Return to floridacdc.org mainpage Coalition's Policy Recommendations to Miami-Dade County's Consolidated Plan for FY2003 ~Proposed 5 Year Consolidated Plan (2003-2007) In the coming years, the South Florida Community Development Coalition would like consideration to the following policy items given to the Consolidated Planning process for Maimi-Dade County: Incorporate Certain Policy Elements of Carrie Meek's CDBG Proposal with the Upcoming Years Consolidated Plan Last year, Representative Carrie Meek of Miami is introducing a bill to improve the CDBG Program by: directing a minimum amount of CDBG to benefit "low" income people and minimizing "benefit inflation" through methods of counting benefit to lower income people that are proportionate to their actual benefit 1. Increase the "Primary Objective" to 80% Benefit to Lower Income People: The "Primary Objective" of CDBG always has been to "principally" benefit lower income people. Currently, the law requires that at least 70% of a jurisdiction's CDBG be used to benefit lower income people. The bill raises the minimum to 80%. The increase to 80%, especially in combination with other provisions in the bill, highlights and strengthens Congressional intent that, in the face of a severe affordable housing crisis and changes in welfare law, CDBG must "principally" benefit lower income people. It sends a signal to jurisdictions that use of CDBG for activities such as airport runways, US Post Offices, museums, and untold miles of concrete are not consistent with Congressional intent. 2. Direct a Minimum of 40% to "Low" Income People: The Meek proposal requires that, at a minimum, 40% of a jurisdiction's CDBG funds be spent on activities that directly benefit people with incomes below 50% of the areawide median income. Even though jurisdictions' Consolidated Plans universally state that "extremely low" and "low" income people have the most acute needs, far too often jurisdictions use most of their CDBG for activities benefiting people with incomes at the relatively high level of 80% of the areawide median income. 3. Proportional Treatment of "Benefit" to Lower Income People: The bill diminishes "benefit inflation" by introducing a method to more fairly count the degree to which lower income people benefit from CDBG activities. CDBG expenditures will be counted as benefiting lower income people based on the actual amount of CDBG used, and only to the extent that lower income households are assisted. Currently, if a jurisdiction spends $500,000 on a road in a census tract where 52% of the households are lower income, that jurisdiction reports to HUD that all $500,000 of the CDBG benefits lower income people, rather than the proportional amount of $260,000 ($500,000 x .52). The bill requires proportional counting for activities that claim to benefit lower income people on an "area basis" or through job creation/retention. For housing activities the law already requires proportional counting; however, HUD's regulations dilute the law's intent by using the "total development cost" rather than the amount of CDBG in a project. The bill corrects this benefit inflation practice. Activity by activity, without proportional counting, jurisdictions readily give the impression that over 70% of their funds "benefit" lower income people. 4. Prevent Use of the "Area Benefit Test" in Central Business Districts: The bill adds to the law, the current regulatory language which limits the use of the "area benefit test" to areas that are "primarily residential in character". To determine whether an activity serving anyone (eg, a road) "primarily" benefits lower income people, the law requires that the activity be "clearly designed to meet identified needs" of lower income people. HUD regs use the "area benefit test" which looks at the service area of the activity; if 51% of the residents are lower income, HUD judges the activity to benefit lower income people. Downtowns generally have few residents, but because most of those residents are low income, jurisdictions claim that downtown roads, parks, streetscapes, and fire protection primarily benefit low income people -- when in practice daytime business visitors are the major beneficiaries. Years ago HUD regs sought to prevent this abuse by limiting the "area benefit test" to areas that are "primarily residential in character". Jurisdictions and HUD are ignoring the spirit of the law and the letter of the regulations. By placing the regulatory language in the law, the bill intends to reinforce the spirit of "principal" benefit to lower income people. 5. Assess Whether Lower Income People Are the Primary Beneficiaries: The Meek proposal adds current regulatory language which looks at "the full range of direct effects" of an activity in order to assess whether lower income people are actually the primary beneficiaries. The mere location of an activity in a service area where a minimum of 51% of the residents are lower income does not mean that lower income people are the primary beneficiaries. Roads and bridges are often located in low income neighborhoods, but are designed to get the general population through the neighborhood on their way into and out of the central business district. The law currently requires that an activity "be clearly designed to meet identified needs" of lower income people. HUD's regs reinforce this. However, neither HUD nor jurisdictions are adhering to the law or regs. The added language underscores Congressional intent that CDBG principally benefit lower income people. 6. Improve Lower Income Benefit from Economic Development Activities: The Meek proposal eliminates the "presumption" that lower income people benefit from the use of CDBG for economic development activities simply if employees live in areas that have a 70% lower income concentration or meet the definition of an empowerment zone (or if the business itself is in the latter). Businesses getting CDBG assistance will have to ensure that at least 51% of any new or retained jobs are for lower income people, as is generally the rule. The Creation of a Rational Formula that Links Project Funding and Service Delivery Funding Too often there has been a consistent and profound disconnect between project funding (i.e.. brick and mortar funding) and service delivery (operational support) funding. There needs to be the creation of a formal policy that links recommended project funding with adequate operational support in a rational and realistic manner that will take into consideration the administrative needs of grantees in concert with the number of units funded to produce. Replace "20-40-40" with "50-50" The Coalition seeks to further the effectiveness of the CDBG program by analyzing the County's distributive "20-40-40" policy. Essentially, the policy calls for 20% of the CDBG budget to be set aside for program administration, 40% to be targeted for County Agency activities, and the remaining 40% to be targeted to outside/non-governmental agencies (non-profits, CDCs, CHDOs, CBOs, etc.). A suggested alternative might be a "50-50" policy where 50% of the overall CDBG total is targeted for nonprofit/nongovernmental agencies; and the other 50% being targeted towards County agencies and for program administration of the CDBG dollars. Explore Options for Creating a Two- or Three-year Funding Cycle Year by year RFAs and funding cycles are frustrating experiences for the nonprofit grantees, County administration, and, most likely, the Board of County Commission. The County might want to look to other communities that have "stretched" out their funding cycles. A multiyear funding application may be beneficial for the County and grantees alike. The Implementation of an Pre-Application Process for Potential Housing Grantees and Support for Community Organizing/Leadership Development Each year the number of organizations soliciting the County is growing exponentially for a pool of development funds that is not growing. The County needs to implement a pre-application process that will determine which organizations have a proven track record of successful production and it in turn will fully support. The County should encourage and support those organizations that do not meet these technical standards to engage in community organizing, planning, advocacy, and leadership development. Should there be a need for housing or real estate development, these organizations should partner with experienced housing/real estate developers.