Laredo City Council voted on Oct. 6 to accept the Lafayette Tiny Homes rental housing project, approving the use of HOME and HOME-ARP funds to build compact rental units targeted to low-income residents, people who are homeless, and those at risk of homelessness.

Council and staff debate focused on how the project’s eligibility rules changed after an early donation and a veterans-focused plan did not materialize. Community Development Director Tina Martinez told the council that the project’s scope “did change because the original program and the original donation that was being considered didn't — it fell through.” She said the city subsequently matched available federal affordable-housing funding to the site and revised the program to comply with HOME program rules.

Why it matters: Council members who had supported the project when it was presented as housing for homeless veterans pressed for clarity on whether veterans would remain a priority for the Lafayette development. Staff said federal HOME rules and the specific funding sources require broader eligibility but that the city will keep homeless veterans in mind through existing referral networks and by setting aside some units for people meeting homeless categories.

Council discussion and staff details
Staff said the project will create a small number of rental units at the Lafayette site funded largely through HUD HOME and HOME-ARP allocations that are already assigned to affordable-housing projects. Tina Martinez and other staff said the original donation of tiny-home structures and a private partnership that had made a strictly veterans-focused project possible did not come through; city staff then restructured financing and design to make a feasible project using HUD funds.

Martinez told council that the HOME funds require objective eligibility criteria tied to HUD rules, which led to a broader low-income and homeless focus rather than exclusive veteran-only eligibility. Martinez also said the city will operate two wait lists — one for homeless/at-risk categories and one for general low-income applicants — and that the funding made possible a small set of tiny homes that will be tenant-paid rental units rather than fully subsidized units. “Out of the nine units, four will have to be set aside for homeless that they will have to meet one of the categories,” staff said during the meeting.

Council members expressed frustration that the project’s original veterans-centered label had been retained in some documents after the change. One council member requested a timeline and documentation showing when the scope changed; another urged staff to keep veterans’ needs prioritized through referrals and casework despite the broader eligibility.

Action and direction
Council approved the item and directed staff to return with supporting documents and the timeline the council requested. Staff said they will continue coordinating with the veterans referral effort the city maintains and will report back with specifics about wait-list management and any preference mechanisms that can be used without violating HUD rules.

Ending
Staff said construction and tenant-selection procedures will be brought back to council for final approvals and that the city will continue to monitor the referrals list for homeless veterans to help place eligible households when units become available.