Houston City Council approves $50M housing, community development plan

The Houston City Council approved its 2026 Annual Action Plan, amounting to $50 million in grant funds. It is a document submitted to the U.S. Department of Housing and Urban Development as Houston’s formal application for federal formula grants.

The city conducted community meetings and once they were concluded, the Council authorized the submission of the plan to HUD.

During a public meeting in Houston’s Alief neighborhood, Pastor Camelia Joseph said housing affordability in Houston is no longer as seamless as people would like.

“With our houses selling for $400,000 today, the people in our community can’t afford it,” Joseph, the founder and CEO of Joseph Ministries, said. “They work jobs at Burger King, McDonald’s, as personal care attendants, housekeeping in our hotels, and serve in our restaurants. They cannot afford a mortgage on what they’re making.”

That comment landed in a room where residents had just spent an hour arguing over a stack of color-coded dot stickers and charts, trying to signal to the city which slice of federal housing money mattered most to them.

The choices were single-family, multifamily, public service, public facilities, and services for the homeless.

Participatory democracy in miniature, the workshop took place because the City of Houston is required by federal law to ask before submitting its action plan to HUD.

The 2026 Annual Action Plan

The 2026 plan, the second year of a five-year consolidated strategy, will direct the $50 million federal funds toward expanding affordable housing and homeownership, reducing homelessness, supporting people with HIV/AIDS, improving neighborhood infrastructure, and boosting economic opportunities, during the program year running from July 2026 through June 2027. 

It is part of the broader 2025-2029 Consolidated Plan, focusing on improving conditions for low- and moderate-income residents.

Each year, the city reports progress through a performance report to track how well these goals are being met.

All three items were sponsored by the Housing and Community Development Department (HCD) under Director Michael C. Nichols and had been reviewed by the Housing and Affordability Committee on March 17, 2026, before advancing to a full council vote.

The document’s scope, however, belies a central tension that Nichols expressed to the Defender.

“The programs have too much red tape,” Nichols said. “It’s very frustrating to people. There’s not enough money. Three hundred and fourteen million dollars seems like a lot of money, but the damage during those storms was probably bigger than that.”

What the neighborhoods are saying

At the Alief meeting, residents described living in flood-damaged homes, navigating repair applications that changed their requirements at the last minute. Other attendees pushed for factory-built single-family housing as a cost-cutting solution.

The tension between single-family and multifamily investment is real inside the plan itself. 

The Multifamily Housing Program receives by far the largest allocation, $11 million in CDBG funds and $5.58 million in HOME funds, targeting 75 new rental units and aiming for a longer-term goal of 600 affordable units by 2029. The Home Repair Program receives $3.15 million in CDBG funds to target 34 households.

The scale of the problem

Between 2018 and 2023, the median household income in Houston grew by about 22%. Median rents rose about 31%, while home values increased roughly 50%. 

The plan projects a growth that will continue to increase demand, including an estimated 400,000 additional Harris County households by 2036, nearly half of whom are expected to be at or below 80% AMI.

Nichols noted that the county has more than 40% of its population without $400 in emergency savings. 

“We have a poverty plan,” he said. “We have failed. We, as the city, Congress, and the state, have failed to address this problem. And we need to change that.”

That context explains why the 2026 plan sets a one-year goal of 1,411 total affordable housing units, spread across rental assistance, new units, rehabilitation of existing units, and acquisition.

Of those, 1,255 involve rental assistance. 

“Houston is behind other cities in giving housing for people in the lowest income bracket, 30% below AMI,” Nichols explained. “That’s one of the reasons I really focus on multi-family housing, because I can gear toward those individuals who are 30% below. We really have to figure that one out because we’re one of the worst in the country.”

The disaster recovery backlog

The 2026 Annual Action Plan does not exist in isolation. Overlaying the affordability crisis is also a disaster recovery problem, per Nichols.

The Derecho hit Houston in May 2024 and Hurricane Beryl in July. Before those, Houston was still working through recovery funding tied to the 2021 Winter Storm Uri, Hurricane Harvey in 2017, and flood events dating to 2015.

The single largest sum the city received is $314.6 million in CDBG-DR24 funds, or Community Development Block Grant disaster recovery money tied to Beryl and the Derecho, to support recovery efforts as a reimbursement grant, provided the city spends them on eligible activities.

The Houston City Council adopted two related ordinances establishing how the city will spend the recovery funds. One creates a roughly $50 million program to rebuild and expand affordable multifamily housing, through new construction and land acquisition, targeting low- to moderate-income renters and replacing units lost or damaged by the storms.

The other adopted guidelines for the Power Generation Resilience Program, a $101.3 million initiative that will install permanent backup power generation at critical public facilities, including fire stations, police stations, libraries, and community centers, so they can continue operating during future weather disasters.

Nichols said it took months of federal back-and-forth just to secure those funds.

“We had to make sure that monies were put in by Congress,” he said. “Then we have to wait for the rules to be approved. All this takes a ridiculously long time. Then you have to go through the process…nobody writes a check for $314 million. The city has to spend the money and then ask for reimbursement. And if we make any mistake, we owe the money back.”

Homelessness: A city’s wager on 419 Emancipation

Most workshop attendees said they would support more city investments in homeless services.

The most visible element of Mayor John Whitmire’s housing agenda is a building called 419 Emancipation, a transitional housing facility the city purchased and is now preparing to operate as a low-barrier shelter and triage center for people experiencing unsheltered homelessness.

The Council approved both the lease and operator agreement for 419 Emancipation between the City of Houston and The Harris Center for Mental Health & IDD.

Nichols put a specific number on what he expects from it.

“With only 222 beds, I’m expecting more than a thousand people to go through that in a year,” he said. “I’d be disappointed if it’s not much more. If we could take a thousand people out of this homelessness system, it would really bring those numbers under control.”

The baseline he is proposing to work against is much higher. A total of 3,325 are experiencing homelessness in Harris, Fort Bend, and Montgomery counties, according to the Coalition for the Homeless of Houston/Harris County and its partners’ count last year.

The plan commits ESG formula funding of $2.16 million toward emergency shelter and homelessness prevention, with an additional $1.19 million in ESG-RUSH (Rapid Unsheltered Survivor Housing) disaster recovery funds.

But Nichols expressed concern about Houston’s housing voucher allocation formulas, which he explained were set decades ago and have never been updated to reflect either city’s growth. 

“The answer is more dollars,” he said. “The federal government needs to put more dollars in affordable housing. When we get to the midterm elections and the presidential elections, don’t get tricked by this issue about trickle-down economics.”