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Monday, August 07, 2006

Choosing between the poor and the poorer

It appears that the Grand Forks City Council is set to change its policies regarding the use of Community Development Block Grants, federal funds aimed at helping the poor and working poor.

I think the policy is shifting closer to the latter and away from the former. The reason I say that is because, tonight, the council agreed in principle to shift $200,000 out of this year's $1.5 million in CDBG away from non-profit agencies and towards helping poorer homeowners pay off their special assessments.

The benefiting areas are roughly downtown and adjacent areas, around UND and around the Grand Cities mall. These neighborhoods qualify as low- to moderate-income areas.

I know. It's a story that's got "b-o-r-i-n-g" written all over it -- which may explain why it slipped under the City Beat's radar -- but the tiny bleeding liberal side of me is warming up to it.

The council's decision Monday reflects an policy laid down by the council's influential finance and development committee two weeks ago. You know it's influential when it has the word "finance" in it. But I skipped the meeting because, generally, I know that when CDBG is on the agenda, it's gonna be two hours of 10-grands-to-this-group-and-20-grands-to-that-group with intermittent squabbling in between.

Too bad I wasn't there.

But, according to urban development director Greg Hoover's report, here's what the committee decided:
1) United Way convene a meeting among nonprofits to make recommendations for increasing service coordination and reducing administrative costs; and 2) affordable housing be established as a primary goal of the CDBG program.
The goobledygook in the first goal just means the council wants non-profits to move in together and share expenses like receptionists and photocopiers. The second goal is interesting because it means some of the money will go towards homeowners, who, let's face it, are poor but can at least afford to own a house.

All of this is pretty kosher as far as I know. CDBG programs must meet three goals: 1) Benefit low- to moderate-income people, 2) eliminate slum and blight and 3) address an urgent community need.

I guess I was a little surprised, though, because I tend to think of CDBG as going towards groups such as domestic abuse victims, the disabled and the poor. They're not the only ones but they're the ones that need the help the most. They certainly would seem to need more help than someone that can afford to own a home.

The other side of the argument, as Council President Hal Gershman articulated, is non-profits would free up more money if they'd only move in together. He said he'd suggested they do so about six years ago and, more recently, United Way's Pat Berger had been trying to make that happen. But she only got one other agency to join her effort, The Village Family Service Center. Other agencies basically said "Thanks but not right now."

CDBG money, by the way, has been getting scarcer and city officials have said they fear it will get worse.


Blogger cole505 said...

Man why don't they spread a little of that money to all the homeowners in Grand Forks. I know my property taxes or specials are going down anytime soon...

10:46 PM  
Blogger Tu-Uyen said...

A pretty big chunk of sales tax revenues already go towards property tax relief and infrastructure. You just don't see it because it goes straight to the budget, which means less of your property taxes have to go towards the budget.

11:13 PM  
Anonymous Anonymous said...

Sometimes you can be really poor and a homeowner at the same time. Once in a while chance brings a cheap-ish house together with a low-income family. If it's financed by the FHA (Federal Housing Administration) you don't need a down payment, just a lower amount of $ to pay points and such. Often your mortgage payments will end up being less than the rent you were paying. Or let's say that you once were able to afford a house but fell on hard times and now are low income. I'm just saying that not all poor people are renters or homeless. Lots do own houses, just not the best of houses, and barely squeak by with their low incomes.

8:54 AM  
Anonymous vcsuvike said...

This is a great idea to help people get into some decent housing. Low-income and affordable housing seem to lack in most communities. This should help some.

9:22 AM  
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10:39 AM  
Anonymous Anonymous said...

Taking away $200 K from the poor and needy to try force non-profits to consolidate makes little sense. Why is the City Council interfering with the marketplace and business operations? How about consolidating all liquor stores to reduce the cost of beer and wine? Of course then you would have a monopoly and more bureaucracy so prices would go up. Lean non-profits cannot be made more efficient by consolidation. To cap it off, Gershman asks for non-profit consolidation when he did not support their effort to increase efficiency and productivity and move into the corporate center, which stood empty for 8 years because. And he thinks they can get more rent. ow much rent does an empty building generate? A good investigate reporter can dig up a good story.

7:16 PM  
Blogger Tu-Uyen said...

Anonymous with the affordable house: Thanks for the note. I forgot about those fed programs that help poorer families buy a house. I guess it makes sense to make it possible for them to keep that house. Still, robbing from the poorest to help the poor seems kind of a bad strategy. I wonder if there's other sources of funding. Sales tax, maybe?

Anonymous lecturing me on what a good investigative reporter can dig up: Yeah, I did that story already and made a point of noting how long the building's been empty. There was a letter to the editor on that one. Wish I had the blog at the time so you all could comment.

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7:54 PM  
Anonymous Anonymous said...

$200,000 spread over 3 areas of the greater downtown area, the area north of UND and the area near the Grand Cities Mall would save $50 of taxes for 4000 homes, or about $4/month. And for this we take money from helping victims of domestic abuse, the disabled and the homeless? That doesn't buy much beer or wine from Happy Harry's or buy gas. Hope you interview the non-profits for a follow up story.

9:32 PM  
Blogger Tu-Uyen said...

I'm on it.

9:34 PM  
Anonymous Anonymous said...

Maybe Hal will be nice enough to walk door to door and hand all the residents 4 bucks.

What a clown that dude is!

1:20 PM  
Blogger Tu-Uyen said...

I didn't think real hard when I made the last comment. But you should realize that specials aren't assessed uniformly. It depends on which streets need repaving and they don't all need repaving in any one year.

So, if next year -- pull a name out of the hat -- 20th Ave. S. is repaved, homeowners on that street will pay all the costs. Let's say the section being paved contains 40 houses and the job costs $100,000, that's $2,500 per house.

If this were the only project in any of the low- to moderate-income areas next year, the city could use just half of the $100,000 to buy down the whole project. This would leave the homeowners with a $0 tax bill.

It's not necessarily a stupid idea. Even if you cut the $2,500 specials per homeowner by just a quarter, that's still pretty good.

2:39 PM  
Anonymous Anonymous said...


I'm not even sure that this genius knows that the proposal is to divert CDBG funds directly to needed infrastructure projects that would otherwise be special assesed... even though that point is plain in the article. The funds could pay for projects in areas that meet specific parameters according to Federal requirements.

Nobody is saying we should spread out $200k across the board for $5 tax breaks for everyone. That was never mentioned at the meeting, nor in Tu-Uyen's article, so anon is either an idiot or is trying to deliberately decieve.

Also, it's the council's right to fund other worthy causes if they feel the current recipients are not spending money effectively. That's a big reason financial statements are standard for any grant application, public or private. Don't expect to be granted money from any source that disagrees with your key business decisions.

Note there is a difference between consolidating organizations and co-locating to reduce overhead costs. You can argue that the JDA is holding out for too high of rent with the little corporate center, but getting denied that location because the city rejected a lowball offer is not what killed the NPO colocation effort. There are plenty of spaces to rent in town at a variety of prices.

4:22 PM  
Blogger Tu-Uyen said...

Woo! Appreciate the points.

Also, it's the council's right to fund other worthy causes if they feel the current recipients are not spending money effectively.

I agree with you. My thought, though, is that CDBG and other funds given to nonprofits is a kind of outsourced welfare system. So diverting funds from nonprofits to homeowners, however poor, is basically cutting back on that welfare system. I think your point would be more cutting if we are talking about diverting funds from one nonprofit to a more worthy nonprofit.

4:41 PM  
Anonymous Anonymous said...

This is the same anonymous with the affordable house...just thought of a (perhaps) parallel example from 30 or so years ago. My house is on the near south side. Thirty years ago the city did sewer separation work on many streets (splitting sanitary and storm sewers). This area was full of low income homeowners and money was found somewhere to fund the paying off the special assessments for us. I don't know how we would have ever paid for it if money hadn't been found. So, Tu-Uyen, your comment about helping low-income homeowners with things that help them keep their homes is appropos.

9:37 PM  

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