Arizona AG: ‘Tens of thousands’ could face eviction if courts don’t block HUD caps on housing funds

A federal housing funding fight could have major consequences in Arizona, where Attorney General Kris Mayes says tens of thousands of people could be at risk of eviction.

The state has joined a multistate coalition challenging the U.S. Department of Housing and Urban Development’s latest attempt to cap funding for permanent housing projects.

The case marks the second time Arizona has joined a lawsuit over HUD restrictions on the Continuum of Care program, which provides federal dollars to local governments and organizations for housing and homelessness services.

What HUD did and why Arizona is suing

The lawsuit follows a separate case Arizona and other states won against HUD last month in federal court in Rhode Island.

That case challenged the agency’s decision to impose what the states called illegal conditions on billions of dollars in funding for the Continuum of Care program.

Although the court ruled against HUD, the department moved again June 1 to cap funding for permanent housing and place other conditions on the money, according to the Arizona Attorney General’s Office.

“After losing in court, the federal government is again violating the law and abandoning vulnerable Arizonans,” Mayes said in a Tuesday news release.

The Attorney General’s Office said the move could cause permanent housing projects funded through the program to lose funding or see it reduced.

Why the federal lawsuit matters to Arizona residents

Arizona is already facing a high number of eviction filings, especially in Maricopa County. The county has recorded more than 38,519 eviction filings so far in 2026 and nearly 90,000 over the past 12 months, according to Eviction Lab.

HUD’s June 1 funding notice would create a $1.3 billion set-aside for new projects that prioritize options such as transitional housing. The Arizona Attorney General’s Office says that would effectively cap funding for permanent housing.

The shift could threaten housing for at least 97,000 residents in permanent housing funded by CoC, including nearly 1,800 people in Arizona, according to the National Alliance to End Homelessness.

What Arizona wants the court to do on housing funds

The coalition is asking the court to declare that the challenged conditions are illegal and block HUD from implementing them.

“HUD has no legal authority to unilaterally rewrite the rules governing this critical housing funding,” Mayes said.

This is the 44th federal lawsuit Arizona has joined against the Trump administration under her leadership.

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