VA’s Los Angeles Housing Lawsuit: Appeal and En Banc Petition

The VA Los Angeles housing lawsuit is Powers v. McDonough, a 2022 class action in which fourteen homeless veterans and the National Veterans Foundation sued the U.S. Department of Veterans Affairs over its failure to house disabled veterans on the 388-acre West Los Angeles campus that was deeded to the federal government in 1888 for that purpose. In September 2024, a federal judge ordered the VA to build 750 temporary and 1,800 permanent supportive housing units and voided several commercial leases on the property. In December 2025, the Ninth Circuit largely upheld that order. The government has since asked the full appeals court to rehear the case, and construction on the ground is running well behind what the courts required.

What the Lawsuit Is About

Public Counsel, Robins Kaplan, Brown Goldstein & Levy, and the Inner City Law Center filed the case on November 15, 2022, in the U.S. District Court for the Central District of California, later joined by Sidley Austin, Elkins Kalt, and Reed Smith.¹² The plaintiffs are homeless veterans with serious mental illness or traumatic brain injury who live in Los Angeles County. The court certified that class on May 3, 2024, with a subclass for veterans whose income (including disability benefits) exceeds 50% of the local Area Median Income.³

The complaint raised three sets of claims:

Under Section 504 of the Rehabilitation Act, that the VA denied disabled veterans meaningful access to healthcare by failing to provide nearby housing, violated the Olmstead integration mandate by placing veterans at serious risk of institutionalization, and engaged in facial disability discrimination by contracting with developers who counted VA disability compensation as income.
That the 1888 deed created a charitable trust the VA had breached.
That specific land-use agreements with the Brentwood School and Bridgeland Resources violated the West Los Angeles Leasing Act of 2016 and the Administrative Procedure Act.⁴

The Leasing Act allows the VA to enter into agreements with non-VA parties on the campus but requires that they “principally benefit veterans and their families,” a phrase the statute defined narrowly: services must be provided exclusively to veterans or designed for their particular needs, and generating revenue alone does not qualify.⁵ The most prominent commercial tenants at the time of filing were the Brentwood School, which used 22 acres for a private K-12 athletic complex; Safety Park Corp., a for-profit parking operator; Bridgeland Resources LLC, an oil drilling company; and UCLA, which operated Jackie Robinson Memorial Stadium for its baseball program.⁶

To give a sense of scale: a 2025 point-in-time count by the Los Angeles Homeless Services Authority estimated 3,050 veterans experience homelessness on any given night in the Los Angeles Continuum of Care.⁷

What the District Court Ordered

After a four-week bench trial that ended August 30, 2024, U.S. District Judge David O. Carter issued his post-trial opinion on September 6, 2024, followed by a final judgment and permanent injunction on October 11, 2024.³ The relief was sweeping.

On housing construction, the VA was ordered to build 750 temporary housing units within 18 months and to submit a plan for 1,800 permanent supportive housing units within six years. On the commercial leases, the court voided the agreements with the Brentwood School, Safety Park, Bridgeland Resources, and UCLA, finding they did not principally benefit veterans. On eligibility, the court declared the practice of counting disability benefits as income for housing eligibility unlawful. And on oversight, the court appointed two monitors, John Hueston and Michelle Martinez, and ordered the VA to increase staffing for its housing voucher program.³

An earlier emergency order on October 7, 2024, directed the VA to identify sites for temporary modular housing and to suspend its procurement rules to speed installation before the fall and winter months.³

“What was once a home for disabled soldiers must fully reopen its gates and become a robust community for veterans once again,” Judge Carter wrote. “It is time for the disabled veterans of Los Angeles to come home.”⁸

The Disability-Benefits-as-Income Problem

One of the more consequential rulings addressed how housing eligibility was calculated on the campus. The VA outsourced construction to private developers who used tax-credit financing, which typically caps tenant income at 30% to 60% of the Area Median Income. The developers counted VA disability compensation toward that cap. As Judge Carter put it, “the more disability benefits that a veteran receives — the more disabled they are — the higher their ‘income’ is, and the less likely they are to receive housing.” A veteran receiving $40,000 in disability payments, for example, would be ineligible for an apartment capped at 30% of the area median income, roughly $25,000.⁹

The VA argued the third-party developers, not the agency, imposed the income limits. In a July 2024 partial summary judgment ruling, Judge Carter rejected that defense, finding the policy “facially discriminates against veterans based on their disabilities” and that the VA could not “outsource discrimination.”¹⁰

What the Ninth Circuit Did on Appeal

On December 23, 2025, a unanimous three-judge panel of the Ninth Circuit, in an opinion by Judge Ana de Alba joined by Judges Consuelo M. Callahan and Roopali H. Desai, largely affirmed Judge Carter but modified several parts.⁴

The panel affirmed all three Rehabilitation Act theories: denial of meaningful access to healthcare, the Olmstead violation, and facial discrimination through the AMI income policy. It upheld the order requiring the VA to build 1,800 permanent and 750 temporary units. It reversed the judgment against the Department of Housing and Urban Development, finding HUD was not directly responsible for providing VA healthcare benefits.⁴

On the leases, the panel agreed that the Brentwood School and Bridgeland Resources agreements violated the Leasing Act and the APA. But it held that Judge Carter went too far in barring the VA from renegotiating those leases into compliance and in ordering the VA to enter a settlement with Brentwood. The panel also reversed the charitable trust ruling in full, holding that neither the 2016 Leasing Act nor its 2021 amendment imposed judicially enforceable fiduciary duties on the VA. That reversal mooted the voiding of the UCLA lease, which had rested on the trust theory.⁴

On jurisdiction, the panel held that the Veterans Judicial Review Act did not strip federal courts of authority to hear the case, because the plaintiffs’ claims challenged systemic access to housing rather than individual benefits decisions.³

The Government’s En Banc Petition

On February 6, 2026, the government petitioned the full Ninth Circuit to rehear the case en banc. It argued Section 504 of the Rehabilitation Act does not provide a private right of action against federal programs; that the panel misapplied Olmstead, which the government contends addresses institutional confinement rather than requiring new housing programs; that the class was improperly certified because individual circumstances were too varied; and that the injunction amounted to judicial overreach into VA management.¹¹

On February 20, 2026, the Ninth Circuit recalled its mandates for all five appeals and ordered the plaintiffs to respond. The plaintiffs filed their response on March 24, 2026, arguing that the panel applied settled law and the case did not meet the standard for rehearing. As of mid-2026, the petition remains pending.³

Lease Terminations and the Executive Order

On February 9, 2026, the VA officially terminated its agreements with the Brentwood School, Safety Park, and Bridgeland Resources. VA Secretary Doug Collins said the leaseholders had been underpaying by roughly $40 million annually and called the deals “illegal and wasteful.”¹² Brentwood School, which had invested approximately $17 million in athletic facilities on its 22-acre footprint, said it wanted to preserve its relationship with the VA and that the agency had offered to meet in Washington.¹³ UCLA’s lease, dating to 1981, was not terminated, because the appeals court had dismissed the claims against UCLA as moot.⁶

Separately, on May 9, 2025, President Trump signed an executive order establishing a “National Center for Warrior Independence” on the campus and directing the VA to develop a plan to house up to 6,000 veterans there by January 1, 2028. The order told the VA to coordinate with the Departments of Health and Human Services and Housing and Urban Development to redirect funds toward the effort.¹⁴

What Has Actually Been Built

The gap between the courtroom orders and construction on the ground remains wide. As of April 2025, the VA reported 448 housing units open on the campus, with a projection of 730 by 2026.¹⁵ That figure falls well short of the court’s 750 temporary and 1,800 permanent units, and much further from the executive order’s 6,000-veteran target.

By June 2026, the VA had scaled back its temporary housing plan. In place of the 750 to 800 units originally promised by fall 2026, the agency solicited bids for a minimum of 220 units with an option for 40 more, for a total of up to 260. The units, ranging from 160 to 226 square feet with a bathroom and kitchenette, would be built on a five-acre area known as the Great Lawn. The VA expected to award the contract at the end of August 2026, with completion by April 2027.¹⁶

The funding picture raised further doubts. The VA’s 2027 budget proposal, submitted to Congress in April 2026, requested no money for new housing construction. It included $500 million for infrastructure improvements and an 800-space parking structure, plus $212 million redirected from prior authorizations for facility renovations. The plan also required relocating approximately 330 veterans currently in treatment programs on the campus, with no confirmed plan for where they would go in the interim. After news reports flagged the apparent contradiction with the executive order, the VA said the budget provided infrastructure necessary to “establish the NCWI and house thousands of additional veterans” and that a separate request for 500 to 1,000 additional units was forthcoming.¹⁷ Infrastructure work continues on the campus, including utility connections for housing buildings, sewer and water improvements, and early-stage landscaping for a “Town Center Phase II.”¹⁸

Why This Land

The campus was donated in 1888 by Senator John Percival Jones, Colonel Robert Symington Baker, and Arcadia Bandini Stearns de Baker, along with 150,000 gallons of water daily and $100,000 for property improvements. The site became the Pacific Branch of the National Home for Disabled Volunteer Soldiers, a network authorized by President Abraham Lincoln in 1865.¹⁹

That original purpose is what made the campus’s later use so contested. Over the years the VA leased large portions to private entities with no connection to veterans, and in 2011 a first lawsuit, Valentini v. Shinseki, challenged those leases. In August 2013 the district court ruled the VA had violated federal law by leasing the land for purposes unrelated to veteran care.²⁰²¹²² By July 2021, the VA had completed just 55 units, roughly 11% of the master plan’s four-year target of 480.

Attorney Mark Rosenbaum, who worked on both cases, acknowledged the lack of enforcement teeth in the 2015 settlement was an “error” that Powers was designed to correct.²³ Whether Powers ultimately succeeds where Valentini did not depends on the pending en banc petition and on whether the VA builds what the courts have told it to build.

1
Public Counsel. Lawsuit Seeks to End Homelessness for Veterans With Disabilities in Los Angeles
2
Law360. Homeless Vets Tell 9th Circ. to Deny Parking Access to UCLA
3
University of Michigan Civil Rights Litigation Clearinghouse. Powers v. McDonough
4
United States Court of Appeals for the Ninth Circuit. Powers v. McDonough, Nos. 24-6338, 24-6576, 24-6578, 24-6603, 24-6888
5
Department of Veterans Affairs. West Los Angeles Leasing Act of 2016
6
Santa Monica Daily Press. VA Terminates Private Leases at West LA Campus
7
Los Angeles Homeless Services Authority. LAHSA, VA, MVA Provide Unprecedented Picture of Veteran Homelessness
8
Public Counsel. Federal Judge Issues Groundbreaking Ruling in Favor of Disabled Veterans
9
Los Angeles Times. VA Disability Benefits and Housing Exclusion
10
Courthouse News Service. Judge Blasts VA for Renting Out Land Meant to House Homeless Vets
11
Public Counsel. Government Petition for Rehearing En Banc, Powers v. Collins
12
Los Angeles Times. VA Terminates Leases of West LA Land
13
Spectrum News. Veterans Affairs West LA VA Campus Ends Leases Brentwood School
14
The White House. Keeping Promises to Veterans and Establishing a National Center for Warrior Independence
15
VA GovDelivery. West Los Angeles VA Campus Housing Update
16
Los Angeles Times. VA Promise of 800 New Homes on West LA Campus This Year Shrinks to 260
17
Los Angeles Times. Trump’s Big Promise for Veteran Housing Is AWOL in VA Budget Proposal
18
VA Greater Los Angeles Health Care. Construction Projects
19
Long Lead. The Rise and Fall of the Soldiers Home
20
ACLU of Southern California. Valentini v. Shinseki
21
VA Office of Inspector General. West Los Angeles VA Campus Land Use and the Draft Master Plan
22
University of Michigan Civil Rights Litigation Clearinghouse. Principles for a Partnership and Framework for Settlement, Valentini v. McDonald
23
Los Angeles Times. Historic Ruling in Favor of Disabled Veterans