Nathaniel Bergau, deputy chief program officer at the Los Angeles Homeless Services Authority, told a Los Angeles municipal committee that a Nov. 13 HUD Notice of Funding Opportunity (NOFO) and related procedural changes will sharply raise the stakes for local homelessness programs. "This year HUD has changed it from 90% being allowed into being put into tier 1 to a cap of 30% of the total annual renewal demand being eligible to be put into tier 1," Bergau said, adding that a separate 30% cap on permanent-housing renewals further limits what LA can request.

Why it matters: Under prior competitions a large majority of renewal projects were effectively protected from national competition; the new rules would force roughly 70% of the city’s renewals into a competitive national pool. Bergau said last year about 87–90% of the City’s Continuum of Care funding supported permanent housing; with the new caps he said "we are automatically losing, based on this, 60% of our funding federal funding for permanent housing," a shift he warned could displace thousands of households.

Details and timing: Bergau told the committee the NOFO was released weeks later than typical and that HUD set a compressed schedule: local applications are due Jan. 14, with limited time to receive HUD’s detailed instructions. He said the community’s "annual renewal demand" is roughly $217 million and HUD’s caps would mean the City can request only about $65 million for permanent-housing program types under the NOFO’s current interpretation. Bergau also explained that HUD now requires ranking all eligible renewal projects and has tightened rules defining program types (permanent supportive housing, rapid rehousing and certain joint-component projects).

Council reaction and risk to providers: Councilmembers pressed staff on concrete impacts, and Bergau walked them through a hypothetical: a $1 million rapid rehousing contract that renews in February could operate without reimbursement if HUD later declined to fund it; he said there is currently no federal mechanism to retroactively reimburse providers for services delivered in that gap. Bergau said the policy shifts could put "upwards of 7-plus thousand individuals" at risk of losing rental supports and stressed that agencies will have to decide whether to operate under financial risk.

Advocacy and litigation: Committee members raised whether the state or other parties are challenging HUD’s changes in court. Bergau and Counsel’s office staff said California’s attorney general and governor have joined litigation, and the City Lawyer’s office has prepared resolutions urging federal legislative or administrative relief to restore the prior two‑year funding expectation. Staff said they have coordinated with the county and LAHD but had not identified a ready funding source to fully backfill any federal shortfall.

What’s next: LAHSA will complete a local competitive ranking and submit the application by the HUD deadline; the NOFO’s detailed instructions (not yet issued to continuums) will be essential to final interpretation. Committee members asked the administration for follow-up briefings and for plans to identify state or local contingency funds if HUD’s decisions materially reduce renewals.

The committee received the presentation; there was no formal action on the LAHSA briefing itself.