Beverly Hills Trades Community Grants for Cash

CDBG logoThe Community Development Block Grant is federal financial assistance to local governments intended to provide economic opportunity and “decent housing” to low- and moderate-income people. It is a flexible program that allows local jurisdictions discretion to address local needs, and it is one of the few non-categorical federal funding streams for general community development purposes. Evidently it’s not flexible enough: this week City Council explored trading traded $90,000 in Beverly Hills block grants for $60 in unrestricted funds – a at 70 cents-on-the-dollar exchange that could be used to, say, further pimp out Rodeo Drive.

That doesn’t seem in keeping with the spirit of the program. Is it even legal? Evidently it is, according to the staff report received by City Council this week. But assuming it is legal, why trade federal assistance away? Wouldn’t letting that money go at a discount be like letting Transportation Development Act funds rollover year after year, for example, or simply declining to pursue state and federal funds earmarked for safe streets near schools? (Oops – we do both of those things too!)

Beverly Hills has long received CDBG funds. And cities generally like them because they offer flexibility. Once upon a time, most federal assistance came with pesky strings. Cities succeeded in persuading Congress to instead bundle direct assistance as a ‘block grant’ to do mostly what they liked with them. Community development block grants were tethered to (guess what) community development purposes. In the past, Beverly Hills has used CDBGs to help build senior housing and even today we spend our CDBG grants on low-income household maintenance.

Sound counter-intuitive because Beverly Hills is a well-advantaged community? It is overall, but we do have people living under the poverty line (roughly 8% according to the American Community Survey estimate, which increases to about 10% for those over 65). Those figures you won’t find on the city’s demographics page). We also have a substantial number of long-tenured households that are of relatively modest means. (The old-school Beverly Hills – Proposition 13 locks them in because to buy elsewhere in California they’d lose their absurdly low property tax rate.) We also have a dwindling population of older renter households who could not afford to up and move because market rents are high.

Renters are at a relative disadvantage in Beverly Hills. The housing stock remains limited because there’s been relatively few units added over time (thus falling short of demand) and as a result, rents do rise. And the homeownership rate is relatively low in Beverly Hills (44% – a fifth lower than the state average). Families today struggle with very high rents, such as $2,500+ for 2 bedrooms and $5,000 monthly for a detached home lease to be able to access good schools. Working folks in our multifamily areas pony up above $1,500 month for a single.

Clearly there is a need for affordable rental housing in Beverly Hills. So why trade away ninety thousand bucks at a discount to the City of Hawaiian Gardens (of all places) when that federal funding could help house people of modest means or less-mobile seniors? Our policymakers tell us that our workforce cannot afford to live here. Why not use CDBG to help build workforce housing?

In the past, Beverly Hills has used CDBG funds to help build senior housing (indeed the one development is the only subsidized housing of any kind in the city). Today that Crescent Drive North complex is an opportunity for seniors who otherwise could not remain in Beverly Hills. But the waiting list is so long that, no joke, a senior waits five years to gain a spot. Shouldn’t we be looking to create more of that kind of housing too?

Instead of addressing our social obligations, Beverly Hills prefers to outsource the contribution that we do make. Beverly Hills foots the bill for in-lieu housing in other communities to satisfy our housing obligations under the law. (Yes, that’s legal too.) We pay social service nonprofits elsewhere to take the homeless off our hands (even while other cities wrap services like housing around homeless outreach). Our housing record is so problematic that the federal government demands to approve our General Plan’s required housing element.

Why not build this housing ourselves? It’s not for the availability of funds. After all, we’re trading away block grants at 70 cents-on-the-dollar and flushing $5 million every year just to bail out our Parking Authority, which builds and maintains parking structures. (We’ve got you covered if you need to park your car, but we don’t have for you a place to live if you’re of modest means.) We simply don’t invest in housing.

For a contrast, look at Santa Monica and West Hollywood: those cities have embarked on relatively ambitious programs to keep the under-advantaged and seniors in their homes. That’s what planning is all about, right? Enhancing community stability by keeping people in their homes and maintaining the quality of community diversity that would keep us from being, oh, too Beverly Hills.

We’re already losing that diversity in our rental areas. We’ve seen our senior community shrink and anecdotally, the folks moving in to rental housing seem less likely to emotionally invest here. Wouldn’t spending CDBG funds on housing be a good investment in stabilizing our fast-changing city while building our community over the longer term?