This week, Cleveland City Council members returned to the budget hearing table to vet Mayor Justin Bibb’s proposals for how to spend the city’s expected allotment – nearly $34 million – of Community Development Block Grants and related federal grants, often referred to as CDBG funding.
What are Community Development Block Grants?
The grants are part of a federal assistance program that aims to build stronger and more resilient communities by providing additional money to local governments for community and economic development work. Learn more about how the grants work and the history of the federal program in this explainer from Cleveland Documenter Jenna Thomas.
During this week’s hearings, council learned about new priorities for how the city wants to spend CDBG money. The city has a host of programs that receive funding to do things such as maintain vacant lots and help seniors repair their homes. Cleveland’s community development corporations, or CDCs, also compete for money to be used in the neighborhoods they serve.
In recent years, the city hasn’t hit its spending targets for these federal grants and has struggled to meet goals for housing repair and programs.
Here are some of the key points and questions from the hearings:
Senior housing help lacking
Cleveland City Council members peppered officials from the Community Development Department about the Senior Home Assistance Program (SHAP) and why residents in need had to wait so long for help in fixing up their homes.
What is SHAP?
Michiel Wackers, assistant director of Community Development, said work on 85 homes will be completed by June. The program expects to complete 100 homes by the end of 2023.
Louise Jackson, commissioner of Neighborhood Services, said one challenge is the scope of work required.
“When we go in for one thing, we fix everything else too,” she said. The program may agree to replace the roof on a house but wind up also replacing the front porch so it doesn’t collapse and take the roof with it. The contractor will do pest control if necessary and fix other problems inside houses.
“We do so much,” Jackson said, noting that the goal is to help people age in place.
Finding enough contractors to take on the work has been a challenge, Jackson told council. Her department uses a dozen contractors for SHAP projects, and most have only two or three crews.
Cleveland is working with the Urban League to help contractors grow and to recruit new ones, she said. Most are the same contractors also doing lead remediation in homes.
“We really need to focus on building [the] capacity of contractors,” said Ward 14 Council Member Jasmin Santana.
Council Member Joe Jones said he doesn’t have faith in the SHAP or Home Repair programs. Understanding that federal money comes with rules, he said unless changes are made it’s going to be “the same old crappy program.” Elected officials are often the ones held responsible for whether the programs work, he said. One issue that is raised every year is the issue of contractors.
“You should have someone on your staff that is doing nothing but working to bring contractors in,” he said. “If we can’t get this program right, then we have a problem,” he said.
City can’t fund landbank staff with CDBG money
Cleveland Community Development Director Alyssa Hernandez explained to council members that the U.S. Department of Housing and Urban Development will no longer allow the city to use CDBG money to support staffing the Cleveland Land Bank, at least in the way it was being used.
City officials said that some federal money could be used to, for instance, build affordable housing on land bank lots but not to run the program.
The city has 18,000 parcels of property in the land bank, officials said. Cleveland has an estimated 30,000 vacant parcels.
The land bank program is in transition, Hernandez said.
“It’s a program with longstanding challenges and recent challenges,” she said. The department is planning to “decouple” the program from the federal funding to be in compliance. The department will present a new plan on how to operate the land bank after council’s summer recess, Hernandez said, and the idea is for the program to be self-sustaining.
Hernandez acknowledged the lack of communication with council people and with residents who inquire about properties. “I completely understand your frustrations,” she said.
The city land bank has not had a manager for more than a year, and the city is looking to fill that position.
Several council members questioned the rules around selling land bank lots. City officials said state law requires lots be sold for no less than fair market value. In some cases, exceptions are made where parcels are sold for $200 to residents for side yards or to develop permanent affordable housing. But even those rules aren’t always followed.
The process must be re-evaluated, Hernandez said.
“I know that developers have gotten land for $200, and that is the sweetest game in town,” she said. “That is not appropriate. That will not help us to self-sustain this program going forward.”
Council Member Stephanie Howse urged council to be involved – to do the work – to come up with an equity-based model for selling land bank parcels. She told a story about a lot her mother maintained for years but was never able to purchase.
“Why can’t Cleveland residents have a part or a portion of equity of this land they have put their sweat, their tears, their equity into?” Howse asked.
“I hear you, I agree with you. That is the equity work we are doing here,” Herndandez responded.
City says CDCs ‘underperforming,’ council members push back
Council members brought up concerns about the way federal CDBG money is distributed to the city’s community development corporations, or CDCs.
For a full rundown of this discussion and more, check out Cleveland Documenter Dan McLaughlin’s Twitter thread:
The city submitted a five-year plan to the U.S. Department of Housing and Urban Development (HUD), and HUD evaluated the city on how well it met the goals of that plan.
The city was not meeting those goals, so the Bibb administration decided to limit the number of uses for the money, mostly to focus on repairing housing.
“We are doing that, to be frank, because our accomplishments were low in several areas…. CDCs have been underperforming,” Hernandez said.
Council Member Kris Harsh questioned how the CDCs were supposed to carry out housing repair activities if the money is a reimbursement program, meaning they don’t get the money until the work is done.
“I would venture to say that 90 percent of what they do is unfunded,” said Harsh, who used to work for MetroWest, a CDC that serves Clark-Fulton, Stockyards and Brooklyn Centre.
City officials said that CDCs compete for the money, so they should be able to do the work.
Council Member Rebecca Maurer said that there’s a philosophical divide in what is happening with the city, CDCs and Cleveland Neighborhood Progress, which provides money and technical and training support to the CDCs. Maurer described the issue as similar to the challenge of parenting a teenager. (Watch below.)
Activities and accomplishments
Council members discussed “activities” with Community Development officials several times. Some of the federal community development grant programs are grouped as “activity grants.”
What does that mean?
Activity grants fund programs focused on housing and commercial development. The CDBG Budget Book organizes activity grants into several categories, based on who the recipients are and what the money will be used for.
Neighborhood development activities (NDAs)
These initiatives focus on housing development and homeownership, commercial development, and other public services. Officials are proposing to distribute $435,294 to each of Cleveland’s 17 wards for the development activities in 2023, the same amount budgeted for the 2022 program year. Council often re-directs the money to CDCs; these grants accounted for 85% of operating support to CDCs in 2022.
Community development corporations (CDCs)
Activity grants that the Department of Community Development sends to CDCs make up another category in the budget book. Cleveland has more than 20 nonprofit CDCs that aim to revitalize neighborhoods. Cleveland officials propose giving a little over $1.5 million to CDCs for activity grants, which are also focused on housing and commercial development. The department set aside $1.2 million for this purpose in 2022. When CDCs complete activities, the submit proof of their “accomplishments,” which get counted.
Here’s a 2021 Twitter thread from Jessica Trivisonno on how CDCs get this “activities” funding based on the work they accomplish. (Trivisonno is now the city’s senior strategist for the West Side Market.)
Citywide activity grants
Activity grants for work done by city departments or by other community groups make up this category. They have been used for home ownership education, foreclosure prevention and financial literacy programs as well as for grass cutting, snow shoveling, and leaf raking programs for older adults and people with disabilities.
‘Doing stuff but not getting things done’
Howse said that all of the city’s “activities” aren’t changing the trajectory of the city when it comes to addressing poverty. (Watch below.)
Prioritizing ‘Model Blocks’
Council Member Anthony Hairston asked: How is the city prioritizing the money awarded to different neighborhoods?
What is a Model Block?
His question followed remarks by Maurer, who said she wants to make sure money is not all going to the same neighborhoods. Ward 12 has a tremendous need for “in-fill housing,” or new housing on lots where old houses have been demolished, she said.
The Model Blocks program has struggled to complete projects in recent years.
Community Development Director Hernandez said that while her department is eager to support efforts to build new housing in Cleveland, “making sure that we can keep the folks who have been committed to their neighborhoods in their neighborhoods is extremely important to me.”
Banks not serving BIPOC Clevelanders
The new Neighborhood Reinvestment Coordinator, Aaron Kinney, who helps manage the city’s relationships with banks, has been meeting with the institutions that hold Cleveland’s money.
Those banks don’t have great track records of lending to residents who are minorities. Officials shared information on the lending of three main banking partners: JP Morgan Chase, U.S. Bank and KeyBank.
“These numbers are beyond not good,” Hernandez said about the statistics Kinney shared.
But the banks are willing to come to the table, and they are looking for leadership from the city, Hernandez said. The city is doing research to figure out what “asks” to bring to the table.
Council Member Kris Harsh talked about the abysmal lending rate of institutions to folks who live in Cleveland because people don’t want to invest in low-income or minority communities. Banks will give rich people money all day long but “try and be poor and get money.”
Money is like a magnet, he said. “Money wants to go where money is and money wants to run away where money isn’t.”
Harsh asked whether the city would work with banks to make money available to minority contractors who are doing work with the city.
Yes, Kinney said, though that might work better with smaller institutions like Dollar Bank that have more of a drive and focus on “relationship based lending” because they want to establish trust with customers.”
What did Documenters cover?
Documenters tracked the two-day hearings, honing in on the city’s home repair programs, the Housing Trust Fund, debate on the funding source for CDCs, and more. Check out coverage from Documenters Daniel McLaughlin, Carolyn Cooper, Marvetta Rutherford, Jenna Thomas, and Tina Scott.
CDBG hearings included lots of important discussion and questions about how the city will use federal money to revitalize neighborhoods and businesses and to support residents. There also were some memorable moments and laughs. Here are a few:
Kerry McCormack’s ‘sexy’ Budget BINGO win
TV 20 ends CDBG budget hearings on a soulful note
Signal Cleveland team members Doug Breehl-Pitorak, Anastazia Vanisko, Mary Ellen Huesken and Lawrence Daniel Caswell contributed to this report.