Cambridge, Boston Expand HUD Lawsuit as Millions in Housing Funds Remain in Limbo

Cambridge and Boston joined a coalition of cities and nonprofits Monday in asking a federal court to block a new round of Trump administration restrictions on federal housing funding, expanding their ongoing lawsuit over the Department of Housing and Urban Development’s Continuum of Care grant program.

The Continuum of Care program helps fund organizations that provide support and housing services for people experiencing homelessness. In Cambridge, about $3.9 million announced by the program for nine city projects in fiscal year 2025 has not yet been finalized — even as the administration moves to restrict funding again for fiscal year 2026.

The original complaint was filed in December, after HUD told cities the month prior that it would change the competition for Continuum of Care grants and only award one-third of the amount it initially offered for permanent housing services. The plaintiffs alleged that HUD’s changes were unlawful because the new guidelines were announced after a statutory deadline to make changes to the program.

Courts have consistently sided with the affected cities and nonprofits — despite the administration’s efforts to maintain its changes to the Continuum of Care system.

Soon after the original suit was filed, a U.S. District Court judge temporarily blocked the government’s policy. In February, the District Court sided with the plaintiffs again, denying the administration’s motion to lift the injunction. HUD appealed the judge’s decision, but the U.S. Court of Appeals for the First Circuit sided against the administration once again, upholding the block on the funding restriction.

Now, the administration has changed pace, targeting grants for fiscal year 2026 while delays persist on distribution of fiscal year 2025 awards.

HUD announced on June 1 that nearly one-third of available funds for fiscal year 2026 would be restricted only to new projects, which will effectively render some existing projects ineligible for renewal. The administration has also pushed to tie eligibility for grants to compliance with executive orders barring diversity-related programs and support for abortion access.

Monday’s supplemental filing aims to halt the new restrictions and force HUD to finalize delayed fiscal year 2025 renewals.

Cambridge City Manager Yi-An Huang ’05 denounced the administration’s continued efforts to constrain housing funding.

“These changes threaten not only the stability of our residents, but the integrity of a proven, data-driven system that helps people off the streets and into positions where they can succeed long-term,” Huang wrote in a statement about the filing.

In Cambridge, about $3.9 million of the $6.8 million announced for fiscal year 2025 projects has been stalled, which may result in some nonprofits paying expected grants out of pocket while facing delays on reimbursements for “a few months,” according to city spokesperson Jeremy H. Warnick.

The Continuum of Care awards for fiscal year 2025 reach roughly 214 households, Warnick wrote in a statement. If HUD’s funding restrictions for fiscal year 2026 awards stand, the city could see a loss of “upwards of $2 million and an impact on approximately 90 households,” Warnick wrote.

Bay Cove Human Services, which operates two shelters in Cambridge, receives funding from three city Continuum of Care projects. While each of its contracts remains active, delays in grant funding could delay future reimbursement of allocated funds.

“The City cannot issue the new contracts until they receive the grant agreements, so there is the potential for future delay in reimbursement if current contracts end prior to the receipt of the grant agreements,” wrote Sarah Coombs, vice president of addiction and homeless services for Bay Cove, wrote in a statement.

The potential loss in housing funding comes as the city grapples with an expected cut of $3.8 million from the Emergency Housing Vouchers for Permanent Supportive Housing program, which houses nearly 130 formerly homeless residents.

Huang wrote that the city would “remain steadfast” in its commitment to serving its “most vulnerable neighbors.”

“Cambridge will continue to stand with our local, regional, and national partners to defend these life-saving supports and ensure that compassion, evidence, and common sense — not politics — guide our housing policies,” Huang wrote.

—Staff writer Shawn A. Boehmer can be reached at [email protected] and on Signal at shawnb.18. Follow him on X @ShawnBoehmer.