Why Should Delaware Care?
New federal changes are threatening housing for hundreds of formerly homeless Delawareans. A new lawsuit claims that if that funding disappears, they will be forced from those units and strain statewide social services.
A coalition of more than 20 Democratic states, including Delaware, has sued the Trump administration over efforts by the nation’s top housing authority to cut the amount of federal dollars used to fund permanent housing initiatives, something the states contend will leave thousands of people homeless.
At the center of their lawsuit are changes the Department of Housing and Urban Development (HUD) made in November to how states may use grants awarded through the federal “Continuum of Care” program.
HUD’s changes to the Continuum of Care grants include a major reduction in the percentage of federal dollars that states can use to fund permanent housing programs, which are meant to help people find housing stability, from nearly 90% down to 30%, according to the lawsuit.
Delaware received $11.9 million in Continuum of Care grants last year to fund housing assistance and rapid re-housing programs. Nationwide, the program awarded $3.6 billion to states in 2024.
The director of Delaware’s State Housing Authority, Matthew Heckles, said in court documents that at least 300 housing units funded by the program would be “eliminated” if the changes are upheld.
“That means at least 500 Delawareans, including children, survivors of domestic violence and those with disabilities, will be rendered homeless,” Heckles said in the documents.
A press release from Delaware officials issued on Friday said the state also expects to lose $8 million of its funding because of the changes.
Heckles said in the press release the changes will “force” the state to decide that “some individuals’ housing, and, indeed, their lives, matter more than others.”
“The proposed plan from HUD is a punch in the gut, given the work that we’re doing to help Delawareans – many of whom are children – fight homelessness,” Heckles said in the release.
The lawsuit, filed on Nov. 25, contends that the reductions to the program are unconstitutional and jeopardize those who were formerly homeless, but have since found stable housing. It also said the changes to funding “would shift significant costs to other public services.”
“HUD has adopted new policies that threaten to cancel thousands of existing projects, require providers to fundamentally reshape their programs on an impossible timeline, and essentially guarantee that tens of thousands of formerly homeless individuals and families will be evicted back into homelessness,” the lawsuit said.
The complaint also alleges the new funding application discriminates against states “whose approach to homelessness differs from this administration’s,” arguing those that don’t enforce public camping bans could lose points on their applications.
HUD’s new Continuum of Care grant changes stem from a recent executive order from the White House, directing the agency to end support for “housing first” policies as part of a broader effort to reduce homelessness across the nation.
The National Alliance to End Homelessness defines housing first policies as offering permanent housing to those who are homeless in an effort to grant stability so they can address other issues contributing to their homelessness.
“The primary thrust of the Anti-Homeless Order is an effort to expand civil commitment of those experiencing homelessness – to incentivize states and local governments to adopt a ‘maximally flexible’ approach to locking up people who lack a safe or reliable place to sleep,” the complaint said.
The states asked Mary S. McElroy, a federal judge in Rhode Island, to declare that the changes are unlawful and unconstitutional. They also asked McElroy to prevent HUD from fully implementing the changes and restore the old funding policies.
Federal attorneys have not filed any response to the case yet.
On Sunday, a HUD spokesperson said the department stands by its new grant model and that it will defend itself from “this meritless legal action.” The spokesperson also said HUD would reward programs that have shown “real success and accountability” with more funding.