAHSA’s decision came amid mounting criticism from the Trump administration and city and county officials, who have accused the agency of mismanaging taxpayer dollars and failing to provide transparency, among other shortcomings.
The agency previously stated its action will not impact its work leading the CoC and supporting the city through the end of fiscal year 2026-27.
Both the city and county of Los Angeles have made it known they are interested in taking over. The city is seeking two of those roles while the county is seeking all four.