When Berkeley’s only foster care and adoption agency learned that its office was seismically unsafe, it faced an uncomfortable choice: find money for repairs by May 2006 or face city fines.
Now, if the City Council approves, A Better Way will receive the final $99,000 it needs for the $185,000 project through the federal Community Development Block Grant (CDBG) Program.
“We didn’t have any other funding source,” said Shahnaz Mazandarani, executive director of A Better Way, which owns its Adeline Street office. “Our grants are for the services we provide so when something happens to the building, God only knows where we get the money.”
Next year the money might be harder to find for Berkeley nonprofits.
In his 2005-06 budget, President George Bush proposed eliminating the $4.7 billion CDBG program altogether. If Congress agrees, Berkeley would lose approximately $4.2 million a year in federal dollars.
“The funding is extremely important for us,” said city Housing Director Steve Barton.
Established in 1974, CDBG is the leading federal program to fund public works projects in low income neighborhoods in eligible cities and counties. In Berkeley, however, most of the funds go to nonprofits, mainly for housing rehabilitation programs and job placement services. Twelve of the 27 programs in Berkeley recommended for funding next year are housing related.
Under the president’s plan, funding for CDBG and 17 other programs would be cut in half and transferred from the Department of Housing and Urban Development to the Commerce Department to support economic development programs.
Barton said the plan would disqualify many of the programs Berkeley chooses to fund with CDBG money. However, he remains optimistic that the Republican-controlled Congress will vote against the president on CDBG.
Last year, the Bush administration proposed a $1.6 billion cut to the federal Section 8 housing program, only to see Congress restore funding. It didn’t propose cuts to Section 8 this year.
But even if Congress keeps CDBG intact and fully funded, Berkeley funding could still be drastically cut under four new funding formulas HUD has submitted to Congress.
The current funding formula, in place since 1978, has a bias favoring both cities with an older housing stock and university towns, said HUD spokesperson Brian Sullivan. Under the current system, most college students, even those supported by their families, count as low-income residents, making university towns appear far poorer than other evidence would suggest.
A recent HUD report showed that College Station, Penn., home to Penn State University, had a poverty rate of 48 percent, due mostly to its large student population. Berkeley receives more than twice as much CDBG money as Richmond, a city with an equivalent population, but far greater poverty.
“We determined that the program was not effectively targeting need, so we have offered Congress four alternatives to correct some of the inequities,” Sullivan said. Congress will consider the proposals along with the future of CDBG before approving a budget by the end of June.
To close the university loophole, HUD has proposed counting only low-income “persons living in family households or elderly-headed households living in poverty.”
That leaves out poor single people, who comprise most of Berkeley’s homeless population.
“HUD is using too broad a brush,” Barton said. Of the four alternatives floated by HUD, Barton estimated that three would cut city CDBG funding in half and the other would cut it by 38 percent.
Congress could choose to keep the current funding formula, and Rep. Barbara Lee (D-Oakland) worries about any changes.
“I'm concerned that changes in the funding formula would jeopardize the ability of countless communities to create jobs and affordable housing opportunities for those who need it most,” she said.
Berkeley nonprofits dependent CDBG funds are bracing for the worst.
“We’re going to have pull some other funding together,” said Gerald Baptiste, assistant director of the Center For Independent Living. The organization has received annual CDBG grants of $142,675—its only source of funding for that program—to build ramps and chairlifts at the homes of disabled residents.
“Without that money a number of people would have to go into institutions without a doubt,” he said.
Last year, the city spent $4.2 million in CDBG money on six anti-poverty organizations, eight affordable housing providers, 19 service providers to the homeless, seven agencies committed to further fair and accessible housing, 32 social service agencies and eight child care providers.
The greatest single recipient of CDBG funding is the city of Berkeley itself. Approximately $850,000—roughly 20 percent of the federal funds—pays for city staff. Berkeley’s staff allocation is a higher percentage than Oakland’s, which uses 15 percent of its $9 million CDBG allocation on staff, said CDBG Administrator Danny Wong.
If CDBG is cut or eliminated, Barton said one of the immediate consequences would be a contraction of Berkeley’s housing department.