The Trump administration has suspended federal funding to Los Angeles’s beleaguered homelessness agency, marking the latest move in a series of funding cuts to California amid ongoing feuds between Donald Trump and the state’s Democratic leaders.
Funding Suspension and Allegations
In a letter to the Los Angeles Homeless Services Authority (LAHSA), the largest continuum of care homeless services agency in the nation, the US Department of Housing and Urban Development (HUD) immediately suspended funds pending an investigation into allegations of fraud.
“HUD will fund results, not corrupt failure or the homeless industrial complex,” Secretary Scott Turner said in a statement. “Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”
LAHSA responded in an emailed statement to the Guardian: “After initial review, 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.”
Financial Impact and Homelessness Statistics
According to HUD, LAHSA has received “nearly $1bn in taxpayer dollars over the last five years.” About 8% of LAHSA’s budget currently comes from federal funding. Los Angeles has long recorded one of the largest homeless populations in the country. In 2025, LAHSA estimated that 72,308 people in the city were homeless, a decrease from a 2023 peak of 75,518 people.
Local Reactions and Political Context
Los Angeles lawmakers have called for changes to LAHSA in recent years, even when supporting the agency’s mission. In February, Los Angeles County redirected $300m from LAHSA to start the LA County Department of Homeless Services and Housing.
LA County Supervisor Lindsey Horvath, involved in the decision to redirect funding, said the Trump administration’s choice to suspend funding “is for publicity, not for results.” She added: “I have been calling for change and accountability at LAHSA, but if this administration desires accountability, too, they should work with LA County.”
In its letter, HUD alleged that LAHSA violated federal conflict-of-interest rules, misused government funds by paying for empty hotel rooms, and failed to provide documentation verifying housing sites it oversaw.
LAHSA said in a statement: “Local oversight actions have already resulted in strong repairs and reforms to LAHSA’s internal controls, which are accountable and viewable to the public. If HUD’s inspector general actually conducts a fair review of LAHSA’s current and future practices, they will clearly see how our systems now allow us to clearly track the work and investments that have resulted in LA outperforming the nation by reducing homelessness over the last two years.”
Impact on Mayoral Race and City Leadership
Homelessness was a key issue in the city’s mayoral primary, where voters sent incumbent Mayor Karen Bass and progressive city councilor Nithya Raman to a runoff election after Raman edged out Trump’s preferred candidate, Republican reality TV star Spencer Pratt. The close race was decided this week.
The mayor’s office said in a statement: “Mayor Bass, too, has grave concerns about LAHSA and zero tolerance for mismanagement and negligence, which is why she previously directed the city to evaluate how to move away from the agency. Threatening federal funds does nothing to house people and jeopardizes the progress Mayor Bass has led to reduce homelessness for two years in a row, after it only went up in Los Angeles for years. Ultimately people will lose their lives. We urge HUD to work with the city of Los Angeles to provide the necessary funding to reduce homelessness.”
Raman said in a statement: “This action by the federal government is exactly what I have been concerned about, and why I have pushed for years for the city to build the capacity needed to manage our own contracts, programs and dollars. The federal government’s action directly impacts the housing stability of Angelenos who are housed right now from this federal funding, and jeopardizes future housing efforts. The city and county must together meaningfully engage with HUD to ensure we are able to continue serving the most vulnerable Angelenos.”
Broader Context of Funding Cuts
The Trump administration has cut off funding to California across a variety of programs in the past year, including a high-speed rail project, sex education programs, and public universities, citing their handling of student protests against the war in Gaza.
