Trump officials cut federal funds to LA homeless services agency

Housing and urban development department alleges fraud in administration’s latest clash with California

The Trump administration has suspended federal funding to Los Angeles’s beleaguered homelessness agency.

The announcement is the administration’s latest move rescinding funding to California, where Donald Trump has feuded with the state’s Democratic leaders.

In a letter to the Los Angeles Homeless Services Authority, the largest continuum of care (CoC) homeless services agency in the nation, the US Department of Housing and Urban Development (Hud) immediately suspended funds to the agency, pending an investigation citing 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.”

The authority said 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.”

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.

Los Angeles lawmakers have called for changes to Lahsa in recent years, even when they have supported the agency’s mission. In February, Los Angeles county pulled $300m from the agency and redirected those funds to start the LA county department of homeless services and housing.

But the LA county supervisor Lindsey Horvath, who was involved in the decision to redirect Lahsa funding to the county, said the Trump administration’s choice to suspend funding to Lahsa “is for publicity, not for results”.

In a statement, 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 had 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.”

Homelessness was a key issue in the city’s mayoral primary, where voters sent the incumbent mayor, Karen Bass, and progressive city councilor Nithya Raman to a runoff election after Raman edged out Trump’s preferred candidate, the 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.”

She said: “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.”

The Trump administration has cut off funding to California across a variety of programs in the past year, including to a high-speed rail project, sex education programs and public universities, citing their handling of student protests against the war in Gaza.