CAPER Report Finds Colorado Housing Grant Spending Overwhelmingly Benefits Whites

By Robert Davis

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A comprehensive review of how Colorado’s housing agencies spend federal housing grant money revealed the funds overwhelmingly benefit white families, and that the state drastically underutilizes available funding for affordable housing homeless services. 

The Department of Local Affairs (DOLA) conducted the review for the 2019 program year, which ran from April 1, 2019, to March 31, 2020. Known as the state’s Comprehensive Annual Performance and Evaluation Review (CAPER), it measures the performance and effectiveness of five federal grant programs.

Those programs are the Community Development Block Grant (CDBG), Emergency Solutions Grant (ESG), HOME Investment Partnership Program (HOME), Housing Opportunities for Persons with HIV/AIDS (HOPWA), and Housing Trust Fund (HTF).

CDBG provides one of the most egregious examples of how federal housing dollars are benefitting white families in Colorado.

The state received more than $10 million in CDBG grants from the US Department of Housing and Urban Development (HUD) in 2019. These funds can be used to rehabilitate homes or commercial buildings or build public improvements like replacing old water and sewer pipes.

DOLA’s 2019 strategic plan estimated the agency would support approximately 2,500 public infrastructure projects for low-and moderate-income housing with CDBG funds. During the program year, DOLA tallied more than 60,000 such projects that it supported. 

However, 96 percent of the CDBG funds it spent “directly benefitted” white families to the tune of 2,259 of the 2,351-family sample listed in the report.

Similarly, 69 percent of beneficiaries from ESG funds were white, just as 85 percent of families assisted by HOME and 73 percent of HOPWA recipients. Colorado did not report any beneficiaries of HTF funds because DOLA has not signed any contracts and there are no lease-ups to report.

For context, the report said Colorado’s demographics are 83 percent white, 4.2 percent Black, 1.1 percent Indigenous, and 3.3 percent Asian. The percentage that identified themselves as = Hispanic or Latinx was 21.8 percent.

DOLA cautioned that these numbers “reflect only those CDBG projects that are reported by individuals or families, as opposed to by area,” according to the report.

Homeless Services

ESGs give DOLA a tool it can use to support those experiencing homelessness in Colorado by purchasing shelter beds throughout the year. However, the funds can be used for any program that helps people “quickly regain stability in permanent housing after experiencing a housing crisis and/or homelessness,” according to HUD’s website.

In 2019, Colorado received $2,039,357 in ESG funds. These grants are often redistributed to private investors, local governments, or are used to match other funding sources.  

ESGs also require the grantor to match the funding received under the grant at a 1:1 ratio. Private investors matched more than $2.5 million in grant funding last program year, nearly doubling from 2018.

However, over the past three program years, DOLA has not allocated a dime of ESG funding to housing stability or homelessness prevention grant programs, the report says. Instead, the agency allocates 100 percent of its ESG funding to rental assistance programs and essential services for emergency shelters.

This is part of the reason why Colorado struggles to expand its shelter system, a function the grant is designed to support.

To put this in ESG terms, Colorado struggles to provide bed-nights for those experiencing homelessness. Bed-nights are calculated by multiplying the total number of beds supported by ESG funds by 365. Of the 657,000 bed-nights available in Colorado in 2019, the state utilized 338,107, just 51 percent of its capacity.

Affordable Housing

As for affordable housing, Colorado built just 5 percent of its target goal over the last program year. The state had planned to provide 835 homeless households with affordable housing but tallied only 208. A similar story can be told about providing affordable housing to non-homeless and special needs households.

Colorado also has a one-year goal of supporting 6,885 rental households through assistance programs but reported serving just 208.

Another issue DOLA addressed is its authority to control which projects it reviews for federal funding. Because DOLA is a state grantee, meaning it provides funding for projects that meet  predetermined review criteria, the agency cannot select projects to funds based on community needs. This often leads to a situation where the agency approves a project that the community rejects.

DOLA said the drastic disparity between its goals and actuals was caused by “rising building costs and decreased funding.”

“We are capable of serving more people but restricted by what can be produced with less money and increasing costs,” the agency said in the report.

Governor Jared Polis cut DOLA’s funding by 3.6 percent in his 2021 budget, while only adding $172,000 to the agency’s affordable housing stash.