Monday, June 8, 2026

Federal Court Battle and Act of Congress Set Stage for Pasadena Council’s $6.6 Million Homeless-Grant Vote Monday

Fifteen federal homeless-services grants worth $6,639,358 — funding that survived a contested HUD policy reversal only after two federal lawsuits, a preliminary injunction, a First Circuit affirmance and an act of Congress — come before the Pasadena City Council for local authorization on Monday.

The agenda report from the Department of Housing asks the Council to authorize the City Manager to enter into 15 one-year agreements with the U.S. Department of Housing and Urban Development for the 2025 Continuum of Care grants, and to pre-authorize five future amendments adding the amount of annual funding awarded by HUD and extending each term by one year.

Approval, the report states, would “provide permanent housing and supportive services to individuals and families experiencing and who have previously experienced homelessness in Pasadena.”

The funds support permanent supportive housing, rapid rehousing, coordinated entry, system planning and administration, and the Homeless Management Information System database. The City’s Department of Housing is the Collaborative Applicant and Lead Agency for the Pasadena Continuum of Care, also known as the Pasadena Partnership to End Homelessness, and as such administers awarded CoC grants.

The item appears as Agenda Item 13 and was routed through the Housing, Homelessness and Planning Committee on June 3. The recommendation also includes a finding that the actions are not a “project” subject to the California Environmental Quality Act under Public Resources Code Section 21065 and State CEQA Guidelines Section 15378(b)(4) and (5).

The path the grants took to this Council vote is described at length in the agenda report. On July 31, 2024, HUD released a Notice of Funding Opportunity that permitted communities to submit a single consolidated application covering Fiscal Year 2024 and Fiscal Year 2025 grants; the two-year NOFO, the report states, was intended to streamline the award of the 2025 CoC grants without requiring CoCs to undertake a second time-intensive application process in 2025. Pasadena received 15 grants as a result.

On November 13, 2025, HUD issued a separate Fiscal Year 2025 CoC NOFO, distinct from the 2024 two-year NOFO, which the agenda report states introduced significant reforms to the Continuum of Care program. Among the most controversial changes, the report states, was a new requirement that no more than 30 percent of a community’s renewal funding could be used for permanent housing programs — a sharp departure, the report states, from HUD’s longstanding policy of prioritizing permanent housing, which had produced CoC portfolios made up of roughly 90 percent permanent housing projects. The report states the cap “would have forced the defunding of existing permanent supportive housing and rapid rehousing programs nationwide, putting the housing of an estimated 170,000 formerly homeless households at risk.”

Two lawsuits were filed in late November and early December 2025, the report states — one from a coalition of 21 attorneys general and governors, and another from a group of 11 local governments and nonprofit organizations. On December 8, 2025, HUD rescinded the November NOFO ahead of a court hearing. On December 19, the U.S. District Court for Rhode Island issued a preliminary injunction halting enforcement of both the new Fiscal Year 2025 NOFO and HUD’s rescission of the two-year NOFO. The injunction “preserved the status quo,” the report states, and HUD was ordered to process renewal grants under the Fiscal Year 2024-25 NOFO framework.

On April 1, 2026, the U.S. Court of Appeals for the First Circuit affirmed the lower-court injunction, rejecting HUD’s attempts to proceed with its November NOFO. The Court held that HUD’s abrupt policy shift, without adequate justification, likely violated the Administrative Procedure Act and posed immediate harm to communities, the agenda report states.

Additionally, the Consolidated Appropriations Act, 2026, signed into law on February 3, 2026, required HUD to non-competitively renew CoC grants expiring in the first quarter of Calendar Year 2026 and mandated successive renewals if new Fiscal Year 2025 awards were not issued by specified dates. The law instructed HUD to extend the grants for 12 months, “in effect freezing the competition for new awards,” the report states. In compliance with the court’s injunction and legislative mandates, HUD announced the first round of renewals on March 31, 2026, which included two of the Pasadena CoC’s 15 renewal grants; a subsequent announcement on May 21, 2026, included the remaining 13.

All grants carry a 25 percent match requirement. The match for grant funds passed through to sub-recipients will be met by the sub-recipient agencies, and the City-sponsored rental assistance grant’s in-kind match is provided by a third party documented in a formal Memorandum of Understanding. The match for the City-sponsored HMIS project will be satisfied with $64,328 of federal Emergency Solutions Grant funds in the Department’s proposed Fiscal Year 2027 operating budget, and the match for the City-sponsored Planning grant will be satisfied with $63,390 of General Funds in the same budget. Approval of the actions will have no fiscal impact because the funds are included in the Department’s proposed Fiscal Year 2027 operating budget, the report states.

Upon execution of the grant agreements, the City will amend 13 existing sub-recipient agreements originally approved by the Council on September 1, 2021, September 19, 2022, September 18, 2023, October 21, 2024, and November 18, 2024; the amendments will increase the total not-to-exceed contract values by the amounts awarded by HUD and extend the terms by one year. The proposed projects, the report states, are in accordance with the Pasadena Continuum of Care system, the General Plan Housing Element, the Five-Year Consolidated Plan, and the Five-Year Public Housing Authority Plan, and the recommended actions are consistent with the City Council’s goal “to support and promote the quality of life and local economy.”

The agenda report was prepared by Program Coordinator III Jennifer O’Reilly-Jones, submitted by Director of Housing James Wong, and approved by Interim City Manager Matthew E. Hawkesworth.