COLUMN: How Guillory’s business grant program is bad policymaking

Photo by Travis Gauthier
Mayor-President Josh Guillory wants to use more than $1 million in CDBG coronavirus funds and matching LEDA dollars to help small businesses; housing advocates argue the funding is needed for those left homeless or facing that prospect due to the pandemic.

  •   A series exploring the highs and lows of Lafayette’s economy, providing critical commentary about what’s working and what’s not.

On Tuesday, the city and parish councils will meet to discuss Mayor-President Josh Guillory’s proposal to allocate around $850,000 of federal funds, plus another $200,000 from Lafayette Economic Development Authority, to create a new forgivable loan program for small businesses impacted by COVID-19. His stated purpose for this program is to help the estimated 2,800 businesses that were shut down by state and local government action but were unable to receive federal funding from the CARES Act. 

In principle, it’s a good idea. If we can help these businesses stay open, that could prevent people from losing their livelihoods. Given that we’re facing an unprecedented unemployment crisis, with more than 30,000 people filing for unemployment in our parish since March, finding ways to subsidize our most vulnerable small businesses makes sense.

But there’s more to this story. Unfortunately, the way Guillory has conducted this process is at a minimum an example of bad policymaking and at a maximum suggests an unwillingness to tackle a serious problem. 

Avoiding public scrutiny

This $850,000 in emergency federal funding comes through the U.S. Department of Housing and Urban Development’s Community Development Block Grant program (CDBG). Normally, any decisions about how to allocate CDBG funds require a 30-day public comment period. For this emergency funding, that public comment period was shortened by HUD to five days. 

After LCG received the money, a disbursement associated with the CARES Act, it asked for suggestions from area nonprofits on how to spend the money and kicked off an open public comment period in early May. It got about 30 applications totaling $3 million, but before the comment period ended, LCG switched gears and announced Guillory’s new proposal. That brings us to the current situation. A second public comment period on the administration’s proposal began Thursday and ended last night. At Tuesday’s joint emergency meeting (which starts after the 5 p.m. Parish Council meeting), the city and parish councils will decide how these dollars should be distributed.

This program was rolled out in a way that gave the shortest possible public comment period, an issue exacerbated by the inclusion of a weekend. 

During this period, very little information about the details of this program and how it might work were provided by the administration. Limited information on the proposal was made available Monday, at which time LCG and its partners at LEDA said more details would come later. Additionally, the administration has chosen to ignore the cries for help coming from local nonprofits working to address Lafayette’s burgeoning housing crisis and has, at times, dismissed their concerns entirely. 

Plans for disbursing the funds will be finalized during a special emergency meeting, which speeds up the normal protocols of releasing the meeting’s agenda the week before, introducing an ordinance at one meeting and then getting the ordinance approved two weeks later at the next meeting. In other words, council members — and the public — are left with little time and little information to make such a big decision. 

While the desire to get this capital deployed as quickly as possible is understandable given the urgent need, the effect is to minimize opportunities for public engagement.

Misrepresenting the purpose of this funding

In addition to not affording constituents the opportunity to properly engage, the administration has also been making assertions that obscure the intent of this funding. 

CDBG dollars are supposed to be used to support the needs of low- to moderate-income people to have access to affordable housing and economic opportunity. In recent years, Lafayette has primarily used this funding to repair houses for those who can’t afford to do so and to subsidize loans for first-time homebuyers.

For this particular $850,000 that was approved as part of the CARES Act, HUD waived or altered many of the restrictions on how this money can be spent. For example, normally only 15% of CDBG funds can be applied to help cover the cost of rent and mortgage payments, but that limit was waived entirely.

Guillory has framed this as a choice between saving businesses or people facing homelessness. “Every dollar siphoned off from these purposes is a dollar taken away from low- to moderate-income businesses with nowhere else to turn and given to entities with lots of other options for funding,” he argued at Monday’s press conference — and has continued to push via social media. 

What he’s doing here implies that this money was intended to go to economic development in the first place, which simply isn’t true. What is true is that this money was given by the federal government to local governments so they can decide the highest and best use of these funds to address the immediate needs of low- to moderate-income people in response to COVID-19. That’s the debate we should be having. But it’s not. 

Ignoring the scale of the housing crisis

LCG has consistently downplayed the severity of what housing advocates say is a serious housing crisis. On Monday, Guillory misstated the number of people in emergency shelters, repeating the same error made by his communications director in a previous statement — that there are 250 people in temporary housing when it’s actually 250 households that include 400 people. The mayor-president compared his incorrect figures to the estimated 2,800 businesses that were forced shut down by the stay-at-home order but that didn’t qualify for federal subsidies. He then went even further and referenced potentially tens of thousands of suppliers that would also be hurt if these businesses were to close permanently.

So the challenge for the mayor-president’s comparison is that it completely glosses over the potentially catastrophic housing crisis the community faces. The number of people experiencing homelessness has risen dramatically the last few weeks, and that’s despite the statewide moratorium on commencing eviction processes. That moratorium was extended to at least June 5 (for housing backed by the feds, the CARES Act prevents landlords from evicting tenants and/or charging them late fees for non-payment until July 25), so a wave of evictions is expected to come crashing through our lower income communities once those protections expire.

Catholic Charities of Acadiana, the largest shelter operator in the region, says an estimated 785 people are experiencing homelessness in Acadiana, up 58% since the start of the pandemic. There are 400 people, including 111 children, living in emergency hotel housing, up from 75 pre-COVID-19. Catholic Charities was among the nonprofits asking that the money in question go to help stabilize families, requesting $300,000 to spend on utility assistance. 

Meanwhile, more than 30,000 people have filed for unemployment in our parish since March. While their livelihoods are being supported by the extra $600 federal supplement to unemployment, those supplements will be ending in the coming months. At the same time, more than 5,000 homes in the city of Lafayette are already past due on their LUS bills. LCG is extending payment plans, but it’s unclear whether people can even keep up with deferred payments. 

We are literally in a situation where hundreds if not thousands of additional people are facing housing instability in the months to come, yet the administration has outwardly declared this not to be a crisis. 

Misrepresenting the money that’s available for housing

When asked what he would do about the housing issue, Guillory has said LCG is working with “partners” to address it, meaning the nonprofits warning him about the housing crisis and asking for help. He claims nonprofits have plenty of other places to turn to for funding, arguing they don’t need any more support from LCG. 

Yet nonprofits are saying the exact opposite: “Over the past few years, homeless services have been lost across the region due to lack of funding. There have been very few new dollars raised or granted towards homeless services since COVID began compared to the demand,” Catholic Services’ Kim Boudreaux wrote in a letter addressed to the administration and councils disputing LCG’s characterization of the resources available.

A primary funding source from the federal government to address the housing needs of vulnerable people is precisely these CDBG dollars that Guillory is choosing to withhold from this purpose. It’s also not clear what additional funding will come available from the federal or state government in the future.

Additionally, among the 25 largest nonprofits in Lafayette Parish, total donations have fallen significantly between 2014 and 2018, generally tracking the fall of our economy as a whole. And local giving will undoubtedly take an even bigger hit this year given the economic depression we’re enduring.

Not only that, but Guillory’s assertion that these nonprofits can apply for grant funding ignores the fact that most grant cycles can take months before any funds they’re fortunate enough to be awarded are received. But the emerging housing needs of our community can’t wait that long, especially when we may only be in the early stages of a housing catastrophe. 

Ignoring opportunities to maximize the impact of limited dollars

The reality is this funding can be used for all sorts of different programs. It can be used to help people pay their rent or utilities. It can repair and rehabilitate houses or build new affordable housing. It can fund homeless shelters or food delivery to vulnerable populations quarantined at home. It can provide job training to the newly unemployed. It can even be used for out-of-the-box ideas like what Shreveport’s doing by using some of it to buy machines that make personal protective equipment. 

Guillory isn’t alone in his desire to use some of this funding to help small businesses, as evidenced by The Current’s own reporting on what other cities in Louisiana are doing. But he’s at least in the minority among Louisiana’s major cities in deciding not to use any of this funding to help address the immediate housing needs of his constituents. 

And realize that it’s not just this additional $850,000 of CDBG funding we’re talking about. In recent years, LCG has prioritized spending these funds on repairing houses and subsidizing loans for first-time homebuyers. While in the midst of this crisis, serious consideration should be given to how we manage CDBG dollars in general to help our most vulnerable neighbors survive.

This is not how good policy gets made

We’re tackling a thorny issue without allowing time for public scrutiny. Bad information abounds, and Guillory is essentially ignoring the scale of a looming housing crisis. Also problematic is that he’s been misrepresenting the state of other available funding available to organizations he’s characterized as his partners. And he’s ignoring opportunities to maximize the impact of these limited funds.

Regardless of the merits of his forgivable loan program proposal, this is not how good policy gets made. This is not how you build trust with your constituents and partners. This is not how you establish yourself as a fair and honest broker.

What we have to realize moving forward is that there are no perfect solutions to the problems we face. The scale of these challenges far outstrips the resources available. As a result we’re going to have to resolve a series of hard choices just like this one in the months ahead.

But in order to do that effectively, we have to adhere to the basic principles of good policymaking, where we make every effort to properly engage and inform the public and stakeholders, where we are forthright and honest about what we believe is the highest and best use of public dollars to further the public’s interests, and where we respect the need to balance the desire to help businesses and people. 

It’s OK and in fact it’s inevitable that we’re not all going to agree on every decision that gets made. But what’s not OK is for our elected officials to refuse to engage in forthright, respectful dialogue with the people they serve.

Locally-Sourced-Badge

Help us keep the lights on, Lafayette

Give today and support news that matters

Donate Now
About the Author

Geoff Daily created FiberCorps and helped launch the Lafayette General Foundation. He now works as a launch strategist.

2 Comments

  1. And yet no one, including this journal, as said anything about the $1.5mm LCG (yea that loan ain’t going to be paid back), and $500m Acadiana Planning Commission has given away, to build 40 1 & 2 bedroom apartments at a total cost of $16mm. That equals $400,000 per apartment at a cost of $500 per sq. ft. That will make it the most expensive apartment complex built since the Uptown Lofts. Which was another project sold to tax payers on the premise of helping by government spending to stimulate economic development to help the poor. And guess hows that’s going. So if the premise of the article is whether this “economic development” program is the most wasteful and hurt the poor, then I think you should compare it with other programs. I think you will find the are all nonsense from an economic point of view.

    Log in to reply

    1. that’s horrifying information. do you know where i could find out more? i would like to know which housing agencies and advocates were involved in either or both projects you address.

Leave a Comment