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Judge orders Trump admin to release hundreds of millions in NYC housing, transit funds
By
David Brand
Published Jun 5, 2025
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Michael M. Santiago/Getty Images
By
David Brand
Published Jun 5, 2025
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A federal judge this week ordered the Trump administration to unlock hundreds of millions of dollars in housing and transportation funds for New York City that were being withheld until the recipients agreed to conditions prohibiting "gender ideology,” diversity initiatives or sanctuary immigration policies.
The U.S. Department of Housing and Urban Development and the U.S. Department of Transportation held up the previously approved grants for low-income housing operators, homeless service providers and local transit projects unless they agreed to the new terms, as Gothamist first reported in March.
Last month, New York City joined seven other cities and counties in a lawsuit challenging the constitutionality of the revised terms, which the federal agencies based on a series of executive orders signed by President Donald Trump earlier this year. An additional 23 cities and counties joined the lawsuit last month.
In a ruling Tuesday, federal Judge Barbara Rothstein ordered the housing and transportation agencies to drop the conditions while arguments in the lawsuit proceed. The case is still in a preliminary phase, but Rothstein said that the new terms are likely to be found unconstitutional under laws governing the separation of powers.
“Homeless assistance and transit grants are essential tools in addressing these urgent community needs,” she wrote in a decision granting a preliminary injunction. “Congress has consistently affirmed their importance by repeatedly authorizing these grants, underscoring the federal government’s vital role in supporting local governments as they confront the challenges of homelessness and maintenance of critical transportation infrastructure.”
The cities and counties suing for the release of the funds call the new conditions “unlawful and politically motivated,” and argue that only Congress could change the terms of the grants.
Lawyers for the Trump administration counter that the departments have the legal discretion to revise the terms of the agreements before releasing the money.
New York City Corporation Counsel Muriel Goode-Trufant, the city’s top lawyer, told Gothamist she was “pleased” the judge found “no basis for the federal government to withhold hundreds of millions in grant funding to plaintiff cities and counties.”
“We are confident of winning the entire case to protect billions of dollars in funding for critical programs the federal government has put at risk,” Goode-Trufant added in a written statement.
Spokespeople for the U.S. Department of Transportation and the U.S. Department of Housing and Urban Development did not immediately provide a response to questions about the decision or when they will release the funding.
The heads of organizations serving homeless and low-income New Yorkers have said the ambiguous conditions added to their grant agreements put them in an ethical and practical bind that could threaten the very people they serve, including LGBTQ+ New Yorkers and immigrants.
They told Gothamist they worried signing the documents could result in funding clawbacks if they were later found to have violated the terms, or could affect on their own hiring practices — especially if they prioritize hiring their own former clients, such as people who have experienced homelessness or domestic violence.
The housing groups are part of a consortium called the Continuum of Care, which includes city agencies. The continuum coordinates strategies for addressing homelessness and raised alarms about the jeopardized funding. Co-Chair Gabriela Sandoval Requena said those organizations can now “access funding that was already approved by Congress.”
She added: “This means that organizations that depend on these grants to house domestic violence survivors and other vulnerable populations can continue providing these life-saving services.”
Supportive Housing Network of New York Executive Director Pascale Leone called the ruling “a victory for some of New York’s most vulnerable residents.”
But she added it’s too early for the groups to let down their guard.
“As this case plays out in court, the president is proposing to end all funding for permanent supportive housing, making thousands of formerly homeless New Yorkers homeless again,” Leone said.
An analysis by the National Low-Income Housing Coalition finds Trump’s budget bill would bar cities and states from using federal homeless assistance funds for supportive housing — permanent apartments with ongoing services for the formerly homeless.
Tagged
Politics
housing
new york city
transportation
David Brand
David is a reporter covering housing for Gothamist and WNYC. Got a tip? Email [email protected] or Signal 908-310-3960.
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