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City to review HUD funding for affordable housing

Staff created a five-year, consolidated plan for the increased federal dollars

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Affordable housing, economic development efforts and funding for homelessness prevention are top priorities of a five-year proposal created by city staff for funding from the U.S. Department of Housing and Urban Development.

Springfield receives HUD funding every year, and city staff is required to submit a consolidated plan that outlines its anticipated use of the funding over a five-year period, said Bob Jones, city grants administrator. The plan for 2020-25 is awaiting Springfield City Council approval.

For fiscal 2020, which begins in July, Jones said the city is set to receive almost $2.6 million in HUD money, up about 13% from years prior because of increased allocations Congress made to HUD. Jones said the consolidated plan is made under the assumption that the city will receive the same amount annually for the five years, which would be roughly $13 million through fiscal 2025.

The funding comes in the form of two grants: the Home Investment Partnerships Program and the Community Block Development Grant. Jones said the consolidated plan is drafted to focus all of the roughly $1.05 million in Home program funding to affordable housing efforts.

“Affordable housing took home the prize,” he said, adding an additional $1 million in income from loans issued through the program each year will be slated for the housing efforts.

“HUD doesn’t care whether a city grants the money out or loans it out,” he said. “So, with the Home program funding, we’ve been loaning some of that out.”

Jones said anyone can apply for the affordable housing funding to build or rehabilitate a home, but the applicant must agree to maintain the property and rent the housing unit to low-income individuals.

The city’s down payment assistance program is also supported by HUD funding. The program helps first-time homebuyers cover closing costs and down payments on homes less than $130,000 by providing up to $5,000 with no interest and no repayment required provided the participant remains in the home for 10 years.

Between 2010 and 2018, the city’s homeownership rate fell five percentage points to 44.3%, according to data from the U.S Census Bureau. It’s been felt throughout Greene County as well, as homeownership has steadily dropped by roughly 5% since 2009, according past Springfield Business Journal reporting.

The city’s proposed plan also focuses on $900,000 in annual CBDG funding for economic development efforts.

“We use those to help a business grow and expand or help them buy a building that’s empty and occupy with businesses that then hire people,” Jones said.

The consolidated plan outlines goals to create 40 jobs, assist at least 10 businesses and rehab 10 business storefronts with the funding over the next five years.

Nonprofits
The city is only allowed by HUD to allocate 15% of CBDG grants to public service efforts, which equates to roughly $200,000 in annual funding.

“It doesn’t seem like a lot of money, but when nonprofits can tell prospective donors that they have a city grant with federal funding, it can go a long way for them,” Jones said.

Jones said the city takes CBDG grant applications.

“This year, we have $300,000-$400,000 in applications for the $200,000 we’re going to get,” he said, adding the applications undergo a scoring process. “We’ve ranked the nonprofits and put together the score sheet, but it has to go to City Council for approval.

“If City Council says, ‘Don’t give X nonprofit a dime, give it all to this group,’ they can do that. So, it’s all yet to be determined.”

Janet Dankert, CEO of Community Partnership of the Ozarks Inc., said the nonprofit receives about $100,000 each year in CDBG funding for the One Door program, which acts as a coordinated entry plan for all homeless services in Springfield. CPO also gets under $30,000 for its Continuum of Care program, Ozarks Alliance to End Homelessness. The nonprofit also works with other organizations that are usually HUD recipients, such as The Kitchen, to help the local homeless population.

“It’s really critical to our homeless shelter providers. We couldn’t offer our emergency shelter or the ability to provide affordable housing to folks leaving the system without it,” Dankert said of the HUD funding.

Additionally, the city has access to $190,000 each year for homelessness prevention. The Kitchen, for example, uses the funding each year to pay for utilities and rentals at the shelters and housing units.

The first public hearing for the plan was scheduled for March 23, but the council meeting was canceled due to the coronavirus concerns. The agenda is postponed to the next planned council meeting on April 6.

Councilman Abe McGull said council’s conversations have been “inundated by the coronavirus” and that he’s unsure when council will get to the matter. City spokeswoman Cora Scott said the council is planning to convene through videoconferencing for upcoming council meetings due to an ordinance made March 23 by Mayor Ken McClure for residents to stay at home because of COVID-19. She said the council is required to meet at least once a month.

Because of the delay, Jones said the city may not make the May submission deadline and is appealing to HUD for an extension into July.

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