How Federal Dollars Might Help El Paso Stem Its Affordable Housing Crisis

El Paso, Texas is leaning on a mix of federal housing grants and accumulated HUD funding to confront a worsening affordability crisis, according to reporting published by The Texas Tribune on August 8, 2023. With home prices up 61% since 2014 and more than 81,000 city households classified as "asset limited, income constrained, employed" (ALICE), local officials say federal dollars are central to any near-term solution.

A city stretched by rising costs

El Paso is home to roughly 677,000 residents, and 18.3% of them live below the poverty line. The strain on working families has deepened as housing costs outpace wages. The ALICE designation captures households that earn too much to qualify for most traditional safety-net programs but too little to afford basic necessities, including housing, in the current market.

Abraham Gutierrez, assistant director of El Paso's Department of Community and Human Development, told the Tribune that federal support is essential as the city tries to expand its affordable housing stock and keep existing residents housed.

Where the federal money is coming from

The federal resources flowing toward El Paso fall into two main buckets. The first is a share of President Biden's 2022 affordable housing initiative, a five-year national push aimed at increasing the supply of affordable homes. Texas was promised about $148.2 million under that effort, to be divided among dozens of cities and counties statewide. El Paso is in line to receive roughly $11.37 million across four grants tied to social programs that can support housing stability.

The second bucket is older but larger locally. The city has accumulated approximately $15 million in unspent HUD HOME Investment Partnerships Program funds, which municipalities can use to build, buy or rehabilitate affordable housing or to provide direct assistance to low-income renters and homebuyers. El Paso has already drawn on HOME dollars over the past decade to back projects such as the Artspace El Paso Lofts and the Blue Flame Apartments, and officials signaled plans to use remaining balances on additional high-ticket projects.

One of the nation's largest public housing authorities

El Paso's Housing Opportunity Management Enterprises, known locally as HOME, is the 14th largest public housing authority in the United States and the largest in Texas. It operates on an annual budget of roughly $91 million, most of it funded by HUD, and serves more than 52,000 residents through public housing units and voucher programs. Even so, Gutierrez and other officials have warned that HUD funding has trended downward for decades across administrations, limiting what local authorities can do without state and philanthropic support.

Texas lags on state-level housing investment

The Tribune's reporting underscores how little state-level backup El Paso receives. Using 2020 data, Texas ranked 49th in the nation in state spending on affordable housing, ahead only of Nebraska. The state came in 33rd for local spending and 40th for combined state and local spending. That leaves federal programs, including HUD's HOME Investment Partnerships Program and Community Development Block Grants, shouldering most of the affordable housing load in cities like El Paso.

What it means for homeowners and renters

For El Paso homeowners, the accumulated HUD HOME dollars can indirectly ease market pressure by funding new affordable units and rehabilitating aging housing stock, reducing competition for limited homes. Low- and moderate-income homebuyers may also benefit from HOME-funded down payment assistance and owner-occupied rehabilitation programs administered through the city and partners such as A.Y.U.D.A. Inc. Renters at risk of displacement can access voucher programs and social services supported by the $11.37 million in newer federal grants.

City officials have not published a final project list for the full $15 million HOME balance, but they indicate future deployments will target high-impact affordable housing construction. Residents seeking assistance are directed to El Paso's Community and Human Development office and to the Housing Authority of the City of El Paso.