$5M Covid Aid: Enough? In Time?

Jose Merced watched customers disappear and the rent bills mount at La Isla Barbershop on Washington Avenue in the Hill. Now he’s hoping a pot of federal COVID-19 relief money headed toward New Haven will offer him some belated business-survival relief.

The New Haven’s mayor’s office has proposed an initial plan to divide up $5 million in aid headed to to the city through the federal CARES Act. And officials are promising to spread some of it to struggling small neighborhood-businesses like Merced’s.

Officials unveiled details of that plan Monday night at a hearing of the Board of Alders Joint Health and Human Services Committee. The alders then voted to authorize Mayor Justin Elicker to accept the $5 million in federal aid to help city residents harmed by the COVID-19 pandemic.

The measure now goes before the full Board of Alders for final approval.

The federal grant money will be aimed at helping homeless, low-income, and at-risk individuals.

Some participants in the alder committee’s Monday night public hearing on the measure said they worry that this funding is too little, too late. Small businesses have already begun to close. Self-employed tattoo artists and hair salon owners have struggled for months since the crisis and subsequent economic shutdowns began.

New Haven will receive a total of $5,044,461 in federal funding awarded as part of the CARES Act, which breaks down to about $38 per resident, an amount that alders and activists alike have said is not sufficient to address the city’s needs.

The money will go toward nine projects primarily aimed at helping low and moderate-income individuals directly address COVID-19 related needs.

The four largest recipients are a rapid rehousing and homelessness prevention program, a housing assistance program to help those at risk of eviction or foreclosure, a project to meet the basic needs of vulnerable households, and an economic resiliency project to provide assistance to small businesses hit hard by the economic crisis.

Not Enough?

Some 5,200 New Haveners are currently unemployed in New Haven, according to Department of Labor statistics. By the end of the summer, 5,000 tenants will be in jeopardy of eviction, according to Livable City Initiative Director Serena Neal-Sanjurjo.

The CARES Act, signed by President Trump on March 27 in response to the coronavirus outbreak, has been criticized as insufficient to help state and local governments deal with the economic and social fallout. The Economic Policy Institute, a D.C.-based think tank, said in a March report, ​“The aid is both too stingy and too restrictive.”

An additional challenge: The federal government calculates the amount of emergency funds to be allocated based on a formula that takes into account the total homeless population of the city, the number of very low income renters, and the renters that are overcrowded. But if not all New Haven residents are counted in census data, the federal funding will fall short of the amount required.

“I do think that that is a major reason why we don’t receive the proper amount of the federal funding that we should have,” Upper Westville Alder Darryl Brackeen Jr. told The New Haven Independent after the meeting. ​“The context of that is historic in nature. There is a mistrust in the census bureau and the federal government as to why this type of information is needed in our communities of color.”

New Haven made an early start on the Census 2020 campaign and residents continued to advocate for people to fill out the census during the pandemic. Still, the city lags behind other communities in signing up residents.

“It’s not enough money,” local business owner and activist Jayuan Carter said of the CARES Act allocation.

Those Who Need It

A major concern raised during the Monday hearing was how the alders and city government officials would ensure that those most in need of the funding would be aware that they can apply for and receive it.

“You talked about the brick and mortar businesses as well. How are we going to get the word out to the folks who are running the bodegas and are not aware of the information?” asked Hill Alder Carmen Rodriguez. ​“How are we going to get the word out to the community? If they’re hurting, how are they going to know?”

Some $1.6 million will go toward The 1000 Homes Initiative. It aims to rapidly house homeless individuals into permanent housing, rather than move them back into crowded homeless shelters which carry a high COVID-19 transmission risk. And $420,093 of funds will also go into supporting homeless shelters so that they can operate safely, with reduced occupancy and increased frequency of cleaning to reduce the transmission risk.

More than $800,000 will go toward meeting the basic needs of groups including vulnerable and at-risk households, prison reentry populations, and individuals asked to quarantine, isolate or stay-at-home because they are immunologically compromised.

The city’s Economic Development Administration will oversee the allocation of $500,000 to help small, struggling businesses that have been hit directly by the pandemic. The largest portion of funds will be given as direct assistance to small businesses.

Deputy Economic Development Director Cathy Graves announced that the city is putting together a $1.5 million revolving loan fund to help small minority-owned or women-owned businesses in New Haven and the Lower Naugatuck Valley that have been in business for at least one year, lending between $10,000 to $25,000 to these businesses.

“It is a micro-lending program so it lives into perpetuity. We thought it’s important that small businesses always have funds they can defer to in times of need,” she said.

Meanwhile, LCI will administer $802,393 of funding to help residents at risk of housing insecurity, including those who may suffer from long-term unemployment when the current federal benefits to help individuals through the crisis expire. A landlord-tenant workout program would allow the city government to pay a portion of the tenants’ rent. It will be a voluntary program, with help given for six-month periods of time.

LCI Director Neal-Sanjurjo promised to have people knock on doors to inform residents about the existence of these funds.

Beaver Hills Alder Brian Wingate emphasised the importance of using non-digital means to reach out to older businesses. ​“Some businesses have been around for 40 to 50 years but don’t do Zoom. But you put the paper in front of them, they understand,” he said.

Bureaucratic Hurdles

On rainy Tuesday afternoon in the Hill, some stores were shuttered and others saw a slow trickle of customers as small local businesses struggle with reopening.

Merced, the owner of La Isla Hair Salon, said he has seen his number of customers dwindle to half over the course of the pandemic. He used to bring in $2,400 a month. Now the number is around $1,300.

It didn’t help that he had to remain closed until two weeks ago, when hair salons and barbers were allowed to reopen. He now owes two and a half months of rent to his landlord, which he is repaying in monthly installments.

The city “should have helped,” he said. Now he hopes it might assist him with covering his owed rent, although he is reluctant to take out a loan that he said he has no ability to pay back.

The CARES Act funding might go toward helping small, minority-owned businesses like Merced’s. But the question is whether the money will arrive in time for all of them.

The mayor’s office was notified as early as April 6 that it would receive $1.1 million of Emergency Solutions Grants (ESG) Program funding, $160,000 of Housing Opportunities for People with AIDS (HOPWA-CV) program funding, and $2.2 million of Community Development Block Grant funding from the U.S. Department of Housing and Urban Development *HUD) funding. It was informed about the second round of ESG funding totalling $1.5 million in a letter dated June 9.

It took three months for the Board of Alders to vote to accept the U.S. government federal funding. It will be at least August before the money will be allocated to the people who need it.

“The administration was notified in April, and it took them that long to come up with the high-level budget,” said Alder Brackeen. He said that he had hoped to have received the budget earlier so that the Alders could have ensured that proper outreach could have be carried out and residents could be adequately informed of the existence of the funds.

“This process has been lengthy but the city has been working with HUD to get this done,” mayoral spokesman Gage Frank told the Independent. “Comparable cities like Hartford and Bridgeport have not yet completed the process.”

He explained that when the city was notified that CARES Act funds were available in April, very little guidance was issued at that time by HUD as to how the funds could be utilized. Then, between April and May, HUD began to provide training webinars on using the funding.

The Economic Policy Institute report has criticized the CARES Act for “forcing [state and local governments] to jump through bureaucratic hoops even to get this insufficient amount”.

Both the federal government and the New Haven city government have made attempts to expedite the process. Under the CARES Act, the public comment period, during which members of the public may offer testimony during a virtual public hearing, was reduced from the usual thirty days to just five days. The city has also applied for special waivers to speed up the use of these funds.

Even then, the Board of Alders still has months to go and bureaucratic hurdles to overcome before it can proceed in allocating the funds to the city’s most needy. The city will now submit its revised budget on the use of these funds to the federal government. At the end of July, the Joint Health and Human Services Committee will reconvene to review the more detailed budget. They will finally be able to continue proceedings with the full Board of Alders in August. Only then will funds be disbursed into the hands of those individuals, families and small businesses who need it.

Watch the full video of the committee public hearing here (password: 2Q#5@&81).