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that could become a legal argument in favor of those non-profits. If the money is coming down through the city and then to the non-profits the idea of the "jurisdiction" as a party to the matter could apply. But if these were direct grants from HUD to these non-profits then the "jurisdiction" argument by HUD should not be allowed in. The city is a "jurisdiction" and not an individual non-profit group. The group has no control over any decisions or policies of the "jurisdiction". So if HUD has a legal or policy squabble with the "jurisdiction" then their avenue is with the legal or political action against the "jurisdiction". Here in this case they appear to be punishing "non-jurisdiction" parties for actions over which they have no control. In other words the government is alleging harm but it is taking action against people who had no role in causing the harm and who could not possibly alleviate that harm.

It would be like refusing to pay your city portion of your taxes because you disagree with some action by a private company that the city had no control over. The city isn't a party to the company so the "attack" on the non-party is improper.