Phoenix Mayor Kate Gallego did not hold back on Wednesday, using a routine funding vote to take a public shot at President Donald Trump over his housing budget proposal. After the City Council signed off on roughly $8 million in federal housing and shelter grants, Gallego warned that the White House budget would wipe out the very programs Phoenix depends on to build affordable homes and operate emergency shelters. The council moved to steer HOME and CDBG dollars into four development projects and additional shelter support while that money still exists.
White House Budget Would Cut Local Grants
The White House's budget request would eliminate both the Community Development Block Grant program and the HOME Investment Partnerships program, stripping billions in formula funding used by local governments for housing and homelessness work, according to Smart Cities Dive. Advocates warn that if those programs are zeroed out, cities would be forced to either find new revenue streams or scale back projects that expand affordable housing.
Council Moves To Lock Local Funding
At its April 22 meeting, the council approved about $7 million in HOME loans for four affordable housing developments and added $809,193 in CDBG funds for the Rio Fresco emergency shelter, according to City of Phoenix. The council signed off through loan agreements and a contract amendment aimed at covering construction costs and shelter operations. Members described the move as a way to keep projects on track while the future of federal support is up in the air.
The HOME money was split among four projects: Sunnyside Commons, the Alex Apartments, Pennrose’s 2nd and Roosevelt development, and Wood Street Senior. Together, the proposals would add 236 affordable units to Phoenix’s housing stock, as reported by Phoenix New Times. The council also approved the CDBG increase for Rio Fresco to pay for facility upgrades and strengthen connections to services. City documents show the HOME awards range from $1 million to $2 million per project and are structured to fill financing gaps for new construction.
“Those have been great programs for the city of Phoenix,” Gallego said during the meeting, adding that she “certainly hope[s] that does not move forward,” according to Phoenix New Times. The mayor did not respond to follow-up questions about what the city would do if the federal funding disappears.
How Phoenix Is Propping Up Housing
Gallego and the council have been trying to build a local backstop alongside federal dollars. The city created the Phoenix Housing Trust Fund and says it has created or preserved tens of thousands of homes since 2020, according to City of Phoenix. Officials point to local loans, bond measures and zoning changes as part of a bigger strategy meant to keep affordable housing projects moving even if Washington pulls back. City leaders cast this week’s approvals as one more piece of that long game on homelessness and housing supply.
Advocates Warn Of Wider Impact
National housing advocates say the fallout from eliminating CDBG and HOME would stretch far beyond Phoenix. Local governments across the country rely on those programs to finance affordable housing and homelessness services, and the National Low Income Housing Coalition has urged Congress to reject the proposed cuts. The coalition’s analysis says the FY27 budget request would zero out several key programs that help pay for construction and preservation of affordable homes, forcing cities to scramble for other options, according to National Low Income Housing Coalition.
For now, the White House plan is just that, a request. Congress still has to set actual spending levels, and cities are expected to track the appropriations process closely, according to a Congressional Research Service overview on Congress.gov. In the meantime, Phoenix officials are moving quickly to lock existing HOME and CDBG funds into projects they say will tackle both immediate shelter needs and the long-term shortage of affordable housing.
_(cropped).jpg){kind=link}