Faced with mounting crises and uncertain resources, Lafayette’s elected officials chose Tuesday to push all the chips they have in federal relief to a grant program for small businesses, opting not to use any of the emergency funds to directly support households nearing homelessness.
The councils approved Mayor-President Josh Guillory’s proposal to use $852,000 in coronavirus relief funds from the U.S. Department of Housing and Urban Development to set up a microgrant program for businesses said to be left out of the nation’s stratospheric stimulus efforts. In an eleventh-hour compromise, the administration committed to reshuffling $200,000 in annual HUD housing allocations to pay for housing, rent and utility assistance — a concession made after days of downplaying the severity of what housing advocates say is an unprecedented housing crisis.
The episode previews potentially tragic choices to come as local and state governments dig their way out of a worsening economic fallout from the coronavirus: Governments have more problems than they can fix.
“We’re in a serious crisis, regardless of whatever decision is made today. We have a housing crisis, and we have a business crisis,” Kim Boudreaux, director of Catholic Charities of Acadiana, the largest shelter operator in the region, told the councils Tuesday night. “We want the community to have successful businesses. Our nonprofit community depends on a successful economy.”
Touted as a way to shore up the city’s economy, Guillory’s proposal won support from regional business leaders and all of the councils’ Republicans, who argued vigorously for the downstream effects of the program, even as the number of businesses that would qualify for the program remains unclear. Only two council members voted against the final proposal: City Councilman Glenn Lazard and Parish Councilman AB Rubin, both Democrats. Pat Lewis, the city council chairman and the other representative of a minority district, supported the proposal.
“We don’t know the extent today of the damage, and we don’t know the extent [of additional support] that might come down from the federal government,” LEDA CEO Gregg Gothreaux said. LEDA will administer the program on LCG’s behalf and has brokered a fund at the Community Foundation of Acadiana to accept donations from the wider community. “The only people that will come out of this are people who will work their way out as a business person.”
Artist Robert Dafford, Latin community organizer Fernando Perez and several small business owners, in some cases minority business owners, spoke in defense of their livelihoods, underscoring the essential argument made by the administration and its supporters: that the best way to prevent people from losing their housing, particularly people on the margins, is to get small businesses up and running.
“You’re going to do the right thing for the right people,” Perez told the council as the proposal appeared on its way toward a green light, commending them for “teaching people to fish.”
Most of the registered public comments opposed the administration’s plan, but relatively few people outwardly spoke in favor of delivering the money to housing.
Speaking for the lives of the people in their care, housing advocates warned that a looming housing crisis will overwhelm nonprofit resources. They pointed to the hundreds of people, including 111 children, in emergency hotel housing — some previously living in cars — 58% growth in the number of people experiencing homelessness and more than 5,000 people pending utility disconnections from LUS. (LUS is working on a payment plan system that advocates contend may not be sufficient.)
“I’m faced every day with people who don’t have a roof over their head, and I take in people in our shelter, no matter what,” Catholic Charities’ Boudreax said to council members. “Because I don’t want people to die on the street. I don’t want one more phone call from Keith [Talamo] at the coroner’s office asking me to claim somebody. I’ve buried over 400 people in Downtown Lafayette. I don’t want to bury anybody else that died Downtown on the streets.”
Beyond the urgency of need, the advocates argued the pot of money used to fund the small business program is essentially designed by HUD as a stopgap for housing instability. HUD waived the 15% cap that normally limits how much can be spent on direct assistance like rent, utilities or even meal programs and expedited the public comment process to get money flowing. A side effect of that crunched comment period was a local decision hastily made with unclear consequences, a circumstance that mirrors the federal government’s own efforts to stimulate the national economy.
For the most part — with the notable exception of Guillory himself — there was wide agreement that the resources available to address the housing crisis are far outstripped by the resources needed. Similar concordance was found in assessing the needs of small businesses. For some of those who voted for the administration’s plan, the insurmountability of the housing situation was cause not to throw good money after what they see as a hopeless situation. Yet, they viewed staggering unemployment — tens of thousands of people and counting — as justification for cashing all of the relief dollars on small business loans, despite that problem’s scale.
“We have $852,000. We could use $8 million and still not make the impact on the needs of this community,” said Parish Councilman John Guilbeau in remarks ahead of casting a vote in favor.
The math is a little fuzzy. Restrictions from HUD and LCG’s own stipulations will limit the applicant pool to small business owners with low-to-moderate income and could not access federal assistance through loans from the Payroll Protection Program and the Small Business Administration. Both programs have been widely plagued with delays and a lack of communication. Other programs are available, including state-run loans for small businesses and expanded unemployment, but a lot of people have not been able to get timely help. Many others have simply not applied, according to Heidi Melancon, who directs UL Lafayette’s Small Business Development Center and has helped hundreds of businesses owners navigate the federal government’s clunky efforts to provide relief.
Guillory and his administration have consistently argued that there is sufficient funding to tackle the housing crisis, an assertion advocates flatly reject. The CARES Act made available $852,000 directly to Lafayette in Community Development Block Grant COVID-19 dollars, along with another $713,000 in Emergency Solutions Grant funding that covers the entire eight-parish region.
Leigh Rachal, executive director of the Acadiana Regional Coalition on Housing and Homelessness, says the ESG funding is rigid and nevertheless comes up short on the need. ARCH opted to use that money for housing assistance, but the strings attached require case management for families to receive the funding, which could be a bad fit for households that may find themselves evicted for the first time ever.
Attempts to break off some portion of the award to try to tackle the housing crisis failed to win enough support among the councils but drew a modest concession from the administration, which committed to siphoning at least $200,000 from other housing programs to fund housing assistance. Guillory said the estimated $200,000 was conservative and insinuated much more could be peeled off. While it was offered as something of a last-minute compromise to a counter proposal for a 20% allocation of HUD coronavirus funds to housing by councilwomen Liz Hebert and Nanette Cook, it’s not clear where that money is coming from or to what extent all of the dollars can legally be used to directly help people on the financial margins pay their rent, mortgages or utilities.
Hollis Conway, LCG’s community development director, says the administration is looking at annual funds provided through the HUD’s HOME program — funds LCG normally taps for housing rehab — and the annual CDBG allocations. He suggested Tuesday night that money might come from Habitat for Humanity projects working through the administrative process but not yet approved by the council. The statement drew surprise from local Habitat Director Melinda Taylor, who voiced opposition to the small business fund proposal.
“We are contacting the groups that will be affected by our decisions to see how these choices will affect their projects. We are also trying to determine which ones we could simply delay as opposed to canceling,” Conway said in an email to The Current Wednesday. “We do not want to get away from our consolidated and annual plans. I’m still confident that I can find at least $200,000 between the two of them but haven’t found the right puzzle pieces yet. We are being very strategic in which projects we choose so as to not fundamentally change what we are charged to do.”
In considering the administration’s offer, Cook worried whether the move would “rob Peter to pay Paul,” but nevertheless pulled her amendment despite the apparent reshuffling of existing housing dollars. (Cook could not be reached for further comment before press.)
“That’s exactly what happened,” Hebert said in an interview of the trade-off, chalking the dilemma up to the overall sorry condition of the city’s budget. She voiced some mixed regret about other recent expenditures on what she acknowledges are “worthy projects,” like the city’s approval last month of a $1.5 million long-term loan to redevelop the dilapidated LessPay Motel.
Lafayette is not alone in its dilemma, but it has struck out on a different path than other cities in the state. Most have used the HUD funding in the way advocates say it was intended, prioritizing housing, but they have also made room to fund small business programs. In redirecting some existing housing dollars to what advocates like ARCH’s Rachal believe is the more urgent front, Lafayette’s policy makers have taken a first step, but it’s a modest one.
“It’s not a kind of victory. Those are housing funds already,” she says. “They would have been for some sort of housing purpose. Arguably some developments could wait, and we could deal with the emergent crisis. It’s sort of like saying we’ll pay our past due bill, instead of paying the current bill.”
Pleading their case at Tuesday’s meeting, business owners nonetheless were thankful for the relief on the horizon.
“We are struggling,” spa owner Desiree Roberts said through a mask, painting a bleak picture for her coworkers, whom she said were struggling to make rent and in some cases couldn’t access unemployment benefits. “We are trying anything and everything we can do to get some sort of lifeline to be there whenever we are allowed to open. Anything you guys can offer us, any help that we can get would be greatly appreciated.”