The Community and Economic Development program at the School of Government provides public officials with training, research, and assistance that support local efforts to create jobs and wealth, expand the tax base, and maintain vibrant communities. We deploy the resources of the University to support the development goals of communities in North Carolina.

How North Carolina has used Community Development Block Grants to Fund Disaster Recovery Programs

This post is Part 2 of a two-part series explaining how Community Development Block Grants for Disaster Recovery (CDBG-DR) are administered in North Carolina and how they’ve been used to help rebuild communities affected by Hurricane Matthew and Hurricane Florence.

In October 2016, Hurricane Matthew made landfall in North Carolina, bringing up to 18 inches of rainfall and setting record level floods in 17 counties. In the aftermath of the storm, over 77,000 households applied for assistance from FEMA, and over 300,000 businesses were either physically or economically impacted.

The first part of this series documented how federal disaster recovery funds are administered by the state, and how they’ll be used to address the damage caused by Hurricane Florence in 2018. This post will demonstrate ways CDBG-DR funds have been used in the past to recover from Hurricane Matthew. Read More…

What @sog_ced is reading online: March 2020

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebookto receive regular updates.

Items of interest related to CED in North Carolina:

Alliance for Innovation interviews Durham City Manager Tom Bonfield about the city’s affordable housing strategy. http://bit.ly/2xhat4l

In-depth look at NC county economic development tiers and challenges for Chatham County, plus insight from UNC School of Government faculty member Jonathan Morgan. http://bit.ly/2w66rLW

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Local Government Emergency Loans for Small Businesses: Contracting with Financial Institutions for Loan Administration

The COVID-19 public health crisis is giving rise to an unprecedented economic crisis. Economic activity across the nation has slowed considerably, and many small businesses—which were operating successfully only one month ago—are now struggling to survive. As their bills pile up but no revenue comes in, some businesses will run out of cash and be forced to shut down permanently. Business closures on a vast scale would likely inhibit a recovery for years after the current crisis subsides. The economy will rebound more quickly after the crisis if these small businesses keep their staff in place and are able to resume operations as soon as restrictions are lifted.

One way to assist small businesses during a cash crunch is to establish an emergency loan program. The federal Small Business Administration (SBA) offers a disaster loan product for this purpose, but the process takes 60-90 days (possibly longer in a time of heavy demand) for the SBA loan to be issued by a bank. Some businesses would be forced to lay off workers in the interim, and many businesses still wouldn’t have enough cash to remain solvent while waiting for the SBA loan.

This is where state and local governments come in; they can offer emergency loans during the intervening period. As explained in an earlier blog post, North Carolina local governments possess statutory and constitutional authority to offer small business loans and could fill the gap. However, the need is great and local governments may not have enough trained staff to run a loan program at the scale required. Fortunately, North Carolina is home to an array of community-minded financial institutions who know how to administer and manage small business loans. A number of those financial institutions have collaborated on a statewide emergency loan program. It is possible for local governments to contract with these and other third-party financial institutions for administration of a local government emergency loan program. Read More…

Local Government as Lender: Emergency Loans for Small Businesses

Economic activity can be disrupted by any number of unanticipated emergencies, ranging from natural disasters to virus outbreaks like COVID-19. When these events threaten the survival of small businesses, the owners may turn to government for assistance. One legal and effective way for a government to assist a small business with weathering a crisis is by providing an emergency loan. The loan allows the business to maintain operations when cash flow is severely constrained due to disruptions in demand. Loans are a common tool in these situations. For example, the federal Small Business Administration (SBA) offers disaster assistance loans to businesses that are impacted by natural disasters. SBA loans offer interest rates between 4% to 8% depending on a borrower’s ability to access other credit (see SBA disaster loan web page here). North Carolina is designated as eligible for SBA loans in response to the coronavirus outbreak.

Local governments may have the means and desire to offer their own local loan programs for small businesses during a crisis. Such loans could provide financing for businesses that cannot qualify for SBA loans or may provide bridge financing until an SBA loan is obtained. This post provides legal and practical guidance for local governments who wish to design and offer such loans. Read More…

Community Development Block Grants – Disaster Recovery Funds (Part 1)

Along the eastern seaboard, the intensity and frequency of severe weather caused by tropical storm systems and hurricanes is expected to increase. Most recently in North Carolina, Hurricanes Matthew and Florence caused severe damage to private property and public infrastructure. As similar storms are expected to occur more often, local governments will need to be well-versed in the funding opportunities available from state and federal programs. Many of these funds are available to private home and business owners, and local governments can play critical intermediary roles, aligning available resources with citizen needs. At the same time, a portion of these programs are available to local governments directly, funding infrastructure repair and capital projects.

One of the largest and most widely available recovery programs is the Community Development Block Grant – Disaster Recovery (CDBG-DR). Appropriated by Congress and administered by the US Department of Housing and Urban Development (HUD) as well as state partner agencies, the program is specifically designed for use in low to moderate income (LMI) areas. This post will review the CDBG-DR appropriation and allocation process as well as discuss what funds are available to local governments.

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What @sog_ced is reading online: February 2020

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.

Items of interest related to CED in North Carolina:
  • Are “20-minute neighborhoods” an appropriate goal? In NC, aspects of this concept are used to prioritize funding for affordable housing (proximity to grocery and transit). Australian faculty describe the 20-min effort in Melbourne: bit.ly/38VHu4b

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Durham’s Blueprint for Equitable Community Engagement

What started as community push-back on Durham’s proposed rails-to-trails development has turned into a model for standardizing equitable and inclusive engagement. Here’s how community concern about the Durham Belt Line resulted in a shift in culture development and the creation of Durham’s Equitable Community Engagement Plan.

Background on the Durham Belt Line Project

Originally built in 1892 to support the American Tobacco factory, the Durham Belt Line was purchased and used by railway company Norfolk Southern from 1900 until the late 1990s. Since then, the rail spur has sat idle until The Conservation Fund and the City of Durham acquired it in 2017 with plans to convert it into a 1.7-mile linear park in the model of New York City’s High Line, Atlanta’s BeltLine, and the Downtown Greenway in Greensboro, NC.

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What @sog_ced is reading online: January 2020

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.

CED items:
  • Columbia and Princeton researchers looked at 15 years of data and found “some evidence of direct job gains” from firm specific tax incentives but didn’t find strong evidence of broader economic growth or spillover effects. http://bit.ly/37XWm10
  • Nice job by Novogradac with pros/cons of proposed changes to Community Reinvestment Act. Take a close look at the new “aggregate balance sheet ratio” and the potential consequences for underserved and rural areas. bit.ly/37d8w6o
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The NC Workforce of Tomorrow: the Condition of Community College Students Today

The students at community college today represent the workforce available tomorrow.  If they are in trouble, it is a major red flag for CED professionals.  CED professionals need to understand the world of community college students if they are to help them develop into the workforce in the next ten years, attracting business and investment ready to tap into its potential.  A growing body of data suggest the students are deep in trouble. Read More…

Downtown Facade Improvement Programs

The national Main Street Program touts “coordinated, small-scale facade improvements” in rural downtown commercial districts as having the “power to not only preserve valuable historic resources in rural communities, but also to spur economic growth in the surrounding area.” What local government tools are available and appropriate for encouraging private owners to make facade improvements?

This post provides an overview of four tools Read More…