Guillory proposes using HUD coronavirus relief for small business grant programs, not housing assistance

Guillory speaks at a coronavirus press briefing

The gist: Targeting those businesses forced to close by Louisiana’s stay-home order, Mayor-President Josh Guillory wants to use close to $1 million in relief funds to set up a small business grant fund co-managed, and in part funded, by the Lafayette Economic Development Authority. Housing advocates say the money is better used to help stabilize growing housing insecurity in the region. The proposal will go before the council next week for approval. 

LCG was awarded roughly $850,000 in coronavirus relief funds from the U.S. Department of Housing and Urban Development. The dollars, earmarked specifically for coronavirus disaster recovery, come from the Community Development Block Grant pool, the most flexible of the federal housing program’s outlays. Noting details yet to come, Guillory says the program will “de-politicize” the process of distributing community development dollars and go to businesses unable to access money from the trillions of federal relief dollars issued to prop up the nation’s economy. 

“We’re talking about businesses with nowhere else to turn, so these funds are a real lifeline for these enterprises in need,” Guillory said, announcing the measure. He listed nail and hair salons, musicians, massage therapists and other small entities he says were largely left out of the U.S. government’s loan bonanza, which was indeed criticized for failing to reach Main Street businesses. Asked whether LCG could quantify the number of businesses that would meet that narrow definition for aid, Communications Director Jamie Angelle noted the region’s soaring unemployment and reports of businesses shuttering for good. 

But housing advocates say there is a housing disaster looming that this money is better suited to address. HUD waived a 15% cap normally put on direct public assistance uses — utility, rent and food assistance, for example — and streamlined some of the obstacles that otherwise limit the program’s usefulness for safety-net support. Economic development programs, like what the mayor-president proposes, are an acceptable use, according to a HUD spokesperson. Other local governments have found ways to attack both problems. The city of Monroe, for instance, divvied up its CDBG-CV — “CV” for COVID-19 — funds for utility assistance, mortgage relief and grants to “micro-businesses,” which fit the description of the businesses Guillory’s proposal targets. Still, the path of least resistance carved out in the so-called CDBG-CV funds is for rental assistance, according to housing advocates. 

“Stabilizing housing for low to moderate income households is now the most strategic use of the COVID-related CDBG funds,” wrote Leigh Rachal, executive director of the Acadiana Regional Coalition on Housing and Homelessness, in a letter to LCG Wednesday afternoon. In her letter, she argues the funds would catch families before they fall into emergency sheltering and provide immediate relief to landlords and even to consolidated government itself, if the money is used for utility assistance within Lafayette. 

Housing instability is rising. The Guillory administration announced last week that 5,000 LUS customers are scheduled for disconnections from their utility services for delinquent payments. Since late March, calls to 211 for housing assistance and shelter have skyrocketed. Rachal notes in her letter that 465 people, including 111 children, are staying in emergency housing, a solution that’s desperately temporary. Calls to Faith House for abuse shelter have increased 20-25%, she goes on to say. 

Housing advocates contend the administration changed course. Several nonprofit organizations applied for the funding, saying they planned to use the dollars for rent and utility assistance, during a federally required open public comment period that ended May 8. LCG informed applicants of its decision to put the money toward a small business program in a letter dated May 6, in the middle of the public comment period. In her letter, Rachal says no recorded public comment asked that the funding be used for economic development, but 20 comments favored housing assistance. Another public comment period begins May 14 for the mayor-president’s proposal, and the matter goes before the city and parish councils on May 19. The councils have to vote to amend Lafayette’s housing plan to accommodate the small business grant program. 

Guillory declined to commit to finding funding for housing assistance. Defending his position, he commended the work of area nonprofits in this space and emphasized that the decision did not reflect a lack of compassion. “I am committed to finding relief for those in need to the extent that I can be,” Guillory said, further asking that his comments not be read as a lack of compassion. He dismissed of the issue in the past, saying flippantly, “there’s no concern,” in response to questions about deepening worry from the region’s nonprofits in April. Following the mayor-president’s remarks Wednesday, his spokesman, Angelle, pointed to state dollars available for housing assistance, digging into the position that Lafayette’s CDBG funds are better used for business owners who couldn’t access federal loans. 

The division over priorities reflects a new phase in the pandemic: coping with dwindling resources. How to manage an extended fallout is a conversation playing out at all levels of government. LCG’s own budget has taken a tremendous hit from a depressed economy, leaving local government officials choosing among priorities for the foreseeable future.