U.S. Department of Veterans Affairs

The U.S. Department of Veterans Affairs spent September 2026 arguing two versions of the same fight: in New York City, whether federal homelessness money comes with conditions that cities cannot accept, and in Los Angeles, whether the courts can order the department to build housing it says Congress never asked it to build. In the same month, the department announced the largest homelessness-grant package in its history.

The Borden Avenue withdrawal

New York City’s Department of Homeless Services (DHS) is exiting the VA’s Grant and Per Diem program as of October 1, 2026 — the start of the FY2027 grant cycle — after the award required compliance with Trump administration orders barring “gender ideology,” according to The City Reporter’s reporting as quoted by T-SPAN. The city says those terms would have meant “excluding transgender veterans” from VA-funded beds.

The city’s case, in a DHS spokesperson’s words: “The agency did apply for the grant, but the U.S. Department of Veterans Affairs only awarded a small portion of the previous awards while requiring that the agency discriminate against certain veterans by excluding transgender veterans from seeking shelter in VA-funded beds.” The same statement added: “As a right-to-shelter city, we decided it was in the best interest of the veterans we serve to ensure access to shelter for all veterans experiencing homelessness.” City officials also complained that the VA offered only a fraction of prior funding (T-SPAN).

The VA’s response is that the city withdrew voluntarily after being told it would get less money, and it calls the discrimination claim “false.” Press secretary Quinn Slaven put the department’s position this way: “VA has limited resources and distributes these awards based on past performance, demonstrated need and ability to provide high-quality service to veterans.” Slaven added that the department “evaluated the Borden Avenue facility and determined that it could not justify a larger award” (T-SPAN).

The facility at the center of the dispute is the Borden Avenue Veterans Residence in Long Island City, Queens — the address is 21-10 Borden Avenue (Veterans Justice Project). It houses more than 200 veterans and, per the T-SPAN account, was slated to keep 125 to 150 of those beds through roughly $4 million a year in Grant and Per Diem funding (T-SPAN). The veteran advocate who has written most about the site, Timothy Pena, describes it as the city’s only federally supported VA transitional housing program (Veterans Justice Project).

The numbers in Pena’s September 15, 2026 piece are stark. Citing “sources within Veterans Affairs,” he reports that the department offered to continue funding just 40 GPD beds in New York City versus 154 currently authorized at Borden Avenue — and that DHS declined the offer. Without another provider stepping in, New York goes from 154 authorized VA transitional beds to zero (Veterans Justice Project). He also reports that Mayor Zohran Mamdani’s administration has assembled a transition team to convert Borden into an all-veteran DHS shelter, replacing the federal program with municipal shelter beds — a switch he estimates costs city taxpayers an extra $3.9 million a year in lost VA funding alone (Veterans Justice Project).

That figure is the author’s estimate, not an independently confirmed total, and it belongs to a piece that is openly critical of the city’s handling of the building. Pena’s reporting paints Borden as a troubled facility: NYPD records obtained through a freedom-of-information request documented about 1,365 emergency-service events at the address between August 2024 and December 2025 (Veterans Justice Project). The building was operated by the Institute for Community Living under what he calls a MICA — Mentally Ill/Chemically Addicted — model inside the city’s shelter system, and he lays out a budget in which roughly $644,821 went to counseling, about $1.58 million to a Mental Health Services Adjustment, some $539,000 to food, and around $32,000 to client transportation (Veterans Justice Project).

The political reaction crossed party lines in at least one case. City Councilmember Joann Ariola, a Republican from Queens, told The City Reporter that the withdrawal was unnecessary: “This should not be an either-or choice. We can make sure transgender veterans have a place to stay without walking away from millions of dollars that could help other veterans in need” (T-SPAN).

Pena writes as a formerly homeless veteran who says the Grant and Per Diem program helped save his life a decade ago, providing the stability he needed to transition out of homelessness (Veterans Justice Project). His argument is not that the program should end but that New York City should have made it work. The city’s position, as stated by its spokesperson, is that the grant’s conditions made participation unacceptable for a right-to-shelter city. Those two claims have not been reconciled, and no litigation or congressional action over the withdrawal had been verified as of the end of September 2026.

The program behind the dispute

The Grant and Per Diem program is, in the VA’s own inspector general’s words, “VA’s largest transitional housing program” (VA Office of Inspector General). It awards grants to community partners — grantees — that provide veterans experiencing homelessness with temporary housing and supportive services such as mental health and substance-use treatment and help obtaining permanent housing. The program’s budget was over $275 million, and it served almost 24,000 veterans in fiscal year 2022. Grantees can be nonprofit organizations, state or local government agencies, or recognized tribal governments, and the most common award type is the per diem-only grant (VA Office of Inspector General).

Oversight of the program sits with GPD liaisons at VA medical facilities — typically social workers — who track veteran outcomes in a system called HOMES. A September 2024 inspector general review found that the data were shaky: HOMES outcome records were unreliable for about 21 percent of the sampled permanent-housing exits, including cases where the recorded housing arrangement did not match VA medical records or grantee files, or lacked supporting documentation (VA Office of Inspector General). That finding is part of why the Borden argument cuts both ways — the city points to the conditions and the small award, while the VA points to past performance and demonstrated need.

The West LA ruling

On September 11, 2026, the full Ninth Circuit denied the VA’s request for rehearing en banc in the homeless-veteran class action Powers v. McDonough, leaving intact a unanimous December 2025 three-judge panel decision (Home of the Brave). The Department of Justice had filed the rehearing request in February 2026. The district-court orders — which require the VA to build more than 2,500 housing units on its West Los Angeles campus at an estimated cost above $100 million — now proceed unless the government appeals to the Supreme Court (Home of the Brave).

The denial was not unanimous in sentiment. Judge Daniel P. Collins dissented, joined by Judges Bress, Bumatay, and Tung, calling the panel decision “deeply flawed” on Rehabilitation Act and Olmstead grounds. Judge Bumatay dissented separately, joined by Judges Tung and VanDyke, arguing that the class certification “missed the mark in three different ways” — on jurisdiction, on Supreme Court precedent, and on commonality (Home of the Brave). Two of the circuit’s 29 active judges did not participate in the vote (Home of the Brave).

The underlying case concerns a 388-acre property deeded to the U.S. government in 1888 to house disabled soldiers (Home of the Brave). The original ruling came from Judge David O. Carter, a Clinton nominee, who issued a permanent injunction against the VA and ordered 100 emergency shelter units built on the campus (Home of the Brave). The litigation also swept in the campus’s neighbors: the UCLA baseball stadium was locked out and its rent increased, and the Ninth Circuit later halted construction (Home of the Brave).

The political backdrop is its own story. A May 2025 executive order called for a national center for homeless veterans at the West LA campus, the VA terminated its Brentwood School lease, and the newsletter covering the case reports that DOGE-driven cuts “stymied the budget across the VA and the LA campus” (Home of the Brave). Through it all, VA spokesperson Quinn Slaven has said only that “VA does not comment on pending litigation” (Home of the Brave). The veterans’ attorney Mark Rosenbaum of Public Counsel expressed hope that the denial would end the years-long struggle over the property (Home of the Brave).

The record grants announcement

Against that backdrop, the VA announced in September 2026 that it would award a record $1.17 billion in grants to 680 organizations for fiscal year 2027, after housing 51,936 homeless veterans in FY2025 — which the department described as the most in seven years (EIN Presswire). The package splits into $855 million through Supportive Services for Veteran Families, issued as one-year grants beginning October 1, 2026, and $318 million through Grant and Per Diem, issued as three-year grants beginning the same day. The GPD portion funds transitional housing, service centers, transition-in-place programs, and special housing for women veterans, the chronically mentally ill, the frail and elderly, the terminally ill, and veterans caring for minor dependents (EIN Presswire).

Secretary Doug Collins tied the announcement to the department’s broader performance claims: “We are delivering results — housing more veterans than any other year in the past seven years… We will not rest until every veteran who needs a safe place to live has one” (EIN Presswire). The same announcement cited 250,000-plus new veterans enrolled in VA health care in 2026, 41 new VA health care facilities, a benefits backlog down more than 70 percent, disability-claims processing time down 46 percent, and record appointment volumes — 82,083,918 direct-care appointments in FY2025 (up 4.1 percent) and 59,989,662 community-care appointments (up 12 percent) (EIN Presswire).

The department and its secretary

The VA was established in 1989 as an executive department by the Department of Veterans Affairs Act, after more than two decades of congressional effort to raise its predecessor, the Veterans Administration, to Cabinet status (JRank). That predecessor had been created as an independent agency by Executive Order No. 5398 of July 21, 1930, consolidating the U.S. Veterans Bureau, the Bureau of Pensions, and the National Home for Volunteer Soldiers (JRank). Three organizations administer its programs: the Veterans Health Administration, the Veterans Benefits Administration, and the National Cemetery System (JRank). The department is headquartered at 810 Vermont Ave. NW in Washington, D.C. (EIN Presswire).

Its secretary is Doug Collins, whose nomination was received by the Senate on January 20, 2025 and confirmed by a 77–23 vote on February 4, 2025, after an 83–13 cloture vote (Congress.gov).

What this profile does not claim

This profile does not adjudicate the Borden Avenue dispute. The city’s reading of the FY2027 grant terms comes from The City Reporter’s reporting as quoted by T-SPAN; the VA calls the discrimination claim “false,” and The City Reporter’s original article could not be independently accessed for this profile. The 40-bed figure comes from one advocate’s unnamed VA sources — though the city’s own spokesperson independently confirmed the award was “a small portion” of previous awards.

It does not assert a current VA workforce or budget figure; only dated figures were verified. It does not claim the government has decided whether to petition the Supreme Court in Powers v. McDonough — that was unknown at the time of writing. The FY2025 performance figures and the $1.17 billion grant total are the VA’s own claims, carried as such. And it does not establish whether the conditions at Borden Avenue, as described in the advocate’s FOIL-based reporting, caused the smaller award; the VA cites past performance and demonstrated need, which is as far as the verified record goes.