During the 2008 storm, 569 public housing units in Galveston were destroyed. Mayor Lewis Rosen and council members had campaigned earlier this year on a plan to replace public housing with a voucher system that would allow residents to live in private housing either on or off the island.
Federal officials have said agreements for about $580 million in funding that Galveston is receiving to rebuild and repair streets and other infrastructure on the island is tied to the city rebuilding the public housing.
City leaders had approved a similar plan last month but changed it after discussions with federal and state officials. The plan approved Friday was more in line with what federal and state officials had sought.
The U.S. Department of Housing and Urban Development and the Texas General Land Office, which is administering the federal funds in the state, had given the city by Friday to approve the plan or face the loss of the federal disaster recovery money and the forced repayment of money already spent.
City leaders approved the adjusted plan by a vote of 5-2, saying they wanted to move forward.
"I'm going to vote for this because we have to put this behind us and start trusting each other," said Rosen, who strongly opposed rebuilding public housing.
Two Austin groups, Texas Appleseed and the Low-Income Housing Information Service, participated in an agreement with HUD and the state that requires Galveston and other Texas cities to make sure low-income residents benefit from federal disaster recovery money as required by law. Galveston specifically was required to rebuild all 569 public housing units.
If Galveston had failed to live up to the agreement, it could have jeopardized disaster money statewide.
"After so many number of years it's not a perfect document, but I certainly hope that . we at long last have a blueprint before us that will permit the return of affordable housing opportunities to the island," said Joe Compian, a leader of Gulf Coast Interfaith, one of the local advocacy groups involved.
Some Galveston residents and other critics of the voucher plan had said there is not enough private housing on the island to meet the needs of low-income families through such a program and that much of the private housing currently available is substandard.