Why national politics matters to cities
Does it matter to people who are trying to redevelop city neighborhoods which party is in charge of the White House and Congress?
Well… here’s something to consider. It’s a graph of Federal Community Development Block Grant money received by Ohio’s big three cities each year since 2001, in 2000 constant dollars (using the GDP deflator):
The percentage reductions from Fiscal Year 2002 (when the Bush Administration’s budgeting actually took effect) to Fiscal Year 2006 are: Cleveland, -29%; Cincinnati, -30%; Columbus, -35%.
Total dollars lost to the cities’ community development and social service resources from 2003 through 2006 because of these CDBG reductions (again, measured in inflation-adjusted 2000 dollars) add up to: Cleveland, $20 million; Cincinnati, $13 million; Columbus, $7 million.
Note that the overall Federal budget, measured in 2000 dollars, increased over 10% during this same four-year period.
In Cleveland, CDBG money is what funds housing code enforcement, the basic operating budgets of numerous neighborhood development and social service organizations, commercial strip investments like Storefront Renovation, and lots of other neighborhood development projects. Of course a one-third real-dollar cut in funding means less of all these things. Here’s one dramatic example.
The CDBG program was invented by President Nixon, and one of its staunchest supporters in the Congress is George Voinovich. But this doesn’t change the fact that the Bush Administration and GOP congressional leaders are determined to shrink or kill it. Or the fact that they’ve been pretty successful to date. Or the fact that their efforts have significantly reduced the ability of Cleveland and other poor, big cities to pursue the kind of inner-city neighborhood development that all politicians, of every party, claim to love.
August 29th, 2006 at 3:48 pm
The problem with CBDG is the problem that happens with almost every government program. People have become reliant on it as a regular revenue stream to fund long-term social programs.
When the Nixon administration first conceived of it, the CDBG program was meant as a way to provide a spark that would empower projects and programs at the local level - especially as they relate to physical development. This spark was supposed to jumpstart projects that ultimately were to become locally self-sufficient.
Unfortunately what has occurred is that the money is now being relied on to prop up ongoing social programming and is controlled by the local governments as part of a social service spoils system. Local non-profits consistently budget these grants as part of their expected annual revenues. In the city of Cleveland, councilpeople actually speak of the CBDG funds as part of their community chest that they reward to their pet projects and organizations.
It’s too bad, but this program has now outlived its originally conceived usefulness.
August 29th, 2006 at 5:21 pm
Wendell, are you still on the board of Ohio City Near West? Do you think it’s time for the City to cut off CDBG support for OCNW? Do you have a proposal for “local self-sufficiency” there? Have you shared it with other OCNW members?
August 29th, 2006 at 6:41 pm
OK Bill here goes my attempt at a short explanation-
I resigned from the OCNW Board a few years ago when I chose to interview for the Executive Director’s job vacated by John Wilbur when he left to join the Community Development Department under Mayor Campbell with the city (in hindsight I’m glad I didn’t get the job, but that’s for another conversation).
At the time of my departure, I counseled the board to consider making self-sufficiency the goal as part of the organization’s next strategic plan.
My reasons at the time were two-fold: (1) the over-reliance by OCNW (and most other CDCs) on projects where financially gapped proformas could be subsidized by grant-based income streams as long as the projects were of a certain type (typically low income housing) created temporary comfort for the organization in the form of positive cashflow, but resulted in a negative long-term impact for the neighborhood in the form social burdens and an artificial ceiling on local property values; and (2)as someone who has spent a little time dealing with government bureaucracy and knowing that the handwriting was on the wall for the future of CBDG funds (as well as many other governmental streams) I thought it was prudent to begin preparing as soon as possible. While I haven’t looked at OCNW’s financials in a while, I think my reasons still have validity.
That having been said, you also asked for a proposal and without going into too much detail here, I suggested then and would still support something akin to what’s happening downtown now with the business improvement district as it relates to creating a business friendly (and in the case of Ohio City - neighborhood friendly) environment. This creates an atmosphere (paid for by the businesses and not the taxpayers) that fosters desire for market-rate projects that can qualify for commercial quality financing.
That’s a VERY simplistic explanantion, but it relies on my belief in the free market and not public subsidy. Does it mean changing the way the CDCs operate? Absolutely… and it’s probably one of the reasons why I didn’t get the job.
August 31st, 2006 at 9:54 am
[...] I always enjoy Bill Callahan’s cerebral approach to issues. He’s way smarter than me and we had a little back and forth about CDBG’s and the reduction in funding.  Bill’s position (which the PD apparently found so compelling that they decided to mirror his take on the issue by “writing” a story of their own) is that the decisions made at the Federal level have a significant impact at the local level (especially as it relates to which party is in power and making those decisions). What’s even more fascinating about Bill’s post is the prescience of timing involved (he posted the piece PRIOR to the release of the latest poverty statistics) and how the PD framed their piece using the recent poverty statistics as a backdrop. You can find his post and my comments here. [...]
August 31st, 2006 at 12:13 pm
Bill, it would appear by the numbers that you’ve provided that it indeed does matter what political party has control of the White House and Congress.
As to Wendell’s comment about how CDBG has overtime turned into a “social service spoils system” – Only 12.5% or $3 million of the $25 million in funding the City of Cleveland gets currently, can be utilized for the “social service†component, the rest has to go into “bricks and mortar†projects. Skimpy spoils to deal with our deep social and poverty problems.
This string of comments makes me reflect on what was (is) debated in Peace Corps often — “shouldn’t we be able to work ourselves out of a job?â€. In CDC’s cases it is often, “shouldn’t we should be able to diversify our funding so we don’t have to rely on CDBG fundsâ€. CDC’s can no better eliminate our urban woes than Peace Corps can turn around the complex woes of developing countries. And, I don’t think CDCs can wean themselves off CDBG without becoming quasi chambers of commerce or for-profit developers, or skeleton staffed professional development organizations that will not have enough specialty skills and experience to truly make a difference.
Because it is doubtful CDC can not successfully sustain themselves without CDBG funding, does that me we should get rid them? I don’t think so. Do they have an impact on improving the quality of life in our neighborhoods? They can. Should we periodically study their effectiveness and ways we can improve their bang for the CDBG buck? Certainly. As Wendell points out, we should also be looking at creative ways to incentivize investment and direct revenues from the private sector as in the case of the Business Investment District downtown and Tax Incremental Financing at Steel Yard Commons that will benefit adjacent areas.
I’m not sure that I’d want to see a scenario in which CDCs were actually able to free themselves from their CDBG origins and funding. They were born out of an era of realization that urban communities had distinct problems and concerned citizens in those communities asked and received support in tackling them.
As Wendell points to concern of bricks and mortar projects being focused on things such as low-income housing (I prefer the term affordable housing, and we do need more), just as important, is a concern that development may not be grounded by prudent planning and a shared vision by the community, but by other forces that can gain momentum due to these funding sources. One glaring example is the over emphasis on new construction over the past 10 years as opposed to effective and diverse models for rehabbing our aging housing stock and tackling the ever growing problem with abandon, vacant and foreclosed properties.
I’ll take this opportunity to point out that in the communities of Brooklyn Centre and Old Brooklyn, Councilman Kevin Kelley and I are working closely with community leaders to leverage efficiencies in our CDBG allocations. We’ve supported a consolidation of two development corporations into one that will serve both communities that make up the majority of Ward 15 and 16 (I’ll send Bill our February press release under separate cover). My office is also supporting as best we can, the strengthening and organizing of street, block, civic, environmental and business association groups that are our best hope for sustainable development that by definition has to be locally driven to ensure success. Our little consolidation story has not been picked-up by the mainstream media yet, but we believe that this type of incremental change in how we use these funds is vital if we want to continue to make gains with less and less funding.
Party politics and ward boundaries aside, we need to keep pushing forward and keep our hope alive. What we love about our city is often elusive to explain, but the diversity, mélange and synergy of ideas and spirit will surely propel us as it always has since the advent of the metropolis.
Brian Cummins
Ward 15 City Council Representative
(Brooklyn Centre and Old Brooklyn)
REF:
http://www.city.cleveland.oh.us/government/departments/commdev/cdblockgrantprog.html
http://www.hud.gov/offices/cpd/communitydevelopment/rulesandregs/
August 31st, 2006 at 5:18 pm
Please stop looking to government (at any level) to solve life’s problems. If parents (2 that is - any sex) raise their kids instead of relying on others (institutions, not neighbors helping) 95% of what you complain about will be corrected in one generation. Much shorter than the “War on Poverty” or “Great Society” programs which were supposed to solve all of society’s ills.
September 1st, 2006 at 10:14 am
A couple of things about Brian’s well-informed comments…
I understand that “only 12.5%…can be utilized for the “social service†component”, but he also helps to confirm my concerns about the funding being used for projects that in essence create more social service needs.
Calling it “affordable” instead of “low income” housing is a semantical trick (one person’s idea of affordable is different than another’s, but we can all agree on what low income is). Living in Ohio City has given me a new appreciation for this debate as we have a significant amount of low income (or affordable if you prefer) housing in our neighborhood and a desire on the part of some (like CMHA) to add more.
Finally, I agree with Brian’s point about the use of existing housing stock to fill low income housing needs instead of new construction and I would love to see him spearhead legislation that dictates this.
September 7th, 2006 at 10:54 am
councilman cummings,
i have a question for ya. do you think that the staffs of the community development corporations should be mandated to live inside the city like city employees? They are, after all, by their very title the persons who are responsible for the development of the community. Since it is they who are responsible for the development of the community, should they not have to live in the community that they themselves developed? As you know, many of these “developers of the community” escape to their suburban homes that someone else developed at five o’clock everyday. Meanwhile the city employees are subjected to having to live a miserable existence in the substandard conditions that the “developers” refuse to live in themselves. I won’t hold my breath while waiting for an answer.
October 1st, 2006 at 10:08 pm
I view most of the CDCs as mere middlemen. For example, many CDCs coordinate low-interest loan programs to assist private homeowners. CDBGs funds are used to
buy down the rates. The City should be able to arrange these low-interest loans directly with the bank. Homeowners should go to the bank directly. Currently, such CDCs are merely facilitators.
Block clubs can function independently — without guidance from CDC staff organizers.
There are indeed stars of the CDC field: Old Brooklyn CDC, Famicos, Detroit Shoreway, Tremont, to name a few. But many others are just sucking up CDBG funds. We don’t need 50 CDCs!!