A recent city memo warns that federal programs the city relies on for housing, infrastructure and mobility face new uncertainty, even as some substantial local projects are designed and ready to move forward.
A Sept. 23 memo from Government Relations Officer Carrie Rogers details the city’s recent lobbying efforts in Washington D.C. and emphasizes that federal funding remains unpredictable which puts more responsibility on state and local leaders to find resources for major initiatives.
The memo arrived nearly two months after Austin lost a $105 million grant for the Interstate 35 cap-and-stitch program, which was initially awarded last year. That funding was lost as part of a national rescission of unobligated Neighborhood Access & Equity awards, even though the city had already committed $104 million in local money to ensure structural supports are included in TxDOT’s rebuild of I-35 through downtown.
In a Sept. 19 letter included with the memo, Mayor Kirk Watson urged Austin’s congressional delegation to protect Community Development Block Grant and HOME funds, calling them “essential to affordability, infrastructure, and homelessness prevention.” Watson also raised concern about proposals that would restructure or consolidate housing programs in ways that reduce local discretion.
The memo also reflects activity in Congress, where several major housing bills are advancing. In late July, the Senate Banking, Housing, and Urban Affairs Committee advanced the ROAD to Housing Act of 2025, aimed at expanding housing supply and improving affordability. In the U.S. House of Respresentatives, lawmakers have introduced the Identifying Regulatory Barriers to Housing Supply Act and the Housing Supply Frameworks Act, both intended to address local land-use restrictions and permitting delays. City staff noted these measures to illustrate how federal debates on regulatory reform could shape Austin’s own affordability strategies.
City leaders have also pressed for FEMA’s Building Resilient Infrastructure and Communities and Flood Mitigation Assistance programs, which support flood control and critical infrastructure. In a Sept. 18 submission to U.S. Senators Ted Cruz and John Cornyn, Watson requested full funding for those programs and restoration of recently canceled grants.
In early September, Homeless Strategy Office Director David Gray traveled to Washington, D.C. with partners from the Ending Community Homelessness Coalition and Community First! Village. Meetings with the Department of Housing and Urban Development, the Veterans Administration and members of Congress focused on the city’s work to move more than 4,000 people into housing last year, and clearing 1,500 encampments. City representatives stressed the need for regulatory flexibility and stable funding streams from the federal level to continue local efforts.
On transportation, Watson and representatives from the Austin Transit Partnership (ATP) met early last month with Federal Transit Administration and White House staff to provide updates on Project Connect. While the city seeks continued federal partnership, the memo notes that recent state legislation could have threatened the local financing structure for the $7.1 billion program. Bills introduced earlier this year attempted to restrict Austin’s ability to transfer property tax revenue to repay ATP bonds, raising questions about how future federal grants could be leveraged if that authority is curtailed.
The memo’s attachments include a list of shovel-ready projects that highlight the city’s priorities and the stakes of uncertain funding. Among them are multimillion-dollar storm drain upgrades along Walnut Creek and East Bouldin Creek, intersection improvements on South Lamar Boulevard and William Cannon Drive, and flood-mitigation projects in Oak Park and the E Martin Luther King Jr Blvd transit-oriented development area. Budgets for the listed projects range from about $1 million to nearly $50 million.
Beyond funding, the memo catalogs recent rulemaking comments filed by the city. Those include opposition to rescinding federal greenhouse gas standards for vehicles, citing local climate impacts; requests for stronger oversight of Amazon’s proposed drone delivery operations near Austin; and coordination with Austin-Travis County Emergency Services on the Texas Manual on Uniform Traffic Control Devices.
With Congress expected to begin the next fiscal year under a continuing resolution, city leaders do not anticipate clarity on appropriations until later in the year.
For now, the city is relying on a combination of local funds, targeted state and federal partnerships and regulatory reforms to advance its projects. The challenge, Rogers noted, is to ensure that “local decision-making” remains central as the federal landscape shifts.
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