Four fair housing organizations sued the Department of Housing and Urban Development and the Department of Government Efficiency on Thursday, faced with the sudden rescission of approximately 30 million in critical grant dollars.
The organizations — in Massachusetts, Idaho, Texas and Ohio — were among 66 housing rights nonprofits across the country that received a letter in late February informing them that key funding used to help individuals fight eviction and seek redress for discrimination had been cut off. The lawsuit was brought on behalf of a proposed class of the groups.
According to the lawsuit filed in Massachusetts district court, HUD and DOGE, operating at the direction of President Trump, made an “egregious overstep” when they canceled dozens of grants connected to the Fair Housing Initiatives Program. The program and the grants distributed to state and city organizations are used to enforce the federal Fair Housing Act that prohibits discrimination in housing based on race, ethnicity, religion and other factors, like gender identity and disability.
Most fair housing complaints in the United States are handled by local housing organizations: In 2022, these groups received more than 33,000 complaints.
Local fair housing organizations generally have annual budgets of less than $1 million, and the grants account for a significant portion of their revenues. The groups say they had no warning that the funding would end abruptly. “The impact of these dollars is concrete and profound,” the complaint reads.
“It’s how they pay their bills,” said Yiyang Wu, a lawyer at the civil rights law firm Relman Colfax, which is representing the fair housing organizations. “It’s their bread and butter.”
In its letters, HUD told the organizations that each grant being canceled “no longer effectuates the program goals or agency priorities.”
HUD and DOGE launched a joint task force they said would eliminate waste, fraud and abuse last month. In a news release announcing the task force on Feb. 13, HUD Secretary Scott Turner said that under his leadership, the department would be “detailed and deliberate about every dollar spent” to “better serve the American people.”
The department has made widespread slashes to initiatives that it said promoted diversity, equity and inclusion programs. “DEI is dead at HUD,” Mr. Turner has repeatedly said in recent weeks.
Since receiving notice of the funding cuts, some fair-housing groups are now leaning on their reserves to pay bills. Others are already struggling.
The San Antonio Fair Housing Council, which previously had four full-time staff, three part-time staff and three per-diem workers, was forced to lay off more than half of its work force.
The Massachusetts Fair Housing Center was forced to turn away clients, including a domestic violence survivor who was facing displacement from her temporary shelter. And the Intermountain Fair Housing Council, which serves the entire state of Idaho, has been forced to “narrow its service area, leaving 10 counties without any eviction prevention or fair housing services,” the lawsuit reads.
The grant termination, said Lila Miller, another lawyer at Relman Colfax, was illegal because the grants had been allotted by Congress. She said Congress has not authorized DOGE to direct another agency’s operations.
“Congress makes the law and Congress sets the bounds of agency action,” she said.