CARES Act

Category: News + Notes

Feds grant another $1.4 million to Lafayette for emergency housing assistance

The gist: Identified as a place at “higher risk” for evictions, Lafayette will receive a second and larger round of federal stimulus dollars intended for housing aid during the pandemic. At just under $1.4 million, the block grant from the U.S. Department of Housing and Urban Development nearly doubles the last allocation Lafayette received, one the Guillory administration used to stand up a small business grant program.

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Housing advocates say the money adds flexibility but likely falls short of the overall need. Hundreds of Acadiana households remain in hotels with FEMA footing the bill, although that program is no longer taking on new clients. Sustained unemployment threatens to add more need to a largely under-resourced network of nonprofits, which is coordinating responses not only to the pandemic but also recovery efforts after Hurricane Laura. Acadiana Regional Coalition on Homelessness and Housing now has case managers helping those in the hotel program moving into stable housing. ARCH Executive Director Leigh Rachal says the latest round of funding could help that process move more quickly or go toward a longer-term solution. Acadiana’s shelter system is tapped out and stretched to its limits by the pandemic. 

“It’s sort of like a community operating without an emergency room,” Rachal says of the lack of shelter space. “If you have a medical crisis, you need an emergency room. These funds, because they’re so very flexible, provide some opportunity for the community to really think through what we need to do more holistically.” 

Hollis Conway, director of Lafayette’s Community Development Department, says his office is working on a community needs assessment to sort out the best use of the money.

HUD’s messaging on the allocation focuses on housing. In a press release announcing the nearly $2 billion allocation, HUD said it is exhausting what remains of the $5 billion set aside for community development block grants through the CARES to help “places with households facing higher risk of eviction.”

“These funds can help households struggling to meet their rental or mortgage obligations to stay afloat as our nation continues to recover from the coronavirus pandemic,” U.S. Housing Secretary Ben Carson said in the HUD release.

Communities used funds from earlier rounds to tackle a variety of emerging needs, including housing, business support or to buy equipment like personal protective gear and testing supplies. Lafayette used all of its first grant — $852,000 — on a small business program that has struggled to move cash quickly and widely as promised. LCG has since shuffled around $560,000 in regular federal housing dollars and will chip $100,000 out of the small business recovery program to meet housing assistance needs. 

Louisiana will receive $27 million in this round of block grants. HUD’s release says states received priority for funding based on their level of unemployment and the current severity of their coronavirus outbreaks. Louisiana experienced one of the worst coronavirus rebounds, which has abated in recent weeks. 

Hundreds of thousands in Louisiana remain out of work or underemployed. Around 232,000 Louisiana workers filed continued jobless claims for the week ending Sept. 9. Just over 10,000 people in Lafayette Parish filed continued claims that same week. In May, the state peaked at 321,000 claims. Acadiana’s shelters remain tapped out. This week, the $300 boost to unemployment checks tacked on by the federal government will end, reducing the maximum weekly benefit to $247, among the lowest in the nation. Economists project Louisiana will not have recovered all jobs lost by 2021.

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Category: News + Notes

Touted as help for hundreds, Lafayette’s business relief program has approved help for only a handful so far

The gist: Hatched as a plan to quickly inject cash to local businesses in need, the Lafayette Business Recovery Plan approved its first eight grant awards last week. The program is off to a slow start as the collaboration between LEDA and LCG wrangles with how to manage the onerous regulations that tether most of the $1 million grant pool sourced from federal housing money. The glacial pace means the program could fall well short of its ambitions, while housing needs, another use of the funding, continue to worsen.  

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Eight applicants have been approved so far for grants pulled from two different funding sources. That’s out of 944 applications received to date, according to numbers provided by LEDA. Many applicants dropped off when faced with large reporting and documentation requirements that come along with grant awards from the U.S. Department of Housing and Urban Development. Trouble with thorny regulations and pace jibe with early critiques voiced by housing advocates who opposed using the HUD dollars for grants to local businesses hurt by coronavirus. Awardees have not yet been notified, so LCG and LEDA would not identify them. 

Only four applications totalling $26,000 were approved for HUD funding so far. The total pool from HUD is $852,000 in block grant funds aimed directly at the pandemic. LCG’s Community Development Department, understaffed and inexperienced with directly overseeing HUD business grants, has struggled to move applicants through. Staffers and Director Hollis Conway tell The Current most applications are lingering incomplete. A key problem is the HUD funds are reimbursements, not upfront awards, and they must cover historical expenses. That means many who answered the open call have asked for help on expenses HUD won’t cover, including the artists and low-income business owners the program was touted to help. 

LCG formally contracted the HUD grant in July after some delays. Programs in other cities have been similarly delayed, waiting for HUD approval. Applications opened June 22, behind the original start date of June 1, but the money wasn’t technically available until the contract award was signed in July. The approval committee, which includes several prominent business and community leaders and council members, met Tuesday to approve the eight applications, which now await signoff from LCG’s lawyers. 

Four of the applicants will receive money from LEDA. The total $1 million pool set up for the Lafayette Business Recovery Program includes $200,000 put up by the parish economic development agency. Those funds are not governed by the same restrictions that come along with the bulk of the award funds from HUD. And LEDA CEO Gregg Gothreaux says his organization will now move ahead of LCG’s meticulous pace to get more funds out the door. 

“We will distribute all of LEDA’s funds for the Business Recovery Program in the next couple of weeks to businesses that are desperately in need of a lifeline,” Gothreaux says. “Then help LCG distribute its share with any info they need to work toward a successful distribution of their funds.” 

LCG hopes to put a few more applicants before the approval committee in coming weeks. Around 100 made it through the first few steps, getting close enough for real consideration. Twenty-three were rejected outright, leaving 70 in the active pool, according to data provided by LCG. But even the eligibility of the handful most likely to be in front of that approval committee, projected to be eight or nine at this point, is unclear.

One of those applicants is a woman who received an SBA disaster loan and still hasn’t exhausted it, meaning accepting money from the HUD portion of the Business Recovery Program could be a duplication of benefits and require her to pay HUD money back, Community Development Planner Belle LeBlanc says. (LCG is ultimately on the hook for funds spent out of HUD’s designated scope.) Some small enterprises simply don’t have the kind of operational expenses the program is designed to cover. 

“They don’t have operational expenses; there’s nothing for us to assist [them with],” LeBlanc says. 

Staff members hesitate to say they won’t be able to spend all the money. They describe a “fluid” situation with most applicants, working over the phone or by email and combing through reams of required documents like bank statements, lease agreements and receipts for covered expenses. Applicants are given a soft, five-day deadline to turn around completed applications, and the staff tries to work with them, often finding some likely to qualify ultimately don’t. One applicant, Conway says, was hospitalized with coronavirus and went silent. 

“We don’t want to predetermine [that we won’t be able to spend the money] and miss people. My very limited staff is having to go above and beyond to make that happen,” Conway adds. “We’re going 110%.” The application portal is still open. Applicants are also directed to the state’s business recovery program. Authorized with $275 million in funds awarded to Louisiana in the CARES Act, the state program overlaps with the local scope but has fewer hoops for small businesses to jump through.

Housing advocates criticized this very problem in how LCG planned to use the HUD funds. They argued in May that HUD regulations would severely limit the number of businesses that could ultimately be helped by the full $850,000 grant and lobbied for LCG to put the money toward rent and utility assistance. To expedite funding, HUD waived many of the typical requirements for housing programs, clearing an easier path for that use. Documents submitted to HUD to approve the program estimated between 250 and 350 businesses would be helped. Rhetoric from the mayor-president and program supporters made the case that the program could help hundreds of businesses and in turn hundreds more workers. Of the four businesses approved for HUD funding, 1.65 jobs — a HUD calculation based on full-time equivalent salary of $35,000 — have been retained. 

Funding for emergency shelters appears to be running out. Louisiana Housing Corporation has asked housing agencies not to take on any more households in temporary shelter housing. In Acadiana, 341 households, including some with children, have been put up in a network of hotels. Acadiana has the largest population of families in emergency housing in the state. Louisiana is still sorting out the details of accepting extended and expanded unemployment benefits from the federal government, following a murky executive order from President Donald Trump. Temporary federal bans on evictions expired at the end of July. Trump has directed federal authorities to pursue extending the evictions without Congressional authorization, but, in practice, evictions have resumed. 

There is regulatory urgency to move the HUD funds. HUD holds back funding allocations to ensure its program recipients are spending the money received. Community Development staff say HUD is unlikely to take the money away, but the funds do need to be moved before the end of the year. 

Community Development is looking at other “options.” Making note of the dire housing need, Conway offered that one option is to redirect the funds to that purpose, in which case the money would be awarded in a chunk to an agency partner like Catholic Charities of Acadiana, which received $200,000 in assistance funds last month. He did not specify other options and could not commit to using unspent funds on housing. 

“Those are conversations I would have with my boss,” Conway said, noting the need to move the money quickly both for the sake of emergency and to meet HUD requirements. “We would want to be part of the solution. I think there’s a way we can do that.” 

The administration did not respond to a request for comment before press.

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Category: News + Notes

Renters are projected to need a lot more help than Louisiana is giving them

The gist: Offered as relief, the governor’s emergency rent assistance program has met little celebration from housing advocates, who are wary that the $24 million set aside is a pittance compared with the volume of estimated need. Housing advocates say avoiding a wave of housing instability in Louisiana, one of the poorest states in the country, will cost at least 10 times what the state has cobbled together. 

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Up front, the Louisiana Emergency Rental Assistance program will launch with $7 million and grow to collect $24 million in federal housing funds. The program will be centralized and managed by the Louisiana Housing Corporation. An income cap of $25,450 limits the program to the very poor. Louisiana’s median income is around $48,000.

A report circulated by housing advocates estimates Louisiana renters need $250 million through the end of the year. Metro Lafayette alone, according to that same calculation, would need more than twice what’s been offered by the program, and little money has been offered up locally. On Tuesday, the City Council will vote to authorize $200,000 in local rent and utility relief. 

“It’s like trying to soak up an oil spill with a paper towel,” says Leigh Rachal, executive director of the Acadiana Regional Coalition on Housing and Homelessness, of the resources thrown at housing so far. Her comments echo official statements from statewide organizations like HousingLouisiana, which issued a press release applauding the thought behind the program but questioning the effort. A $15 million program in Houston ran out of money in two hours. 

Critics further point out the billions in federal assistance handed out to small businesses in Louisiana alone. Around $8 billion flowed into Louisiana’s small businesses via the CARES Act, the multi-trillion dollar stimulus stood up in a scramble by Congress to prop up the American economy as joblessness soared. Businesses in Lafayette Parish collected $600 million in forgivable federal loans valued at $150,000 or more through that program. The Louisiana Legislature authorized another $300 million for its own Main Street Recovery Act. And Lafayette Consolidated Government opened a $1 million small business grant program with funding from the U.S. Department of Housing and Urban Development. 

Housing advocates continue to warn of a coming wave of evictions. Legal proceedings on evictions in Louisiana resumed in June, the first shoe to drop. But the looming July 25 end of a federal moratorium on evictions has advocates in suspense. Expanded unemployment benefits will end July 31, days after the eviction protections are lifted for many of Louisiana’s 600,000 renter households. And, to be sure, many mortgage holders could be in trouble too as incomes decline and mortgage relief dries up. 

“We’ve been talking about it for a long time because we knew that if we could find a solution” it would take a while to make it work, Rachal says. Rent programs based on federal dollars are notoriously slow, suggesting that even as applicants flock to the rent program’s website or blow up 211 for help, the money won’t come quickly for them, both gumming up the flow of relief and — in the worst cases — arriving too little, too late. 

Evictions have been abnormally low in Lafayette. The City Court docket has held steady at 30 filings per week since the eviction stay was lifted in June. Pre-Covid levels averaged around 60 evictions per week, according to City Court Chief Judge Doug Saloom. “I hold out the hope that those numbers don’t escalate,” Saloom says. 

It feels like a calm before the storm. The dire predictions from housing advocates are premised on sustained, high levels of unemployment. While ticking down, unemployment figures have remained stubbornly high, suggesting the astronomical costs of need worrying housing advocates aren’t so far fetched. Even at half the value projected, the scale would be historic. Louisiana has 312,000 continued unemployment claims, posting a small decline last week. The Acadiana region bucked the trend, bumping slightly up to just more than 36,000 claims. 

The early signs are there. More than 320 households, including many with children, are in hotel rooms secured as emergency housing by ARCH, Rachal says, and the number is rising. Beyond people showing up for help, advocates can’t see beyond the horizon to what’s coming. It’s unclear exactly how many people live in housing currently protected by the federal eviction moratorium, which covers any domicile that receives federal dollars — by voucher, mortgage backing or tax credit. Whatever that figure, it’s likely to dwarf the number that were covered by the state’s moratorium only. 

“I have a lot of concern that people might think that’s solved now,” Rachal says of the message the rental program sends. “And it’s not.”

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Category: Business + Innovation, News + Notes

Survey highlights initial impact of COVID-19 on Acadiana businesses

The gist: Acadiana’s businesses already feel widespread economic pain, according to a survey conducted by a coalition of local economic development and community organizations, including LEDA, One Acadiana and more. Of roughly 1,000 local businesses surveyed between March 19 and March 25, 91% expected revenue to decline. 

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91% of respondents expect revenue to be down. 72% of all respondents say they expect revenue to be down significantly.

The majority of respondents have already seen their businesses hurt, with order cancellations and decreased demand. As a result, a majority of respondents are watching spending closely and adjusting work schedules.

35% have already reduced staff or expect to. Another 32.7% are unsure if they’ll need to do that. An average of 64% have already reduced operational hours, shifts, work days, and/or wages, with that number increasing to 88% for those businesses who responded on the last day the survey was live.

More than 20% said they couldn’t make it a month given current economic conditions. Some couldn’t make it another week. Nearly half of businesses were unsure how long they could hold out. Here’s a breakdown based on how much longer they felt they could stay open given current conditions:

  • 7% one week
  • 22.2% one month
  • 8.8% six months
  • 2.3% other
  • 45.1% unsure how long
  • 14.5% other 

Respondents encompassed a variety of types, industries, and sizes of businesses, with more than half having 1-10 employees, more than 70% being located in Lafayette Parish.

The federal stimulus could help local businesses navigate these choppy waters. This survey was conducted before the federal stimulus package was passed, part of which is designed to keep small businesses afloat for a couple of months. Some of the responses to this survey referenced their hope this would keep them alive. The forgivable loans available to small businesses to retain staff are starting to take applications today. 

This coalition plans on conducting another survey in mid-April to track the ongoing impact of COVID-19. Full results of this first survey can be seen here.

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Link: Banks urge patience as PPP rollout gets off to a rocky start

The ambitious $350 billion Paycheck Protection Program passed by Congress one week ago to help small businesses weather the coronavirus crisis rolls out this morning amid confusion and mixed signals.

Updated federal guidelines for the program were not issued until late Thursday night in a 31-page “interim final rules” document, just hours before the PPP was supposed to begin accepting applications, and most banks are still not ready.

Source: Banks urge patience as PPP rollout gets off to a rocky start

Category: News + Notes
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Hang tight, Lafayette, the money is coming

The gist: Last week, Congress hurried through an unprecedented $2 trillion stimulus to prop up the U.S. economy, unlocking billions in cash to patch the nation’s businesses and workers through weeks more of the social distancing guidelines freezing commerce. Everyone expected dollars would start flowing at the stroke of a pen, but the size and scope of the bill means there’s more to iron out, even as the federal government works to turn on the taps this week.

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Yes, the CARES Act is now law, but the rules aren’t really in place yet. The president enacted the stimulus when he signed it last Friday. But, for all of the bill’s provisions, the federal government still has to issue guidance on how the money flows. Some of this stuff is pretty straightforward, and the basic building blocks — who qualifies for what and for how much — are pretty well established. As disaster packages go, this one is expected to kick in pretty fast. The U.S. Treasury announced today that it expects to have the program up and running by April 3. 

In the meantime, we’ve been in something of an info vacuum. Many local banks, which will be the vanguard of the billions in cash available to small businesses, have been flooded with calls and are telling customers to gather info while they wait for federal guidance. IberiaBank recently sent out a notice to customers, offering a rundown of what it knows and prepping clients to hit the ground running once the rules are ironed out and the cash is available. 

“Information is changing by the minute and although we want to be helpful, we cannot be held responsible for any changes in the information going forward,” IberiaBank wrote to its customers, pointing to the fluidity of the bill’s finer points. In the meantime, IberiaBank suggests businesses gather the following info while queueing up.

  • Payroll tax reports for the previous 12 months 
  • Historical tax returns for three years 
  • Organizational documents 
  • A list of all entities owned by any 20% or more owner of the business 

Business groups have spun up webinars and one-pager resources. Some went up before the bill was even passed and as Capitol Hill continued to bandy the legislation around. Most of the dust has settled, but some key details are still in motion until the rules are formally promulgated and updated on the Federal Register. Beyond that, the longer term impact of the bill on Acadiana’s economy remains unclear. For instance, we’re not exactly sure how the stimulus will perform in propping up the region’s oil and gas industry besieged on two sides by an international price war and flatlined demand. 

“I’d give you $20 to answer that question,” LEDA President and CEO Gregg Gothreaux quipped when asked about that during a taping of the radio program Out to Lunch Louisiana this week. (The episode airs on KRVS Wednesday and Saturday.) Gothreaux commended the bevy of experts and business leaders pounding the pavement to pin down how the stimulus works and what it will do for the local economy. 

Around 35% of Acadiana businesses expect they’ll lay people off, Gothreaux said in the interview, relaying some returns from a regional survey of roughly 1,000 businesses. Figuring out which CARES Act provision works best for those businesses is essential to making the bill work, and the federal guidance is the last piece of the puzzle. Once that’s in place, CPAs and attorneys can point employers in the right direction. 

“Hang tight” is the best advice at this point. Stephen Waguespack of the Louisiana Association of Business and Industry has urged businesses to wait on the CARES Act’s Payroll Protection Program to activate before making any big decisions; that should happen this week, kicking in billions in forgivable loans for small employers. By government standards, this is moving at warp speed. Businesses are hurting now, but making the wrong decision could be costlier.

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