The Trump administration has barred Los Angeles County's primary homelessness agency from accessing federal funds while it investigates allegations of "wanton mismanagement of public funds." The move jeopardizes nearly $200 million that local service providers rely on to assist California's largest homeless population.
In a letter sent Thursday to the Los Angeles Homeless Services Authority (LAHSA), the U.S. Department of Housing and Urban Development (HUD) accused the agency of fraud and failing to reduce homelessness.
According to HUD, LAHSA failed to record when individuals left motel housing, misused government money by paying for services covered under another contract, and could not provide documents proving the existence of homes it was responsible for.
LAHSA has been suspended from participating in federal funding competitions until HUD's Office of Inspector General completes its investigation. "Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve," HUD Secretary Scott Turner said in a news release.
The Los Angeles Homeless Services Authority, a joint city-county agency, has led the region's fight against homelessness since the 1990s. However, two critical audits found it was not properly tracking spending or outcomes, prompting the LA County Board of Supervisors to withdraw its funding and redirect it to a newly created county agency.
The agency's head, criticized for signing contracts with a nonprofit tied to her husband, resigned, and in April, LAHSA laid off 284 people.
Despite this turmoil, LAHSA remains the official lead homelessness agency for the LA region and receives federal homelessness funds on behalf of the city, county, and nonprofit providers. Last year, it received nearly $200 million through the Continuum of Care program, the largest federal source for homelessness funding.
Blocking that funding could reverse progress by putting thousands of formerly homeless individuals back on the streets, LAHSA warned. "This appears to be a blatant attempt to pull yet more resources from Los Angeles, a city they have targeted time and again, when it is clear that LAHSA has either corrected or is in the process of correcting nearly all of the issues raised," spokesperson Ahmad Chapman said in a statement.
The authority is fixing its internal controls, modernizing its financial system, and improving its tracking, Chapman added. Its immediate priority is "to explore all available options" to ensure federal funds continue flowing to Los Angeles.
"Ultimately people will lose their lives," he said. "We urge HUD to work with the City of Los Angeles to provide the necessary funding to reduce homelessness."
Homelessness in LA County had recently shown improvement, with the number of unhoused people dropping in 2024 and 2025, according to the point-in-time count. As of last year, an estimated 72,000 people were unhoused in the county.
Even so, the Trump administration has been pushing to overhaul how Los Angeles and other California cities address homelessness, favoring temporary shelters over permanent housing and requiring sobriety in housing programs.
Earlier this month, HUD opened this year's Continuum of Care application with these changes. The National Alliance to End Homelessness estimates the changes could cost California nearly $238 million in permanent housing funding, potentially leaving nearly 15,000 people without homes.