HOMELESS SERVICE PROVIDERS across California — and as much as $683 million in federal funding for the state’s most economically vulnerable residents — have been caught up in the Trump administration’s war on “wokeness.”
Beginning earlier this spring, organizations that use federal Continuum of Care Program grant money to provide housing, rental assistance, street outreach and other services to tens of thousands of unhoused Californians started receiving notification from the Department of Housing and Urban Development that those dollars now come with an unusual list of conditions. Grantees would be barred from using the funds to promote “gender ideology,” “elective abortions,” and “illegal immigration,” among other restrictions.
Violating those terms carries a possible financial penalty valued at three times the grant amount and even criminal charges, according to communications the care providers received from the federal housing department. The conditions are part of a broader effort spearheaded in a set of executive orders signed within hours of his inauguration to purge the federal bureaucracy and federally-funded programs of “illegal DEI” and “gender ideology extremism.”
For the charities, faith-based organizations, public housing authorities and local governments that accept these grants, the new conditions present a dilemma. They can agree to terms, hopefully keeping themselves out of the administration’s crosshairs but, some service providers say, potentially undercutting their ability to help California’s most vulnerable by doing so. Or they can fight back, and risk a costly legal battle, a potential loss of funding and the possible ire of a president with a penchant for political retaliation.
Santa Clara and San Francisco counties have opted for the second path.
In May, the two counties joined a lawsuit against the Department of Housing and Urban Development alongside 29 other local governments and agencies. The coalition argues that the Trump administration overstepped its constitutional powers in tacking on the culture war-inspired restrictions on spending approved by Congress, that it did so without following the rules that govern regulatory changes and that the restrictions themselves are “unconstitutionally vague.”
The federal housing department said it will comply with the court’s order, according to Santa Clara Public Information Officer Peter Gallotta. But that the county has so far been unable to access the $4.6 million covered by grant agreements and the court order, he added.
The nearly 40-year-old Continuum of Care grant is the largest single source of federal grant dollars aimed at addressing homelessness. In the last fiscal year, more than 200 California local governments, public housing authorities and nonprofits were awarded $683 million. That includes San Francisco with $50 million and Santa Clara County with $34 million.
The restrictions present the providers with the impossible choice of either “accepting illegal conditions that are without authority, contrary to the Constitution, and accompanied by the poison pill of heightened (legal) risk,” the groups wrote in their legal filing, “or foregoing the benefit of grant funds — paid for (at least partially) through local federal taxes — that are necessary for crucial local services.”
Among the restrictions at issue, the federal contract prevents any government agency that receives grant funds from abetting “policies that seek to shield illegal aliens from deportation.”
Such terms made it impossible for Santa Clara County to sign the agreement, said county counsel Tony LoPresti. “There are all kinds of policies that benefit undocumented immigrants, so it’s just not clear what they would wrap into that definition,” he said. “It gives (the administration) an incredible amount of license to interpret that in ways that are completely unconstitutional and unlawful and then to hold that over our heads for purposes of receiving this grant funding.”
So far the “fight back” strategy appears to be working: Last week a federal judge in Seattle ordered the federal government to hold off on enforcing the terms of its conditions on the cities and counties in the lawsuit until the constitutional questions can be resolved at trial.
The local governments “are likely to prevail in their claim” that the federal government has “run afoul of the Separation of Powers doctrine and were acting in excess of statutory authority,” Judge Barbara Jacobs Rothstein wrote in the June 3 order.
The press office at the Housing and Urban Development Department did not respond to repeated requests for an interview.
Signing and hoping for the best
Taking the Trump administration to court is not a strategy available to most Continuum of Care grant recipients.
“I think it’s more important to provide the service,” said Carol Roberts, president and CEO of Lutheran Social Services of Northern California. Her organization signed a contract in the spring for a nearly $630,000 grant to house homeless clients with disabilities in Solano County. “Our program in Solano County houses 22 individuals who were chronically homeless. And it does good work,” Roberts said. “So I’m willing to comply with the contract language, I guess.”
Small nonprofits and charities don’t always have ready access to a lawyer, the money to hire outside counsel or the time and resources to backfill any anticipated grant money that doesn’t come through, said Ann Oliva, CEO at the National Alliance to End Homelessness.
“Most of the nonprofit grantees that we’ve talked to who have received their grant agreements already are signing them, and they’re waiting to see what happens with this bigger lawsuit,” she said. “They’re in a situation where they’ve got to pay somebody’s rent or those folks are going to start getting evicted…Most of them don’t really see much of a choice here.”
As nonprofits, we’re sort of used to signing ridiculous things and then just doing great work.
Vivian Wan, CEO, Abode Services
The injunction in the Santa Clara County and San Francisco case only applies to the plaintiffs in the case. That means that the hundreds of organizations that didn’t join the suit and have signed the grant agreements are now on the hook for complying with its terms.
Not everyone is entirely clear what that compliance looks like.
In Contra Costa County, Christy Saxton worries the new contract language will make it harder to house people in certain vulnerable groups, such as members of the transgender community and undocumented immigrants. The county might have to avoid using federally funded housing vouchers for those people, said Saxton, director of Health, Housing and Homeless Services for the county. That could mean those people remain homeless for longer.
The Trump administration’s definition of “gender ideology,” something the grant agreement forbids groups from promoting, includes anything that perpetuates the “false claim that males can identify as and thus become women and vice versa.”
“That will potentially make it harder for us to find housing for certain people,” Saxton said. “But we are committed. We have other state funding that supports people. We have local funding that supports people.”
Saxton’s department is still waiting for its HUD contract, she said.
Roberts initially wasn’t sure if or how to change the programming at Lutheran Social Services because the contract language is so vague. She and her team had to get their attorney on the phone — twice — to figure it out. In the end, they decided staff will remove pronouns and diversity slogans (such as a colorful hummingbird next to the words “equality diversity inclusion”) from their email signatures. Her organization also folded its Justice, Equity, Diversity and Inclusion Committee into its Trauma Informed Care Committee.
Interestingly, the contract that Roberts was most worried about — one that funds housing for people living with AIDS in San Francisco — arrived without any new language about gender, racial equity or immigration, she said.
‘DEI is Dead‘
While removing pronouns from an email signature may seem like a small price to pay in exchange for hundreds of thousands of dollars in federal funding, some service providers are worried about the broader implications of this shift.
Erika Lee, co-executive director of Venice Community Housing, fears chilling diversity, equity and inclusion efforts will hamper her organization’s work to address the fact that Black people are disproportionately likely to be homeless, both in Los Angeles and across the state.
“There’s no question that our system has discriminatorily excluded folks from housing,” said Lee, whose organization is still waiting for its nearly $820,000 HUD contract. “So to have anti-DEI language in contracts, it’s a step back.”
An earlier version of the grant agreements HUD sent out did explicitly bar grantees from operating “programs promoting diversity, equity, and inclusion.” More recent versions of the contract did not include that language. But both HUD Secretary Scott Turner and the administration have made it abundantly clear where they stand on such programs. “DEI is dead at HUD,” Turner said in a written statement in March.
Sacramento Steps Forward, which leads the county’s continuum of care, recently signed a $40.5 million HUD contract for homeless housing and services and will disburse that money to nonprofits throughout the county.
The continuum of care board on Wednesday voted to scrub references to “racial equity,” “inequities,” “equality” and “diversity” from its governance charter document. That includes removing references to opportunities for diversity awareness and racial equity training.
It also eliminated its Racial Equity Committee, which was made up mostly of members who are Black, Indigenous and people of color, many of whom have been homeless themselves.
The board is replacing that group with a Community Accountability Committee.
Still, other organizations have signed and are moving ahead without making any changes.
Vivian Wan, CEO of Abode Services, was shocked to read what she called the “scary language” in the grant agreement documents for the six rental assistance programs administered by the Bay Area-based nonprofit. But ultimately, she and Abode’s staff decided the stipulations were so vague and so detached from the actual work they do that the language added up to “a lot of bark and not a lot of bite.”
“I wasn’t willing to make a political stand on the backs of formerly homeless people that are receiving the dollars,” said Wan.
Many of the grants that Abode draws on to fund its services include terms that are difficult to monitor, enforce or even understand, she added. HUD’s current list of conditions may be especially “egregious,” but “as nonprofits, we’re sort of used to signing ridiculous things and then just doing great work.”
‘A really significant hit’
Slapping new restrictions on grant funds is just one of an array of current or pending federal policy changes that could upend the way that the federal government provides assistance to people experiencing or at the risk of homelessness. These included reported mass layoffs at HUD, the White House’s proposed 44% reduction in spending on the department and its proposal to provide no additional funding for Continuum of Care grants, instead folding it into another program.
“It’s not just about the words that are in the grant agreement,” said Oliva. “It’s also not having enough people to actually administer these grants. It’s potentially zeroing it out in the President’s budget. What kind of risks does that bring for an organization?”
In Contra Costa County, the proposed cuts would cost at least 3,000 households their short or long-term housing placements or rental subsidies, estimated Saxton, director of Health, Housing and Homeless Services for the county.
“That’s a really significant hit for Contra Costa,” she said.
This story originally appeared in CalMatters.
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