Spur for Home Improvements : Some Cities Use Federal Block Grants to Help Improve Housing Stock, Prevent Slums Areas

Cockroaches in her teacups, cobwebs on her couch:

The 67-year-old blind woman, who resides alone in Ontario except for her pet birds, didn’t know she was living in such squalor.

She didn’t know that the government could help, until neighbors alerted a social service agency, which notified the city.

“We went out immediately to inspect,” said Piera Amourgi, Ontario community development coordinator, “but our inspector couldn’t go past the first room because there were insects everywhere.”

The city put the woman up in a motel for a few days while the house was fumigated and cleaned. Then it was repaired, recarpeted and painted, inside and out.

The cost was about $15,000, which the woman may never need to repay, thanks to a $2,000-emergency grant for cleaning, and a deferred loan to be paid whenever the title to her house changes hands. For many seniors, where this type of deferred loan is available, this comes when they die.

‘Try to Reach Out’

The Ontario woman was a beneficiary of a federal program, administered by cities, for low-income people. It is an old program, but some of the ways it is being used are fairly new and not widely known.

“People who really need the help might not even know about it, though we really try to reach out to the community,” Amourgi said.

Funding comes through Title I of the Housing and Community Development Act of 1974, which for years primarily provided low-income housing and public works improvements.

In recent years, the act has been more broadly interpreted to encompass other activities, such as home improvement, fair housing, graffiti removal and even finding roommates for seniors. “It’s kind of like a computer dating game, trying to match people,” Amourgi said.

Timothy C. Steinhaus, deputy community economic development director for Ontario, said, “It has been more flexible recently about how we can use the (community development block grant or CDBG) funds, but basically, it’s people who are low income who get the benefits.” “Low income” is determined by a formula issued by HUD, the federal Department of Housing and Urban Development, and it varies slightly from county to county.

How each city distributes CDBG funds and how much each jurisdiction gets also varies, though all people who get home-improvement funds must be property owners, not renters. (There is another federal rehab loan program, also handled by some city governments, for landlords who have low-income renters.)

Ontario gets about $1.1 million in CDBG funds each year, with an estimated 60% going into housing, but Fountain Valley only gets about $300,000 a year, though it spends about the same percentage for deferred loans and other housing programs.

Word of Mouth

Fountain Valley has one CDBG program for homeowners who want to fix up and paint their homes in which the city rebates 40% of the cost, up to $1,000, if the applicant qualifies under low- and moderate-income guidelines.

“The greatest number of requests for this (program) has come from seniors living in two mobile-home parks in the city,” said Joan Dean of the Fountain Valley Community Development Department. “That’s because of word of mouth. Other people aren’t as much aware of our programs.” The city also offers CDBG-subsidized emergency grants and low-interest loans for up to $20,000 for 15 to 20 years, for major plumbing, roof or structural repairs.

Like Fountain Valley and Ontario, Pomona also offers a deferred loan for housing rehabs, using CDBG funds, “but essentially, our loan is only deferred for a couple of years,” said Duane Solomon, city housing coordinator, “because what happens if Grandma quitclaims her house to her grandson, but the deed isn’t recorded until Grandma dies? How do we track that?”

By contrast, the city loaned owners of six commercial buildings a total of about $600,000 for facade improvements, and these loans will be forgiven after 20 years, Solomon said, because they are used as part of a slum-prevention program.

Pomona also uses its CDBG funds for its “move-on” program, in which old houses are moved from commercial to residential neighborhoods and are then refurbished. So far, two houses under this program have been purchased by the same private party, one house for $1, the other for what it would have cost to demolish it: $2,250.

Old Houses Emphasized

Solomon says he notifies as many as 40 to 50 potential bidders every time an old house is offered at such low prices, but there has been little response. “I don’t know why, whether it’s want of interest, too burdensome because they are such small projects, or if there are just too many other demands,” he said. “Some people want these houses for free.”

The emphasis in Pomona is on old houses, because its housing stock is older than that of many cities. In Newport Beach, the focus has been on new construction, and that city hasn’t offered any deferred loans, “because we just haven’t had much demand,” said Craig Bluell of the city’s Community Development Department.

There has been a need for low-income housing in Newport Beach, however, and the city has responded by providing private developers with grants or seed money through CDBG funds to construct about 145 units in the past four years.

“We’ve also granted density bonuses so developers could build higher densities than would normally be allowed,” Bluell added.