Sugar Hill on Stone Affordable Housing Receives $500,000 Grant

Published on February 19, 2026

Sugar Hill on Stone, a key City of Tucson affordable housing development, received a $500,000 grant from Housing is Healthcare Fund, a collaborative effort among Arizona Medicaid Health Plans. This development is Phase II of the $50 million HUD Choice Neighborhoods Implementation (CNI) Housing Strategy in the Thrive in the 05 area.

Sugar Hill on Stone will contain 108 bedrooms in 66 units of affordable housing for individuals and families, some of whom are currently residing in the Tucson House, formerly the City's largest public housing complex which is undergoing a muti-year full renovation. The development will inject investment in Sugar Hill, a historically disenfranchised and disinvested community north of downtown.

Estimated development costs are more than $26 million.

The development is largely financed through the Low-Income Housing Tax Credit (LIHTC) award the City of Tucson has received from the Arizona Department of Housing. The development site sits along the City's planned Bus Rapid Transit corridor on North Stone Avenue.

Construction on Sugar Hill on Stone, at 1910 N. Stone Ave., began in June 2025 and is expected to be completed by the end of 2026. Amenities include in-unit washer and dryer, dishwasher, free wi-fi, playground and BBQ area, solar covered parking and rooftop solar, and secure bike parking. The new development is close to Doris J. Thompson Park, Donna Liggins community center, and the downtown campus of Pima Community College.

Sugar Hill on Stone is a project of El Pueblo Housing Development (EPHD), Housing and Community Development's nonprofit development arm. EPHD and the City of Tucson have 10 projects in planning & development that will deliver over 1,200 units of affordable housing.

The development is largely funded with Low-Income Housing Tax Credits (LIHTC) that will produce more than $21 million of private funding into the project. The City of Tucson received the award through the Arizona Department of Housing LIHTC process.

In 2023, the City received the $50 million CNI grant from the U.S. Department of Housing and Urban Development. The eight-year grant is centered around residents, housing, and neighborhoods in the Thrive in the 05, a neighborhood reinvestment initiative. The bulk of the funds will be directed at rehabilitating Tucson House, and to create additional affordable and transitional housing. Other current projects include Amazon Flats on West Miracle Mile and future development at Stone and Speedway.

This collective investment demonstrates the shared commitment of all participating Medicaid Health Plans to address housing needs across Arizona. Since 2020, the Medicaid Health Plans have provided $14.8 million through 36 grants.

The Housing is Healthcare Fund addresses Arizona's rising affordability crisis, recognizing that stable housing is a key health-related social need and essential to improving quality of life for all Arizonans. Housing built by these grants will serve residents across the state including Arizona Health Care Cost Containment System (AHCCCS)-eligible individuals and families.