New Jersey Attorney General Jennifer Davenport has joined a coalition of 16 attorneys general in a federal lawsuit alleging illegal actions by the U.S. Department of Housing and Urban Development, including threats to withhold funding from state and local fair-housing enforcement agencies because of LGBTQ protections in state civil rights laws.
The suit — filed March 16 in the U.S. District Court for the Northern District of California against HUD, HUD Secretary Eric Scott, the U.S. Office of Fair Housing and Equal Opportunity, FHEO Assistant Secretary Craig Trainor, and the United States — says HUD “seeks to force states to jettison their protections against housing discrimination.”
In September 2025, HUD issued guidance to the New Jersey Division on Civil Rights and agencies in other states, that threatens to decertify them from the Fair Housing Assistance Program and cut off funding “unless they stop enforcing crucial protections against discrimination based on sexual orientation and gender identity,” according to a news release from Davenport’s office. The FHAP was established in 1980 with bipartisan support.
The guidance also prohibits agencies from pursuing claims targeting housing practices that may appear neutral but, in reality, have a discriminatory disparate impact on certain populations, the release said. The release added that in New Jersey and many other states, those fair-housing protections are enshrined in state law.
The plaintiffs allege in their 82-page complaint that the guidance “included an unprecedented reversal of longstanding law and imposed numerous unlawful conditions on federal funding.” The complaint alleges violations of the spending clause of the U.S. Constitution and the federal Administrative Procedure Act. The full complaint can be viewed here: 01-Illinois-v.-HUD.Complaint.pdf.
“HUD’s guidance, if implemented, would eviscerate the federal-state partnership Congress created to enforce the Fair Housing Act (“FHA”), gut Plaintiffs’ ability to ensure equal access to housing nationwide, and weaken fair housing enforcement,” the complaint said.
Davenport said in the release that housing is the biggest expense for most New Jerseyans and that the affordability crisis shouldn’t be made worse by discrimination.
“It is bad enough that the federal government has largely abandoned efforts to combat housing discrimination, but the Administration should not also inhibit states from protecting our residents,” Davenport said. “To withhold funding, and allow such discrimination to go unchecked, is profoundly wrong.”
In addition to threatening to decertify partner agencies, HUD is trying to impose “vague, ideologically motivated, and unlawful conditions on program funding,” according to the release.
The plaintiffs assert in their complaint that the Trump administration’s actions “will sow confusion” over enforcement and raise enforcement costs in fair-housing laws in violation of the Constitution’s spending clause and the APA.
“First, the guidance threatens to decertify state and local FHAP agencies — thereby cutting off complaint referrals and funding — unless they stop enforcing state and local fair housing protections that exceed those in Defendants’ narrow conception of the FHA, including protections for sexual orientation, gender identity or expression, language, criminal records, and source of income,” the complaint said. The complaint is also calling HUD’s actions an attempt to coerce the plaintiffs to abandon their fair-housing protections, alleging those actions conflict with the FHA, violate HUD’s own regulations, and reverse decades of practice.
HUD and FHEO did not respond to requests for comment.
In addition to Davenport, the plaintiffs are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Rhode Island, Vermont, Washington, and the District of Columbia.
