LOS ANGELES — A federal judge issued a scathing order Thursday blocking a gambit by the Trump administration to take control of federal funding for homelessness programs in Los Angeles County.

In issuing a preliminary injunction, U.S. District Judge David O. Carter found that the U.S. Department of Housing and Urban Development acted arbitrarily and capriciously when it suspended the Los Angeles Homeless Services Authority from managing federal homelessness funds. He set a trial date in February.

The June 11 suspension disqualified LAHSA from submitting an application, due Aug. 26, for about $240 million on behalf of 140 providers of homeless services. HUD said the suspension was necessary, citing negative audits and news reports going back more than a decade. LAHSA filed suit, alleging the abrupt action was a pretext for the Trump administration's intention to impose its own policy short-term housing with an emphasis substance abuse and mental health treatment over the local priority of support for permanent housing.

The decision was the second rebuke of HUD in less than a week, as a federal judge in Rhode Island issued a ruling on Aug. 7 that threw out the agency's 2026 spending plan, finding it shifted funding priorities without a required review.

HUD's public affairs office did not immediately respond to a request for comment.

The Rhode Island ruling nullified the Aug. 26 deadline, removing the emergency from the Los Angeles case but left open the question of whether HUD's suspension of LAHSA would stand.

Carter closed that loop, ordering HUD to restore LAHSA as the master applicant for the funding plan when it is redone. But his ruling, incorporating his own frequent criticisms of LAHSA, left the future of the beleaguered agency in doubt.

He ordered a review to be delivered to his court by Oct. 13 of other agencies that could replace LAHSA as the manager of federally-required homeless programs. In addition to submitting the master grant application, those include maintaining a homeless database and conducting the annual count.

The review would be done by the Los Angeles Continuum of Care, a behind-the-scenes board of community members that fills a congressionally mandated role guiding policy for federally funded programs. The CoC, as it is known, has designated LAHSA to perform the functions mandated in the 2009 Homeless Emergency Assistance and Rapid Transition to Housing, or HEARTH, Act.

Both the Los Angeles County Development Authority and the City of Los Angeles have notified the court of their ability to take on those functions, either individually or jointly. LAHSA was created in 1993 as part of a settlement of disputes between the city and county over homeless services. Over the past decade, as the agency's budget swelled to nearly $900 million with new local, state and federal funds, it also faced increasing scrutiny of fiscal management with audits conducted by the county, city, HUD and the court unearthing inefficiency and poor financial oversight.

Last year, the Board of Supervisors voted to divert about $300 million from LAHSA to a new a county homelessness department. The Los Angeles City Council is also considering pulling back its funding.

Carter harshly criticized HUD for "leveraging a crisis of its own making to wrest power to itself that Congress expressly granted to local communities like Los Angeles, raising the specter of 'whether HUD is punishing Los Angeles, rather than addressing a problem that actually requires remediation.' "

Echoing assertions made during oral arguments last week and in declarations, he concluded that "HUD's rash suspension of LAHSA will significantly harm the public interest.

"Inevitably, this suspension will result in deaths among the homeless and the displacement of over 11,000 unhoused individuals onto the streets and into the neighborhoods of Los Angeles. HUD needed to consider reasonable alternatives when it abruptly decided that the bill for LASHA's dysfunction had come due."

The ruling also ordered HUD to execute agreements with several providers that have been working without reimbursement, in some cases for several months, for contracts awarded earlier this year. In declarations, LAHSA officials said they sent the contracts to HUD but HUD has not executed them, stalling the funding.

Eli Veitzer, CEO of Jewish Family Service LA, one of the 12 organizations Carter listed, was encouraged by the order but remained uncertain if it would provide immediate relief.

"Given the ongoing court battle, it does not guarantee quick resolution to the funding crisis affecting the 12 women and 25 children who fled domestic violence and now rely on Jewish Family Service LA's Hope Transitional Shelter for their safety and survival," Veitzer said in a statement.

Veitzer said the agency's annual $300,000 contract, which expired April 1, covers half of the shelter's operating budget. JFSLA has tapped its emergency contingency funds to keep services running, but that isn't sustainable.

"This ruling is certainly a huge step in the right direction, but until the funding resumes, our ability to continue serving survivors of domestic violence in the future remains in question, and our shelter residents remain at risk," he said.

Although Carter's frequent jabs at local leaders have caused some tension, Mayor Karen Bass and Supervisor Kathryn Barger praised his ruling Thursday.

"I want to thank Judge Carter for the Court's ruling that protects federal resources, keeps services running for people experiencing homelessness, and ensures any transition in governance happens in an orderly, well-managed way," Bass said in a statement.

"But let me be clear: this transition is not optional," she added. "It's necessary. The current system is broken and Angelenos deserve better."

Bass said the city is building the capacity to run its own homelessness system — "operations, data, performance management, compliance, all of it."

Barger, who has been critical of LAHSA, praised the decision as fair and measured in recognizing that "two realities that must be addressed simultaneously."

"The Court's approach aligns with our County's longstanding position that reform should be deliberate and responsible," Barger said in a statement. "Change is necessary, but it must be implemented in a way that does not pull the rug out from under vulnerable individuals who depend on these services today."

(Staff writer David Zahniser contributed to this report.)

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