The Los Angeles Homeless Services Authority will continue managing approximately $240 million in federal homelessness funds for now, as a federal judge weighs how and when to transition the grants to a new regional administrator. U.S. District Judge David O. Carter announced during a Wednesday court hearing that a complete handoff cannot happen immediately without risking housing and services for unhoused residents.
Court Review Follows Federal Suspension and Upcoming Transition
The status of the region’s lead homeless services agency remains in flux following a series of legal and administrative clashes. In June, the Trump administration suspended LAHSA from applying for federal funding, citing financial mismanagement. LAHSA responded with a lawsuit, and Carter paused the suspension in August, allowing the agency to submit a $239 million grant application.
Earlier this month, LAHSA’s governing commission voted to relinquish its federal roles next year. Regional officials are currently evaluating applications for a successor. Among the applicants is the newly created Los Angeles County Department of Homeless Services and Housing, which has pledged increased transparency and accountability.
Federal prosecutor Bill Essayli stated at the Wednesday hearing that the Trump administration prefers reaching an agreement over prolonged litigation, emphasizing that stringent anti-fraud measures must accompany any administrative transfer. Carter scheduled an October 27 hearing to serve as a decision-making session regarding the transition timeline and future grant distribution.
Accountability Concerns and Oversight Failures
Carter criticized the broader structure of government oversight during the proceedings, noting that recent instances of alleged taxpayer fund theft stem from a collective failure by both HUD and LAHSA. Federal investigators have charged six individuals connected to Los Angeles homeless service providers in widening fraud probes.
“The watchdog wasn’t watching, and the money got distributed without accountability,” Carter said during the hearing.
While acknowledging HUD’s unease regarding the prospect of sending upcoming funds to an agency currently under federal investigation, Carter maintained that any shift in management must proceed gradually. The judge indicated he hopes to see federal funding transferred to the county by January if it is selected as LAHSA’s successor, while cautioning that premature disruptions could displace vulnerable residents.
Related reading