For Sarah Meggison, a $7 million grant to help people experiencing homelessness comes at a critical time.

“The demand for housing has skyrocketed and we’re not keeping up with building enough housing,” said Meggison, housing development manager for the City of Tucson. “HUD saw that communities were suffering from a lack of affordable housing and housing production not meeting the needs of increasing demand.”

Tucson and Pima County got the signed grant agreement from the U.S. Department of Housing and Urban Development’s (HUD) PRO Housing program in January 2025 after submitting a highly competitive application. 

The grant was awarded based on the region’s comprehensive plan to address housing challenges through policy and infrastructure improvements, Meggison said..

National trends, local struggles: Tucson reflects a broader crisis

Tucson’s approach includes developing affordable housing on city-owned land, subsidizing development fees and reforming zoning laws to encourage new construction. 

The city is responding to growing national concern over housing affordability. According to a recent survey by the Pew Research Center, 69% of Americans said they were “very concerned” about housing costs – up from 61% the year before.

The federal definition of affordability – no more than 30% of income spent on housing – is out of reach for many. In 2023, nearly 50% of U.S. renter households were “cost burdened,” meaning they paid more than 30% of their income on rent, according to U.S. Census Bureau data.

National housing supply has also struggled to keep pace with demand. Active home listings in September 2024 were still 22% below pre-pandemic levels, while home prices surged nearly 58% between 2019 and 2024, far outpacing inflation, according to the Federal Housing Finance Agency’s House Price Index, which tracks changes in single-family home values across the U.S.

In many urban areas like Tucson, demand has outstripped supply, exacerbating affordability challenges.

City of Tucson’s strategy: Reform over direct aid

Meggison said that the city’s work under HUD’s Pathways to Removing Obstacles to Housing (PRO Housing) program grant will focus on high-level policy and infrastructure changes rather than direct-to-resident programs. 

That means, the resources won’t go to programs that provide support or services directly to individuals or households, such as financial assistance, job support and case management.

“In this particular case, we’re not working with anybody directly,” she said. “Most of the grant is really intended to support higher-level policy changes that hopefully trickle down to affect the housing for those who have been struggling with it..”

The grant aims to help communities remove regulatory and financial barriers to affordable housing. It funds six years of strategic work aimed at long-term change. 

In Tucson, activities will target outdated zoning and land use policies, inefficient procedures and gaps in development resources, Meggison said. The city plans to promote affordable and market housing development along redevelopment corridors, explore the potential of tiny homes and missing middle housing, and support small-scale developers.

As laid out in the city’s HUD proposal, the grant supports:

• Zoning reform to increase density and infill development
• Incentive tools like gap financing, impact fee subsidies and pre-development assistance
• Accessory Dwelling Units (ADUs) and middle housing through model plan libraries and streamlined approval processes
• Community Land Trust development through the El Pueblo Housing Development subsidiary

A significant portion of the grant will go toward evaluating outcomes, in collaboration with the Arizona Research Center for Housing Equity and Sustainability, Meggison added.

“They are kind of assessing and evaluating our programming, so that we can see if it’s working, if it’s not working and how we can take that into the future and make it more sustainable,” she said.

The grant funding, while significant, is also limited, she said.

“Seven million is a lot, but at the same time it’s not very much at all and it goes pretty quick,” she said.

The grant is funded through the federal Community Development Block Grant (CDBG) program, which restricts its use to serving individuals and families earning below 80% of the Area Median Income (AMI). 

In Tucson, that means a household of four must earn less than $64,950 per year to qualify.

Within that income range, the city may tailor programs toward seniors or very low-income residents, Meggison said.

Pima County’s role: County seeks to rebalance affordable housing

Pima County is using its $3 million portion of the HUD grant to support projects outside the City of Tucson. A key goal is to spread affordable housing beyond the south side, where it’s mostly been located, said Sofia Blue, affordable housing division manager for Pima County.

“In my experience, a lot of the affordable housing in this community is on the south side of Tucson,” Blue said. “People have better outcomes in so many areas of their life if they are diverse and spread out where they live.”

The county plans to:

• Use $1 million for a transportation impact fee subsidy, based on a similar program Tucson already uses. In return, developers must keep units affordable.
• Hire a planner to work on zoning issues and support “missing middle” housing.
• Spend $2 million on gap funding – extra money to help projects that are almost fully funded reach the finish line.

That $2 million earmarked for gap funding will help affordable housing projects overcome sudden cost increases, Blue said. 

Before the grant was awarded, the county held a public forum and gathered feedback from residents. Even though the planning phase is done, community input is still welcome, Blue added.

Meggison and Blue said the city and county will measure success in practical ways: the number of projects that apply, how many are built and how much money is leveraged through the changes.

Both also rely on nonprofits that develop housing and support residents with services like job training, financial literacy, mental health support and food distribution. 

“There’s a continuum,” Blue said, from people leaving homelessness to those trying to buy a home.

The grant runs through 2030, but both Meggison and Blue said the ultimate goal is to use the funds as a foundation for ongoing, self-sustaining reform.

“The work of the research center is really to help us see what we’ve done and then how we can take that into the future … so that we don’t have to rely on the funding necessarily to do it,” Meggison said.

By targeting the structural root causes of unaffordable housing – zoning restrictions, funding gaps and land-use inefficiencies – Tucson and Pima County hope to reshape the region’s housing future in a way that lasts well beyond the scope of this federal funding.

Arizona Sonoran News is a news service of the University of Arizona School of Journalism.