
SPOKANE, Wash. – Washington has joined 19 other states in a lawsuit challenging new federal housing guidelines. The lawsuit alleges that the Housing and Urban Development Department (HUD) is shifting funds from long-term care to shorter-term shelter programs.
Organizations in Spokane rely heavily on federal Continuum of Care funding to maintain long-term housing. Spokane Councilperson Paul Dillon expressed concern over the potential impact of the new rules.
“The city of Spokane and Spokane County is very dependent on the continuum of care funds. These are funds that help keep people indoors. We’re talking about veterans. We’re talking about victims of domestic violence. We’re talking about families and keeping them housed. And if these cuts were to go through, we would see more folks unhoused not less,” said Dillon.
The lawsuit challenges HUD’s new policy of reallocating funds away from permanent supportive housing towards short-term shelter programs, many of which require work or service participation. According to Politico, HUD claims the change is a “long overdue reform” to prioritize wrap-around services, including mental health and substance abuse treatment, alongside temporary housing for up to two years.
Dillon further explained the potential consequences of the policy change.
“Our shelters already are… it’s so hard to keep up with the need. And so this would make the problem so much worse that we’re trying to address. This would be a massive setback that would, I think, create a seismic shift… and we would have far less resources,” said Dillon.
The lawsuit argues that the policy is “unlawful, arbitrary and capricious” and could destabilize local housing systems. It also states that HUD’s requirement for service providers to collect sensitive information from those seeking help is a violation of federal law.
“I think there’s a significant concern if this were to go through that this would completely destabilize our housing programs and that people would be forced out onto the streets. That is a public safety and public health nightmare for individuals that are in need and seeking care,” said Dillon.
Local housing providers, such as Catholic Charities, are still reviewing the implications of the rule for their programs. The case will proceed through federal court, with Washington requesting a federal judge to block the rule before it takes effect.

