The Long Beach Civic Center. Photo by Thomas R. Cordova.

Changes may be coming to the way Long Beach spends its annual allotment of funds from the U.S. Department of Housing and Urban Development.

Long Beach is in the midst of updating its Consolidated Plan, a five-year document the city compiles as part of the application process for HUD funds, which city officials anticipate will total over $8 million this year. Final numbers have not yet been released by HUD.

The city spends the money on a wide range of programs to help support economically disadvantaged communities, including grants for small businesses, housing projects and repairs to public spaces. 

But during a City Council study session this week, Councilmember Rex Richardson criticized certain aspects of the city’s past use of the funds—and city officials have indicated that the draft document for 2023-2027, set to be released next month, could reflect some of that feedback.

Specifically, Richardson pointed to business grants, which have historically been capped at $2,000. Richardson said those grants could be more effective if they weren’t so thinly spread.

“When I started, grants were $2,000 then, and I think they are still $2,000 now,” Richardson said during the session. “I just don’t see much of an impact.”

City staff didn’t dive into specifics on those grants during the meeting, but documents show that 119 startups and businesses were awarded a maximum of $2,000 under the 2012-2017 Consolidated Plan.

Richardson argued that the grants should be much larger—anywhere from $10,000 to $25,000.

Another flaw in Consolidated Plan spending, in Richardson’s eyes, has been the lack of support for the city’s Business Improvement Districts. While Long Beach does work with BIDs as part of the plan’s conceptualization, he said that more BIDs should not only be consulted, but also considered for direct financial support.

“Some of these BIDs, they could use the money,” Richardson said.

While city staff did not directly respond to the councilmember’s comments at the time, a statement from the Development Services Department’s Housing and Neighborhood Services Bureau following the meeting said the bureau received “good feedback in particular from the council.”

“When finalizing the draft Consolidated Plan, staff will be taking into consideration the comments and suggestions from all the community meetings, the council study session and the 4/20 public hearing held by the Long Beach Community Investment Co.,” the bureau’s statement said.

While the city has wide discretion over how to spend the HUD funds, the money still must meet the needs of three specific HUD programs: the Community Development Block Grant Program, the HOME Program and the Emergency Shelter Grants Program.

Most of the funds Long Beach receives from HUD must go toward the CDBG Program. City officials expect to receive $5.4 million for the program each year.

CDBG funds can be used for a variety of community improvement projects, but they must invested in geographic areas in which at least 51% of the population is low income. Under HUD guidelines, households that bring in up to 80% of the area median income—meaning up to $66,750 for a family of one or $95,300 for a family of four—are considered low income. Most of the eligible areas are located in North, Central and West Long Beach.

The HOME Program, meanwhile, is estimated to bring about $2.3 million to the city this year. HOME funds must be spent on creating and maintaining affordable housing.

And another $500,000 is expected to come in from the Emergency Shelter Grants Program, which is reserved for use “to rehabilitate and operate emergency shelters and transitional shelters, provide essential social services, and prevent homelessness,” according to the HUD Exchange website.

The draft Consolidated Plan will be published May 14 and will available for public review and comment for 30 days. There will be a final public hearing with the Long Beach Community Investment Company on June 15, and the City Council is slated to accept the plan in July.

Christian May-Suzuki

Christian May-Suzuki is a reporter at the Long Beach Business Journal.