Judge Temporarily Blocks Trump Admin’s Conditions on Transit, Homelessness Grants for NY, Boston

Eight cities and counties are suing the administration over grant conditions, arguing that they had to be approved by Congress.

A homeless man in New York City on March 13, 2025. Samira Bouaou/The Epoch Times

A federal judge on May 7 temporarily blocked the Trump administration from imposing new conditions on grants that fund transit services for the Seattle area and homelessness services for Boston, New York, San Francisco, and other local governments.

The ruling stems from a lawsuit filed on May 2 by eight cities and counties challenging the new conditions, which were issued in multiple White House executive orders.

The executive orders prohibit the funds from being used on any activities that promote diversity, equity, and inclusion (DEI) policies or that go against the administration’s stance on immigration, health care, and gender ideology.

The cities and counties argue that the conditions are unconstitutional and unlawful, do not pertain to the purposes of the grant programs, and are aimed at coercing them into adhering to the administration’s policy agenda.

In issuing the temporary restraining order, District Judge Barbara Rothstein in Seattle said local governments had shown they were likely to win their case against the administration because the conditions at issue had not been approved by Congress.

Additionally, the conditions were not closely related to the purposes of the grants and the programs they fund, and would not make the administration of the grants more efficient and effective, Rothstein found.

Plaintiffs also sufficiently demonstrated that they would suffer irreparable harm unless a temporary restraining order was granted, Rothstein said.

“Even setting aside whether Plaintiffs are faced with an imminent deadline to agree to the Grant Conditions, Plaintiffs do face an imminent threat in the absence of a [temporary restraining order],” the judge wrote. “Defendants have put Plaintiffs in the position of having to choose between accepting conditions that they believe are unconstitutional, and risking the loss of hundreds of millions of dollars in federal grant funding, including funding that they have already budgeted and are committed to spending.”

Rothstein blocked the Housing and Urban Development (HUD) and the Department of Transportation’s Federal Transportation Administration (FTA) from enforcing the new grant conditions or withholding or delaying funding awarded under the grants for 14 days.

Judge Dismisses Trump Admin’s Jurisdiction Claim

The judge also rejected the administration’s argument that she lacked jurisdiction over the lawsuit because it was essentially a contract dispute that should have been brought in the Court of Federal Claims.

“Plaintiffs have not asserted a contract claim, but one based on statutory and constitutional rights, and the relief they seek would not be available to them in the Court of Federal Claims,” Rothstein wrote.

The withheld funding comes from the HUD’s Continuum of Care program, which, according to its official website, is designed to promote “communitywide commitment to the goal of ending homelessness by providing funding for efforts by nonprofit providers and State and local governments.”

According to the Trump administration, HUD announces recipients through a “conditional award” that sets out requirements the grantee must meet. Only once the grantee has met the requirements do the parties sign a grant agreement, after which, the funds are obligated by HUD within 45 days.

The conditions that grant recipients needed to meet were included in agreements sent to the cities and counties in March, it said in a court filing.

“Plaintiffs seek continued payment of the grant funds they allege they ‘are entitled to,’ without having to agree to provisions in the grant agreements and master agreement that they object to,” lawyers for the administration wrote.

King County, which includes Seattle, sued over changes to grant conditions for homeless residents as well as mass transit funding that it said helps to provide “critical” services and improvements.

Boston and New York, Pierce and Snohomish Counties in Washington, the city and county of San Francisco, and Santa Clara County in California all sued over the changes to homelessness services grants.

The lawsuit alleges the HUD and the FTA acted illegally when they placed the new conditions on the grants worth hundreds of millions of dollars, arguing the conditions contravene separation of powers principles and violate the 10th Amendment, the Fifth Amendment, and the Administrative Procedure Act.

“Today’s ruling is a positive first step in our challenge to federal overreach,” King County Executive Shannon Braddock said in a statement. “We will continue to stand up against unlawful actions to protect our residents and the services they rely on.”

The Epoch Times has contacted the Housing and Urban Development and the Federal Transportation Administration for comment.