On March 27th the President signed into law the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), which includes $5 billion in Community Development Block Grants (CDBG-CV) funds which are being deployed by the Department of Housing & Urban Development (HUD) in three tranches to both state governments and directly to some local governments. The first tranche allocates funds to entitlement jurisdictions (local governments) and to states for distribution to non-entitlement areas following HUD’s usual formulas. The second tranche is being distributed directly to states in amounts derived from a new formula that takes public health and coronavirus case data into account. The amount that North Carolina (both state and local government) is being allocated are as follows:
- Tranche #1: $47.1 million total statewide
- Entitlement areas: $18.6 million
- Non-entitlement: $28.5 million
- Tranche #2: $28.2 million for use in entitlement & non-entitlement areas.
As the pandemic continues on, North Carolinians face increasing financial difficulties and housing instability. Now that the courts have reopened and the Governor’s Executive Order prohibiting evictions has expired, thousands of households face the possibility of eviction or becoming homeless. Since the moratorium lifted on June 21, there have been at least 10,000 eviction filings statewide. The need for housing and utility assistance grows everyday as state and local governments remain slow to provide relief. NC House Bill 1200, which directs $200 million for mortgage, rental, and utility assistance, remains stalled in the General Assembly until September. One source of funds that are available across the state is CDBG-CV funds.
HUD has provided memos (see links below) detailing eligible uses and regulatory or statutory waivers intended to make CDBG-CV a flexible source of funds to address COVID-19 impacts. HUD staff have indicated that further guidance and information is forthcoming. However to date, HUD has yet to release comprehensive formal guidance or notices on the application and use of CDBG-CV.
A “Fact Sheet on CDBG-CV” is supposedly being reviewed by the Office of Management and Budget (OMB) and will be released in the near future. HUD watchers suspect this may be the “guidance” that has been alluded to. If that is the case, the document’s title suggests it would be wise for jurisdictions to proceed with the information that has already been provided by HUD, rather than waiting for lengthy details on how to proceed.
HUD memos released in April and May have already indicated that CDBG-CV funds can be used to “prevent, prepare for, and respond to coronavirus” through activities that are typical for CDBG funds, along with expanded uses provided by waivers, such as the waiver of the cap on public benefit uses such as rental assistance. These memos have also stated that jurisdictions can make amendments to 2019 and/or 2020 Annual Action Plans that incorporate their expected CDBG-CV allocation amounts rather than waiting for a separate formal process such as that of CDBG-DR. HUD has also reduced the required Public Participation period from 30 days to only five (5) days. The allocation amounts for all entitlement jurisdictions and states have been announced as noted above. Many state or local governments are understandably hesitant to deploy the funds without additional guidance. Some cities and states, however, have boldly proceeded by following the “breadcrumbs” provided thus far to guide their roll out of CDBG-CV rather than waiting for more information.
What Some Areas Are Doing
While most jurisdictions across the country are waiting to use CDBG-CV, there is a growing list of cities and states that have begun the process of accessing CDBG-CV through the expedited plan amendment process outlined by HUD thus far. These jurisdictions are incorporating their stated allocation amounts into 2019 or 2020 Action Plans either as newly added activities/programs or by adjusting the planned amounts for different programs to reflect the addition of CDBG-CV funds. Upon completing the 5 day public comment requirement, these amendments are sent to HUD for approval. Once approved, the funds are added to a locality’s “line of credit” with HUD. Another means of accessing CDBG-CV is to use the funds as a reimbursement source for activities already underway that are related to COVID-19. Some localities in NC have received approval for such reimbursements.
In North Carolina, the cities of Charlotte and Greensboro have moved forward with Action Plan Amendments. Charlotte amended their 2020 Action Plan to provide COVID-19 emergency rental assistance as an added program in their plan. Greensboro added a COVID-19 housing stability program and made adjustments to program amounts in its amendment. Morganton, Lenoir, and Winston-Salem have also made amendments and received approvals to use CDBG-CV.
Elsewhere, the states of Pennsylvania, South Carolina, and Maryland are moving forward with using CDBG-CV to provide rental or mortgage assistance. Maryland announced their program last week as they simultaneously work on plan amendments and expect to have rental assistance in people’s hands by early August.
With the need for housing assistance becoming more dire, it is clear that advocates need to push state and local governments to begin rolling out the use of CDBG-CV funds to address housing instability. Governor Cooper has indicated this week that he intends to end the statewide moratorium on utility disconnections adding more strain to an already tenuous situation for many North Carolinians. A path forward that is not dependent on further guidance has been laid out and it is imperative that public officials move forward to ensure people are able to remain stably housed during the pandemic.
Resources & Examples
Cleveland: (see page 9)